Articles in Category: Imports

Here at MetalMiner, we occasionally write about our favorite TV shows, especially when they shed light on the metals and other commodity markets that we cover in depth today.

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Never could there be a better examination of how commodities and commerce changed the New World, with a hand from new technology, than the Starz drama, “Black Sails,” which ends its fourth season and its series run Sunday night.

Black Sails courtesy of Starz network

What’s a pirate show without Blackbeard? Image courtesy of Starz.

What does a dark and very adult prequel to Robert Louis Stevenson’s “Treasure Island” have to do with metals, you might ask? Just that the prices of the metals we track today are the same type of information that buccaneers based in the Caribbean in the 18th Century tracked for rum, tea and other shipments marked for plunder in the new world.

Commerce Creates Disruption

The series stars Toby Stephens as Captain Flint, a former British naval officer turned pirate who leads a crew based out of New Providence Island in the Bahamas. His co-star, Luke Arnold, plays young Quartermaster Long John Silver whose adventures begin 20 years before the events of “Treasure Island” and centuries before his name would ever grace a chain of fast food restaurants known for battered fish. Read more

The seesaw battle between steelmakers in China and India took a new twist recently with a report in a Chinese newspaper calling the Indian government on its “protectionist” stance on steel.

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The state-run Global Times newspaper said in a report, referring to India’s decision to award its first bullet train project to Japan, that India needed to have a “sober” look vis-a-vis China when it came to solutions for India’s proposed railway network revamp or its entirely new high-speed rail project.

The high-speed “bullet train” project is likely to commence in 2018 on a 315-mile (508-kilometer) route between Mumbai and Ahmedabad. It’s slated to be completed by 2023.

India has been waging a war against cheap steel imports into the country for some time now, with Chinese steel companies high on their bad guy list. The government imposed taxes in various forms not to protect its own steel industry, but to equalize import prices to production costs. Over 80% of the funding for the project is coming from Japanese investments. Read more

We had a chance to sit down and discuss the issues facing members of the Steel Manufacturers Association with SMA President Philip K. Bell at the recent S&P Global Platts Steel Markets North America conference here in Chicago. Bell also currently serves on the  Department of Commerce International Trade Advisory Committee on Steel (ITAC 12), advising the Secretary of Commerce and United States Trade Representative on trade policy, trade agreements, and other trade related matters that benefit U.S. businesses, workers, and the economy.

Philip K. Bell

Philip K. Bell. Source: SMA

Jeff Yoders: We’ve heard a lot about North American Free Trade Agreement and what changes to it might mean in the last two days. How do your members feel about reopening NAFTA to changes?

Philip K. Bell: NAFTA is over 20 years old and it’s probably time to look at it again. A lot has changed over the last two decades. We hope the approach that the administration takes is one that’s more methodical and takes into account that not only are Canada and Mexico two of our biggest trade partners but, when it comes to the steel industry, they ARE our two largest trade partners.

There is a lot of integration in this area. You have a lot of steel producers that either have businesses in Mexico such as Gerdau, ArcelorMittal and Nucor — through its joint venture JFE — and you have a lot of companies that want to do business there like Steel Dynamics which is hoping to increase its presence in that market by importing flat-rolled into Mexico. Read more

The Department of Commerce announced its affirmative final determination in the anti-dumping duty investigation of imports of South Korean ferrovanadium.

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For the purpose of an anti-dumping investigation, dumping occurs when a foreign company sells an imported product in the U.S. at less than its fair value.

Commerce found dumping by mandatory respondent, Korvan Ind. Co., Ltd., at a final margin of 3.22%. Additionally, based on the application of adverse facts available, Commerce found that dumping has occurred by mandatory respondents, Fortune Metallurgical Group Co., Ltd. and Woojin Ind. Co., Ltd., at final margins of 54.69%. Commerce assigned a final dumping margin of 3.22% to all other producers/exporters in Korea.

As a result of the final affirmative determination, Commerce will instruct U.S. Customs and Border Protection to collect cash deposits based on these final rates.

Two-Month Trial: Metal Buying Outlook

The petitioners for this investigation are the Vanadium Producers and Reclaimers Association — a Washington DC-based trade group — and its members: AMG Vanadium LLC of Ohio; Bear Metallurgical Company in Pennsylvania; Gulf Chemical & Metallurgical Corporation of Texas; and Evraz Stratcor, Inc. in Arkansas.

The Aluminum Association, the group that represents the North American aluminum production industry, today filed a trade enforcement action against the People’s Republic of China seeking relief for domestic producers of aluminum foil. This action is part of the industry’s broad trade strategy to address Chinese overcapacity throughout the value chain.

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The Aluminum Association’s Trade Enforcement Working Group filed anti-dumping and countervailing duty petitions alleging that dumped and subsidized imports of aluminum foil from China are causing material injury to the domestic industry.

“Today’s action marks the first time the Aluminum Association has filed unfair trade cases on behalf of its members in its nearly 85-year history,” said Heidi Brock, President & CEO of the Aluminum Association. “This unprecedented action reflects both the intensive injury being suffered by U.S. aluminum foil producers and also our commitment to ensuring that trade laws are enforced to create a level playing field for domestic producers.”

The anti-dumping margins alleged by the domestic industry range from 38% to more than 134% of the value of the imported aluminum foil. The domestic industry’s countervailing duty petition alleges that Chinese producers benefit from 27 separate government subsidy programs.

Two-Month Trial: Metal Buying Outlook

The industry group previously said it wanted to avoid filing the trade actions if it could via meetings with its Chinese counterparts but, apparently, there simply was not enough progress in curtailing injurious imports.

German Dominguez

German Dominguez

There’s been a lot of talk about President Trump’s “border tax” lately as it relates to reshoring manufacturing to the U.S. and financing “great, great” border walls, and my colleague Jeff Yoders has done a bang-up job covering the gamut of the Trump administration’s proposed policies in general.

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On our sister site Spend Matters, we tried to get closer to the bottom of the whole south-of-the-border tax issue, which opened up a can of worms — and devolved into golf analogies.

But what does it all mean for U.S and Mexican manufacturers and their future strategies?

Q&A With German Dominguez, Independent Advisor and LatAm Sourcing Expert

We caught up with German Dominguez, an independent sourcing advisor helping U.S. manufacturers to best-cost-country-source direct materials where it is most advantageous in Latin America, mainly within The Pacific Alliance region (Mexico, Colombia, Peru and Chile) — the largest emerging markets economic bloc in Latin America. Read more

After several hundred companies and individuals registered as potentially interested vendors, the Department of Homeland Security has added details to its request for Mexican border wall plans and delayed the procurement process by several days.

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The request for proposal is for a concrete wall structure or structures, nominally 30-ft. tall, that will meet requirements for “aesthetics, anti-climbing and resistance to tampering or damage,” according to a change in the solicitation plan posted to the DHS website on March 3.

Two-phase design-build procedures will be observed, under FAR Part 36.3, with Phase One of the RFP due on or about March 20th.

Under the procurement request, vendors must submit a concept paper of their prototype, which will result in the evaluation and down-selection. Offerers will then submit proposals to the full RFP, including prices, due on or about May 3, 2017.

Multiple awards of indefinite quantity, indefinite delivery contracts are anticipated, DHS said. Unless the full cost of the wall falls within DHS’ current budget for 2017, congress will have to appropriate money for its construction.

Not Only US-Made Steel After All

Speaking to reporters onboard Air Force One on Friday, White House spokeswoman Sarah Huckabee Sanders said that the Keystone XL pipeline, which has been in the works for a decade, will be exempt from an executive order President Trump signed in January requiring new pipelines, repairs, or retrofits to use only U.S.-made steel “to the maximum extent possible.”

The justification for that decision is that the pipeline is already under construction, and so is not covered by the executive order.

“The Keystone XL Pipeline is currently in the process of being constructed, so it does not count as a new, retrofitted, repaired, or expanded pipeline,” Sanders said.

Two-Month Trial: Metal Buying Outlook

While it’s true that some parts of Keystone XL have already been built and its developer, TransCanada Corp., has likely already purchased steel for some of it, the 1,200-mile pipeline that is planned to stretch from Alberta, Canada, to Nebraska will likely require much more steel to be purchased before its eventual completion, a construction process likely to take years. The Dakota Access Pipeline that will run from North Dakota to Illinois, which has already restarted construction, was only eight miles of pipe from completion when the Obama administration stopped it last Fall and it, very likely, would not require more steel to be purchased for its completion.

The Department of Commerce announced placed preliminary anti-dumping duties on imports of steel concrete reinforcing bar (rebar) from Japan, Taiwan, and Turkey yesterday.

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“Dumping” is determined to occur when a foreign company sells a product in the U.S. at less than its fair value.

Japan Hit Hardest

In the Japan investigation, mandatory respondents Jonan Steel Corporation and Kyoei Steel Ltd. both received preliminary dumping margins of 209.46%. Commerce assigned the preliminary margin of 209.46% to all other producers/exporters of steel concrete rebar from Japan.

In the Taiwan investigation, mandatory respondents Power Steel Co., Ltd. and Lo-Toun Steel and Iron Works Co., Ltd. received preliminary dumping margins of 3.48% and 29.47%, respectively. Commerce assigned the preliminary margin of 5.49% to all other producers/exporters of steel concrete reinforcing bar from Taiwan. As a country, Taiwan got off relatively easy in this dumping case, considering the margins we just saw for Japan.

Rebar foundation pour in Wrigley Field parking lot.

With rebar a coveted product for large construction projects, it was only a matter of time until dumping was investigated. Source: Jeff Yoders/MetalMiner.

In the Turkey investigation, mandatory respondents Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S. and Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S. received preliminary dumping margins of 5.29% and 7.07%, respectively. Commerce assigned the preliminary margin of 6.20% to all other producers/exporters of steel concrete reinforcing bar from Turkey.

Tariffs for Turkey and Taiwan

This dumping investigation is a separate one from the Turkish rebar countervailing duties investigation we wrote about last week. Countervailing duties are for government-subsidized products, “injurious dumping” is importing and “dumping” products regardless of cost of production. Got that? Good.

Rebar is now a traded steel product on several international exchanges so it was only a matter of time before dumping of it became a hot-button issue for governments with strong infrastructure markets. In 2015, imports of steel concrete rebar from Japan, Taiwan, and Turkey, were valued at an estimated $108.69 million, $17.57 million, and $674.40 million, respectively.

Commerce will instruct U.S. Customs and Border Protection to collect cash deposits based on these preliminary rates. The petitioners for this investigation are the Rebar Trade Action Coalition and its individual members: Byer Steel Group, Inc. of Ohio, Commercial Metals Company in Texas, Gerdau Ameristeel U.S. Inc. down in Florida, Nucor Corporation in Charlotte, N.C., and Steel Dynamics, Inc. of Indiana.

As mentioned above, the merchandise subject to these investigations is steel concrete rebar imported in either straight length or coil form regardless of metallurgy, length, diameter, or grade or lack thereof. Subject merchandise includes deformed steel wire with bar markings (e.g., mill mark, size, or grade) and which has been subjected to an elongation test.

Two-Month Trial: Metal Buying Outlook

The subject merchandise includes rebar that has been further processed in the subject country or a third country, including but not limited to cutting, grinding, galvanizing, painting, coating, or any other processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the rebar.

Commerce is scheduled to announce its final determinations on or about May 16, 2017, for Japan and Turkey, and July 6, 2017, for Taiwan.

The Trump administration is developing a national trade policy that would seek to diminish the influence of the World Trade Organization in the U.S. and champion American law as a way to take on trading partners it blames for unfair practices, according to a draft document reviewed by The Wall Street Journal.

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In his speech to a joint session of Congress Tuesday night, Trump said he wouldn’t let American workers and businesses be taken advantage of. “I believe strongly in free trade but it also has to be fair trade,” he said.

The Trump administration’s trade policy is forming. Source: Adobe Stock/Argus.

Some business groups and republicans who back traditional trade policy have hoped the new administration would moderate its most aggressive policy proposals to protect U.S. industries.

Departure From Previous Trade Policy

However, the policy contained in a draft document due to be published any day now, represents a dramatic departure from the Obama administration, which emphasized international economic rules and the authority of the Geneva-based WTO, an international body that regulates trade and resolves disputes among its members. Armed with what it sees as a broad mandate, the administration is moving forward with rules that would favor U.S. law over the conflict resolution mechanisms of the WTO. Read more

Businessman Wilbur Ross was approved by the U.S. Senate yesterday to become Secretary of Commerce by a vote of 72-27, with 20 Democrats and Sen. Angus King (I-Maine), joining 51 Republicans to vote “aye.” Sen. Johnny Isakson, R-Ga., did not vote due to his ongoing recovery from back surgery.

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The Senate also voted 67-31 to move forward on the nomination of Rep. Ryan Zinke, (R-Mont.), to lead the Interior Department. A final vote on Zinke’s confirmation is expected Wednesday.

Thomas J. Gibson, president and CEO of the American Iron and Steel Institute, reacted to the confirmation.

“Wilbur Ross’ clear focus on the challenges that the steel industry is facing, and his intent to use all of the tools at his disposal to ensure a level playing field, is great news for the domestic steel industry,” Gibson said. “He has keen knowledge about the global overcapacity in steel — fueled by foreign government subsidies and other trade-distorting policies and repeated surges in unfairly traded imports. His experience as a businessman involved with a number of manufacturing industries facing similar unfair import competition gives him the first-hand knowledge of the critical issues impacting steel and other industries. He will be an exceptional Secretary of Commerce and we look forward to working with him.”