Articles in Category: Imports

The North American Free Trade Agreement (NAFTA) isn’t the only trade deal the Trump administration is eyeing for changes.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Last week, United States Trade Representative (USTR) Robert Lighthizer and Korean Trade Minister Hyun-chong Kim discussed the U.S.-Korea free trade agreement, referred to as KORUS, via video conference, according to a USTR release.

Like NAFTA, the trade deficit is a central talking point for the U.S. In a statement from the Office of the USTR, Lighthizer summarized the administration’s goals with respect to trade with South Korea.

“The United States and Korea have an important economic relationship,” Lighthizer said in the prepared statement. “Unfortunately, too many American workers have not benefited from the agreement. USTR has long pressed the Korean government to address burdensome regulations which often exclude U.S. firms or artificially set prices for American intellectual property. This negotiation offers us an opportunity to resolve these and other barriers.”

“Since KORUS entered into effect, U.S. goods exports have decreased while the trade deficit overall with Korea has nearly tripled,” Ambassador Lighthizer continued. “American service exports have seen virtually no growth in the past four years. President Trump is committed to substantial improvements in the Korean agreement that address the trade imbalance and ensure that the deal is fully implemented.”

According to a release on the Korean Ministry of Trade, Industry and Energy website last Wednesday, Kim said no decision had been reached regarding the next step in the discussion.

“The Trade Minister said the Korean representatives had proposed a joint study to examine the effects of the trade pact before starting talks on a revision of the deal, and will await the USTR’s review of the proposal and response before deciding how to proceed,” the release said.

The Trade Deficit Rises

The U.S.’s trade deficit with South Korea has ballooned since implementation of KORUS in March 2012.

In 2011, the last full year before KORUS went into effect, the U.S. had a $13.2 billion trade deficit with South Korea, according to U.S. Census Bureau data.

That deficit has increased in size every year since: $16.6 billion (2012), $20.7 billion (2013), $25 billion (2014), $28.3 billion (2015) and $27.6 billion (2016).

Thought the first six months of 2017, the U.S. has a $11.2 billion trade deficit with South Korea.

The automobile sector is the source of much of the deficit, according to the USTR release. In 2016, 90% of the $27.6 billion deficit came from the auto sector alone.

Impact on Steel?

As for metals, South Korea is a leading steel exporter to the United States, as a recent American Iron and Steel Institute (AISI) report on steel imports showed.

Although South Korea’s steel exports in July to the U.S. dropped by 13% from June totals, South Korean steel still led the way with 337,000 net tons exported — ahead of Turkey, Germany, Japan and Taiwan.

South Korea is also the largest supplier through the first seven months of 2017, sending nearly 2.3 million net tons to the U.S., which is actually down 4.5% year-over-year.

While China has been the focus of the Trump administration’s Section 232 investigation into steel imports, countries like South Korea could also be impacted if Trump opts to slap tariffs on steel imports.

As our Stuart Burns wrote last week, it might be a faulty assumption to think that the trade imbalance is the direct result of the free trade agreement.

“Bilateral trade has surged since KORUS, as the Korean-U.S. trade deal is known, was implemented five years ago,” Burns wrote. “Although there is a trade imbalance, the reality is no two countries will have exactly balanced trade. Balances have more to do with relative competitiveness than a rigged system.”

Free Download: The August 2017 MMI Report

Whatever happens to KORUS, it appears the South Korean government is preparing to pursue alternative economic avenues.

Following a meeting on the country’s exports last Thursday, a release posted on the Ministry of Trade, Industry and Energy website the following day read: “Trade Minister Kim, who presided the meeting held in the Korea Trade Insurance Corp. (K-sure), said that the Korean government will actively respond to trade protectionism, strengthen economic cooperation with emerging markets, and help boost the link between trade and industrial development.”

gui yong nian/Adobe Stock

This morning in metals news, production of raw steel in the U.S. is up for the year, President Donald Trump reportedly rejected a Chinese proposal to cut its steel excess capacity and copper approached a three-year high.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Steel Production Up 3% Year-Over-Year: AISI

According to data released by the American Iron and Steel Institute on Monday, U.S. raw steel production for the week ending Aug. 26 was down 1.3% from the previous week.

However, compared to the same week in 2016, production was up 5.1%.

In the year to date, production through Aug. 26 amounted to 59,153,000 net tons, up 3% from the 57,416,000 net tons during the same period last year.

Trump Reportedly Rejects China’s Capacity Cut Proposal

Given how much ink has been spilled and time spent talking about Chinese excess steel capacity and its effect on the global market, one would think any proposals from China aimed at cutting capacity would be welcomed.

Apparently not.

According to reporting from the Financial Times, President Trump rejected a Chinese proposal to cut its excess capacity. China proposed cutting 150 million tons by 2022, but Trump instead directed advisors to find ways to impose tariffs on imports, according to the report.

As has been discussed ad nauseam, China’s overcapacity has been the focal point of the Trump administration’s Section 232 investigations into steel and aluminum imports.

Copper Continues Rise

Copper rose nearly to a three-hear high Tuesday on falling inventories and a dropping dollar, Reuters reported.

The metal reached $6,825 per ton, its highest since October 2014, according to the report.

Free Download: The August 2017 MMI Report

ronniechua/Adobe Stock

A week after the conclusion of the first round of talks to renegotiate the North American Free Trade Agreement (NAFTA), President Donald Trump once again made comments putting the 23-year-old trade agreement’s continued existence into question.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

In a tweet early Sunday, Trump wrote: “We are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada.Both being very difficult,may have to terminate?”

In April, Reuters reported Trump was “psyched” to terminate the deal, and was prepared to do so until calls from Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto convinced him otherwise.

Trump also tweeted about his proposed border wall with Mexico, restating a campaign pledge to have Mexico pay for the structure: “With Mexico being one of the highest crime Nations in the world, we must have THE WALL. Mexico will pay for it through reimbursement/other.”

The Mexican Foreign Ministry issued a statement Sunday in response to Trump’s tweets.

Read more

stockquest/Adobe Stock

Before we head into the weekend, let’s look back at some of the top stories on MetalMiner this week.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Free Download: The August 2017 MMI Report

U.S. Steel Imports Up 22% in YTD

by on
Style:
Category:
Imports

gui yong nian/Adobe Stock

U.S. year-to-date imports of steel are up by more than one-fifth of 2016 levels, according to a Wednesday release from the American Iron and Steel Institute (AISI).

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

According to the AISI report based on preliminary U.S. Census Bureau data, through the first seven months of 2017 total and finished steel imports are 23,168,000 and 17,938,000 net tons, up 22.1% and 17.3%, respectively, versus the same period in 2016.

Several products posted significant year-to-date increases in import volumes. Oil country goods (up 254%), standard pipe (up 47%), line pipe (up 39%), cold rolled sheets (up 37%), sheets and strip all other metallic coatings (up 35%), mechanical tubing (up 32%), hot rolled bars (up 26%), sheets and strip hot dipped galvanized (up 25%), wire rods (up 13%) and tin plate (up 11%) were among the leaders in this category.

In terms of steel import market share, the U.S. hit 30% in June, but dipped down to approximately 29% for July. The year-to-date market share stands at 28%, according to the data.

By country, South Korea led the way as the biggest exporter of steel to the U.S. in July, sending 332,000 NT (which was actually down 13% from the final June total). Turkey (252,000 NT, down 23%), Germany (148,000 NT, up 27%), Japan (137,000 NT, down 2%) and Taiwan (120,000 NT, down 29%) followed South Korea as the top exporters to the U.S.

On a year-to-date basis, Taiwan boasts the largest percentage increase in exports to the U.S. In descending order of volume, South Korea (2,265,000 NT, down 5%), Turkey (1,723,000 NT, up 14%), Japan (937,000 NT, down 12%), Taiwan (784,000 NT, up 54%) and Germany (750,000 NT, up 7%) led the way.

China Posts Month-Over-Month Increase, YTD Decrease

China, which has drawn much criticism from the Trump administration and U.S. primary steel producers for excess capacity, exported 86,000 NT of steel to the U.S. in July, a 4.6% increase from the 82,000 NT exported in June. In the first seven months of the year, however, Chinese steel exports to the U.S. are down from 515,000 NT last year to 506,000 this year, good for a 1.7% drop.

Of course, the Trump administration’s Section 232 investigation into steel imports, launched in April, has yet to be publicly concluded. While the impact of Chinese excess capacity has dominated much of the steel discourse within the Trump administration and the U.S. steel industry, China represents a relatively small share of the U.S. steel import market.

Should the Trump administration opt for trade remedies in the form of tariffs, quotas, or a hybrid tariff-quota solution, countries like South Korea, Turkey, Japan and Germany could also be affected.

What About NAFTA?

In other policy news, during a campaign-style rally Tuesday in Phoenix, President Donald Trump said the North American Free Trade Agreement (NAFTA) would “probably” be terminated. Whether that is a negotiating tactic — as Mexican and Canadian officials opined — or an earnest indication of Trump’s policy direction remains to be seen. Given that Trump reportedly nearly pulled the U.S. out of NAFTA in April — just three months after withdrawing from the Trans-Pacific Partnership (TPP) — one cannot dismiss the potential reality of his comments.

While various stakeholders have differing opinions on the success of NAFTA — the 23-year-old trade agreement uniting the U.S., Canada and Mexico — there is no doubt that the U.S.’s withdrawal from it would have far-reaching effects, particularly on long-established supply chains.

For example, although Canada is not a top-level steel exporter, a significant majority of its steel exports go to the U.S.

According to the International Trade Administration’s February steel exports report on Canada, Canadian steel exports in 2015 amounted to 1.5% of global exports and one-twentieth of Chinese steel exports that year.

Free Sample Report: Our Annual Metal Buying Outlook

From January-September 2016, 87% of Canadian steel exports went to the U.S., with 8% going to Mexico. As such, Section 232 trade remedies, combined with a potential withdrawal from NAFTA by the U.S. could conspire to severely impact — or, at the very least, significantly alter — the composition of the Canadian steel export market.

Ronnie Chua/Adobe Stock

Earlier this month, the U.S. Department of Commerce issued a preliminary determination on Chinese aluminum foil — one that could have a major impact on Chinese aluminum foil producers.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

On Aug. 8, Secretary of Commerce Wilbur Ross announced that Chinese aluminum foil has benefited unfairly from government subsidies ranging from 16.56 to 80.97%.

“The United States is committed to free, fair and reciprocal trade, and will continue to validate the information provided to us that brought us to this decision,” Ross said in a release. “The Trump Administration will not stand idly by as harmful trade practices from foreign nations attempt to take advantage of our essential industries, workers, and businesses.”

Well, China’s Ministry of Commerce had a response of its own last week.

Wang Hejun, director of the Ministry of Commerce’s Trade Remedy and Investigation Bureau, questioned the ruling, citing the Chinese government’s cooperation, according to a release on the Ministry of Commerce’s website.

The release also states Hejun said China urges the U.S. to act “prudently” to avoid negative impacts bad influence on the economic and trade relationship between the U.S. and China.

According to Reuters, the Ministry of Commerce posted a statement on its Wechat account, in which Hejun said the United States rebuffed the Chinese government’s offers to cooperate with the investigation before making its ruling.

The Department of Commerce’s Aug. 8 ruling was only a preliminary determination. However, at the conclusion of the countervailing duty investigation, duties of approximately 81% could be slapped onto Chinese foil imports.

According to the Department of Commerce release, barring any delays it is expected to announce its final determination on Oct. 24.

In 2016, imports of aluminum foil from China were valued at an estimated $389 million, according to the Department of Commerce.

The aluminum foil countervailing duty investigation is one of 64 initiated from Jan. 20 to Aug. 8 — a 40% increase from the same time period last year, according to the Department of Commerce.

In other aluminum investigations, the Department of Commerce’s Section 232 investigation of aluminum imports is still pending. The investigation was launched April 17 (along with a 232 investigation of steel imports). Although those investigations do not specifically target China, much of the discussion from the administration and those within the domestic steel and aluminum industries has focused on China and excess capacity. Other nations, however, including the European Union bloc, have expressed concern about the impact of Section 232 actions and their effects.

Free Download: The August 2017 MMI Report

According to Section 232 of the Trade Expansion Act, Ross has 270 days to present the president with a report outlining recommendations, which makes for January deadlines for the aluminum and steel cases.

Before we head into the weekend, let’s take a look back at the week that was.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

  • In case you missed it, our August MMI Report is out. Metals like copper and aluminum hit record highs, and nine of our 10 sub-indexes posted upward movement as a result of a strong July. Will that momentum continue? Check back next month for the September MMI report.
  • Many have predicted a decline for iron ore prices, but as our Stuart Burns wrote on Monday, reports of its demise have been greatly exaggerated. A weak U.S. dollar, combined with strong equities and global GDP, have helped keep iron ore performing well, not to mention Chinese steel and the wider metals market. Read through for Burns’ assessment of the iron ore market.
  • In India, a boom of bauxite production is expected, wrote our Sohrab Darabshaw. In fact, it is expected to more than double by 2021. How is that possible? One reason, Darabshaw writes, is “increased domestic demand for aluminium, which will largely be sourced from the quintupling of land under mining lease in the Odisha province (which has the bulk of India’s bauxite reserves).”
  • One commodity almost everyone is interested in is oil. On Tuesday, Burns wrote about the future of oil prices. But, since this is MetalMiner, after all, those prices also have an effect on metal markets.
  • Everyone loves a good M&A story, and Burns had one earlier this week on the ongoing talks between Indian steel giant Tata Steel and Germany’s ThyssenKrupp. Plus, he touches on ArcelorMittal’s takeover of Italy’s Ilva. Burns writes: “For the first time in years, steelmakers at least seem to have a plan and are actively pursuing it. Whether that plan is to the eventual benefit or detriment of consumers remains to be seen — but a healthier domestic steel industry must certainly be advantageous to all.”
  • How about zinc? Burns wrote about the metal’s rise to $3,000, and the reasons behind zinc’s price hitting its highest point since 2007.
  •  Last week was a busy one for the U.S. Department of Commerce, which handed down preliminary determinations in countervailing duty investigations for both Chinese aluminum and silicon coming from a trio of countries.
  • Back in India, steel exports are on the rise as the Indian government’s protectionist measures seem to be paying off for its domestic industry.
  • Lastly, representatives of the U.S., Canada and Mexico began talks on Wednesday regarding renegotiation of the North American Free Trade Agreement (NAFTA), the trade deal instituted in 1994. The U.S. is focused on, among other things, bringing down ballooning trade deficits with the two countries (particularly Mexico). The talks are scheduled to continue until Sunday, so check back for updates on the proceedings.

Free Download: The August 2017 MMI Report

Zerophoto/Adobe Stock

India’s protectionist measures to safeguard its steel industry seem to be paying off.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

As reported consistently by AG Metal Miner, the Indian government, responding to the call of its steelmakers, had time and again imposed various forms of anti-dumping measures and fines to stop cheap imports of steel — especially from the world’s steel manufacturing leader, China.

Along with the U.S. and Brazil, India was said to be one of the world’s leading initiators of anti-dumping investigations, according to the World Trade Organization (WTO).

Well, now, all this has resulted in India’s steel exports doubling to 8.2 million tons and imports have been slashed by about one-third in 2016-17.

As per a report by the Press Trust of India (PTI), quoting from portions of the released Economic Survey, the rise in exports of steel could also wipe away the excess capacity built up in the steel sector. The mid-year survey by the government said steel imports had declined in 2016-17, while exports of steel had doubled.

Alloy imports dipped by 36.6% to 7.4 million tons in 2016- 17 against 11.7 million tons in the previous fiscal year. Exports doubled to 8.2 million tons last fiscal year, over 4.1 million tons in the corresponding year.

The news was welcomed by steel companies like Tata Steel. T.V. Narendran, managing director for Tata Steel India and South East Asia, told newsmen that steel demand in India was increasing, making it just right to make future investments. Stability was being witnessed in the steel sector globally, though it had faced some problem two years ago, Narendran told reporters.

Ironically, much of Indian steel joy stems from its traditional rival China, where there’s been a visible improvement in the economy — which meant much of its steel being produced was once again being used within the country. It was against the backdrop of China’s economic slowdown that the global steel industry had faced distress due to decline in global demand.

The Indian survey report said, in response to the dumping of cheap imports, the government in 2016 introduced a host of measures like raising Basic Customs Duty, imposition of Minimum Import Price (MIP) and anti-dumping duties in order to shield domestic producers. The government imposed the MIP for steel in February 2016 for a period of one year.

On April 12, 2016, India initiated countervailing duty investigation concerning imports of certain hot-rolled and cold-rolled stainless steel flat products originating in China.

According to the WTO, India’s share in total global steel exports increased from 1.1% in 2000 to 2.8% in 2016. During this period, China’s share in total steel exports rose from 3.7% in 2000 to 19.2% in 2016. Japan’s share in total steel exports in 2000 which was 12.2%, but fell to 9.1% in 2016.

Free Download: The July 2017 MMI Report

Meanwhile, the U.S. share in total steel imports was 17.0% in 2000, but has since come down to 12.1% in 2016.

gui yong nian/Adobe Stock

This afternoon in metals news, supply-side reform in China is having significant effects on global markets, U.S. Senate Minority Leader Chuck Schumer calls for trade action to combat cheap imports of steel and aluminum from China and other countries, and scientists have resolved a long-standing mystery about a prehistoric copper smelting event.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Chinese Supply-Side Reforms Leave Their Mark

There are many who question the impact of China’s efforts to curtail excess production, but according to a report by Platts, supply-side reforms in the country are having major impacts around the world.

China’s net steel exports through the first seven months of the year were down almost a third, according to the report. Hot rolled coil prices have also risen in the process, reaching their highest point since 2013.

“Given the current protectionist bent that seems to span the globe, it will be interesting to see how China’s metal exports will be perceived in a few years’ time,” the Platts report concludes. “In the US, for example, there is not enough steel capacity to deliver upon the infra-build being promised by President Trump, should Section 232 be imposed, and the build go ahead.”

Schumer Calls for Action on Cheap Steel, Aluminum Imports

The Trump administration launched Section 232 investigations into imports of steel and aluminum, with a particular focus on China.

On Tuesday, U.S. Senate Minority Leader Chuck Schumer, a Democrat, sounded a similar note, according to a report in the Watertown Daily Times.

“There are top notch manufactures like Alcoa and Nucor ready to provide high-quality aluminum and steel to businesses in and around the country, but China’s overproduction has resulted in a substantial threat to Upstate New York’s metal industry by making it almost impossible for companies that play by the rules to compete,” Schumer said in a statement.

According to the report, Schumer has sent letters to Secretary of Commerce Wilbur Ross and United States Trade Representative Robert Lighthizer on the matter.

Scientists Resolve Ancient Copper Smelting Mystery

For more than half a century, the origins of a copper smelting event at a prehistoric archaeological site has remained a mystery.

But recently, a team of scientists hit paydirt at the Late Neolithic site of Çatalhöyük in central Turkey.

“Scholars have been hotly debating the origins and spread of metallurgy for decades, mainly due to the relationship this technology had with the rise of social complexity and economy of the world’s first civilisations in the Near East,” according to a report in phys.org.

Free Download: The July 2017 MMI Report

According to the report, a study published Tuesday in the Journal of Archaeological Science concludes that that after “the re-examination of a c. 8,500-year-old by-product from metal smelting, or ‘slag’, from the site of Çatalhöyük presents the conclusive reconstruction of events that led to the firing of a small handful of green copper minerals.”

The U.S. Department of Commerce. qingwa/Adobe Stock

This afternoon in metals news, experts say that despite the delay in the Section 232 investigation of steel imports, they still expect President Donald Trump to impose tariffs, U.S. steel production is up 2.9% in the year to date and copper and steel output from Kazakhstan rose significantly from January to July.

Section 232 Tariffs Still Coming, Experts Say

The wait continues for the Trump administration’s announcement of what it is going to do at the conclusion of its Section 232 investigation into steel imports.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

The investigation was launched in April, and Secretary of Commerce Wilbur Ross has 270 days to present President Donald Trump with a report (making for a January deadline).

An announcement was expected to be made by the end of June, but that self-imposed deadline came and went without an announcement. However, despite the delay, some industry experts believe Trump still plans to impose tariffs, according to a report by Reuters.

Trading partners around the world, including the European Union, in recent months have warned of the possibility of retaliatory measures should the U.S. move forward with tariffs (or a quota system, or a hybrid tariff-quota measure).

A Trump administration official told Reuters the Section 232 review is active and is “still under the final stages of review within the administration.”

U.S. Raw Steel Production Up 2.9%

Per data released in the American Iron and Steel Institute’s weekly report, U.S. raw steel production in the year to date is up 2.9% compared with the same time frame in 2016.

Adjusted year-to-date production through Aug. 12 was 55,650,000 net tons, up 2.9 percent from the 54,106,000 net tons during the same period last year, according to the report.

For the week ending Aug. 12, production was up 1% from the week ending Aug. 5, up to 1,780,000 net tons from 1,762,000 net tons the previous week.

Copper, Steel Output Up, Zinc Output Down in Kazakhstan

Output of copper and steel rose significantly from January to July in Kazakhstan compared with the same time frame in 2016, according to Reuters.

Copper output rose 5.7% and steel output rose 10.1% for the first seven months of the calendar year.

Free Download: The July 2017 MMI Report

Meanwhile, zinc output dropped 0.9%.