Articles in Category: Public Policy

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This morning in metals news, U.S. Steel faces a potential lawsuit for dumping toxic materials into Lake Michigan, a Chinese aluminum producer cuts smelter capacity and NAFTA renegotiation talks resume.

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U.S. Steel Could Face Lawsuit for Chromium Dumping

U.S. Steel faces a lawsuit after dumping toxic chromium in Lake Michigan, the Chicago Tribune reported.

According to the report, the 56.7 pounds of chromium released in late October by the company’s Midwest Plant was 89% higher than its water pollution permit allows over 24 hours.

Luoyang Xiangjiang Wanji Aluminium Cuts Back Smelter Capacity

Winter is coming, which means it’s time for those capacity cuts in China.

According to a report by Platts, China’s Luoyang Xiangjiang Wanji Aluminium, located in the Henan province, announced major capacity cuts. On Wednesday, the firm announced 30% cuts of aluminum and alumina capacity, running from today through March 15, 2018, according to the report.

Time For Another Round

Yet another round of talks focused on renegotiating the North American Free Trade Agreement (NAFTA) kicked off Wednesday in Mexico City.

Tensions have ramped up of late from all sides, according to the report, as the U.S. tries to  push through a set of demands being balked at by China and Mexico.

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Although the hope was that a deal could be reached by the end of the year, the teams agreed to extend talks into next year.

Welcome to the (re)launch of the MetalMiner Podcast!

(We’re calling it a relaunch because, well, remember this?)

With everything that’s been happening on the international trade policy front over the past year, we wanted to give metal buying organizations more insight into the issues they may not be reading or hearing enough about — or at all — in the mainstream B2C media.

What better way to do so than go straight to the source — or sources — and interview some key movers and shakers on the manufacturing and policy fronts? So we’re starting a brand-new series called “Manufacturing Trade Policy Confidential.”

New Series: Manufacturing Trade Policy Confidential

In this first episode of the series, MetalMiner Executive Editor Lisa Reisman interviews Michael Stumo, CEO of the Coalition for a Prosperous America.

Stumo’s concerns, and those of his organization, cut across industry sectors and political leanings. In this conversation, Stumo outlines what he sees as the most crucial elements to consider in today’s trade environment, touching on everything from China to the German Mittelstand to Alexander Hamilton as economic visionary.

Manufacturing Trade Policy Confidential: Background

If you’ve visited MetalMiner’s digital pages over the past several months, you’re no stranger to the phrase “Section 232” — shorthand for the U.S. Department of Commerce investigation into whether certain steel imports constitute a national security risk, under the namesake section of the U.S. Trade Expansion Act of 1962.

The outcome of the investigation (findings from which were slated to come down last summer but have been delayed) could have significant effects on upstream and downstream manufacturing organizations, ranging from metal producers to buying organizations – even the mom-and-pops.

But Section 232 is only one small part. Trade circumvention, China’s non-market economy status, domestic uncertainty amidst proposed tax plans and many other issues have pushed us to start this new podcast series.

We’ll be publishing several more interviews in the coming weeks and months – stay tuned!

Follow the MetalMiner Podcast on SoundCloud.

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This morning in metals news, Tata Steel announces a big investment, Chinese steel shipments have continued to drop and the U.S. International Trade Commission (ITC) will expedite a five-year sunset clause review of carbon and alloy steel standard, line, and pressure (CASSLP) pipe from Germany.

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Tata Steel Makes Big Port Talbot Steel Investment

Tata Steel announced it is investing £30 million in its Port Talbot steelworks, the BBC reported.

According to the report, the Indian firm will install a 500-ton steelmaking vessel at the plant, in addition to other upgrades.

Dropping Chinese Steel Shipments

President Donald Trump kicked off his tour of Asia this week; while North Korea draws much of the headlines, China’s steel industry is also among the list of items in the spotlight.

Bloomberg notes that dropping steel shipments from China, the world’s top steel producer, undercut the Trump administration’s rhetoric calling out China’s excess steel capacity.

“Exports from the country that accounts for half of global production dropped to 4.98 million tons last month, down from September’s 5.14 million, and the lowest since 2014, according to customs figures,” Bloomberg’s report reads. “That’s a far cry from the monthly peak in late 2015, when they exceeded 11 million tons.”

U.S. ITC Expedites Review of CASSLP Pipe From Germany

The U.S. ITC announced Monday that it voted to expedite its five-year sunset review concerning the antidumping duty order on seamless CASSLP pipe from Germany.

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“As a result of the vote, the Commission will conduct an expedited review to determine whether revocation of the order would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time,” the ITC release about the vote reads.

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This morning in metals news, aluminum producers in the Middle East say any Section 232 measures implemented by the U.S. will ultimately only impact the American consumer, U.S. steel production was down last week and the next round of North American Free Trade Agreement (NAFTA) talks will start a little earlier than previously announced.

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The Impacts of Section 232? Will Only Hurt U.S. Consumers, Middle East Producers Say

Should the U.S. impose duties on aluminum imports — thus concluding its Section 232 investigation — U.S. consumers will be the only ones impacted, according to Middle East aluminum producers.

As reported by Platts, Middle East aluminum producers, meeting at the Arabal 2017 conference in Muscat, Oman, questioned the impact of trade remedies stemming from Section 232.

Tim Murray, CEO of Aluminium Bahrain, said that any measures will “ultimately be a tax on consumers.”

U.S. Raw Steel Production Drops 1.4%

Raw steel production in the U.S. dropped 1.4% for the week ending Nov. 4, with a total of 1,715,000 net tons (NT) produced, according to American Iron and Steel Institute (AISI) data.

Adjusted year-to-date production through Nov. 4 was 76,474,000 net tons, which is up 3.9% from the 73,583,000 net tons during the same period last year.

NAFTA Talks Moved Up

With a fifth round of NAFTA renegotiation talks scheduled for Nov. 17-21 In Mexico City, some aspects of the discussions will actually begin a little bit early.

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According to a Reuters report, talks on some issues will kick off Nov. 15.

Textiles, services, labor and intellectual property are among the subjects that could be discussed during the early meetings, according to one official quoted by Reuters.

An interesting article in The Telegraph this week explores the challenge facing the U.K.’s industrial sector in terms of power costs and the government’s competing priority of decarburizing the U.K.’s economy.

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The U.K. is not alone in this.

Much of Europe and the U.S. face a similar challenge of rising energy costs and concerns that industry is disadvantaged relative to competitors due to high energy costs and that retail consumers are being forced to pick up much of the bill for the government’s green agenda.

According to the article, British industry already pays well above the average for Europe, and Europe itself is a high-power-cost region relative to many other parts of the world.

Source: Telegraph

Only Denmark has higher industrial power costs than the U.K. Denmark generates much of its electricity from wind turbines, for which the technology is only just becoming economically viable, without subsidy and without costing in the backup generating capacity the variability of wind demands.

Decarburization and social policies, which includes subsidies for renewables but also programs to improve energy efficiency, add 20% to U.K. bills at present. But — and it’s a big “but” — they are rising fast.

Levies for such programs are estimated by Andrew Buckley, a director at the Major Energy Users Council (MEUC), to reach 40% by 2020, according to The Telegraph. Some major users, such as the steel industry, have been made a special case and the government has reluctantly granted an 85% rebate of green taxes for steelmakers. However, that makes the problem worse for firms that do not qualify; every subsidy for one is pressure to increase costs on another.

Some firms are moving off grid, investing in their own turbines, solar parks or micro gas plants, sometimes backed up by battery storage if based on renewables.

Rather than ease the problem for those left on the grid, it makes the situation worse. Funding a network with fewer consumers spreads the fixed costs over those that are left.

Of course, the U.K. is not alone in this, but policymakers create different policies in different countries depending on their priorities. Consumers, even in common markets like the EU, can therefore find themselves paying substantially more than their neighbours.

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For the top ten highest energy users, the annual energy bills stands at around £120 million ($155 million). If they are paying 20% or more than their neighbor, that could equate to a £24 million disadvantage before they produce a single ton of product.

No wonder energy is becoming such a hot topic despite low oil and coal prices.

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

This morning in metals news, U.S. manufacturers are pleased that the U.S. Department of Commerce’s ruling in a recent antidumping case treats China as a non-market economy, BHP looks to meet copper demand with more drilling and U.S. Steel reports its third-quarter earnings.

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Manufacturing Group Praises DOC’s China Decision

The Manufacturers for Trade Enforcement (MTE) expressed their support for the Department of Commerce’s recent antidumping ruling on Chinese aluminum foil (for which dumping margins were assigned based on the department’s non-market economy dumping methodology).

“Fair international competition and a level playing field are essential for the global competitiveness of U.S. manufacturers,” said Thomas J. Gibson, president and CEO of the American Iron and Steel Institute and co-chairman of the MTE. “China has not met the statutory criteria to be treated as a market economy, and we applaud our government’s commitment to ensuring China is not prematurely awarded market economy status.

“Substantial state intervention in the Chinese economy has resulted in significant overcapacity in many manufacturing sectors in China while also distorting global markets and hurting American manufacturers. Jobs have been lost in all of our industries. China should not be afforded market economy status while still maintaining a state-controlled economic system that encourages unfair trade practices that injure multiple U.S. industries.”

BHP Aims to Meet Copper Demand

Miner BHP, in efforts to meet growing copper demand in an increasingly electrified automotive market, is turning to the drill, according to Reuters.

According to the report, BHP’s copper exploration budget has hovered at an annual average of $60 million the last 4-5 years.

U.S. Steel Posts Solid Third Quarter

U.S. Steel reported third-quarter net earnings of $147 million, or $0.83 per diluted share. Third quarter 2016 net earnings were $51 million, or $0.32 per diluted share.

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“Our third quarter results were modestly better than we expected, with stable operating performance at each of our segments and our Tubular segment producing positive EBITDA in the quarter,” said Dave Burritt, U.S. Steel’s president and CEO, in a release. “Our results for the first nine months of 2017 improved over the first nine months of 2016, with all three of our segments improving compared with 2016.”

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

One day after issuing an affirmative ruling in one case, the U.S. Department of Commerce announced it had opened a new investigation.

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On Wednesday, Oct. 25, the department announced an affirmative preliminary determination in an antidumping investigation of carbon and alloy steel wire rod from Italy, the Republic of Korea, South Africa, Spain, Turkey, Ukraine and the United Kingdom.

On Oct. 26, the department announced it was opening a new antidumping probe of imports of forged steel fittings from Italy, China and Taiwan. The announcement also cited a related countervailing duty probe of Chinese forged steel fittings.

“The Department of Commerce intends to act swiftly to halt any unfair trade practices, while also assuring a full and fair assessment of the facts,” Secretary of Commerce Wilbur Ross said in a prepared statement. “The U.S. market is the most open in the world, but we must take action to ensure U.S. businesses and workers are treated fairly if our rules are being broken.”

The antidumping and countervailing duties probes stem from petitions filed Oct. 5 by two Pennsylvania entities: the Bonney Forge Corporation (Mount Union, Pennsylvania), and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, of Pittsburgh.

According to the release, estimated dumping margins alleged by the petitioners are 142.72% for China, 18.66% to 80.20% for Italy and 116.17 % for Taiwan.

Forged steel fittings coming into the U.S. from the three countries amounted to a total value of $114.7 million (with China’s share at an estimated $78.4 million).

A Victory for U.S. Aluminum Producers

The Department of Commerce also late Friday announced an affirmative ruling in its antidumping probe of aluminum foil from China.

The department’s preliminary determination stated Chinese exporters of aluminum foil sold their product at prices that resulted in preliminary dumping margins of 96.81% to 162.24% to be applied.

The petitioner in the case was the Aluminum Association Trade Enforcement Working Group.

According to the Department of Commerce, last year’s imports of aluminum foil from China were valued at an estimated $389 million.

The Aluminum Association released a statement praising the Department of Commerce’s decision.

“Following the positive preliminary countervailing duty determination this summer, the association and its foil-producing members are very pleased with this finding that again underscores the Commerce Department’s commitment to combatting unfair trade,” said Heidi Brock, president and CEO of the Aluminum Association, in the release.

“We appreciate Secretary Ross’s leadership in enforcing rules-based global trade. U.S. aluminum foil producers are among the most competitive producers in the world, but they cannot compete against products that are sold at unfairly low prices and subsidized by the Government of China.”

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A final determination is scheduled to be made Feb. 23, 2018.

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Iran didn’t need to take a cue from its arch enemy Saudi Arabia’s success with its Alcoa joint venture Ma’aden Aluminium smelter and downstream operations — just about every Middle Eastern natural-gas producer with production to spare has invested in aluminum smelting as an easy win outlet for vast natural gas reserves.

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Exporting natural gas as liquefied natural gas (LNG) is a profitable business, but building the infrastructure is costly. An alternative is building an aluminum smelter, which is also costly but arguably yields a higher value add.

According to AluminiumInsider, the Iranian Mines and Mining Industries Development and Renovation Organization’s (IMIDRO) Amir Sabagh told Platts the firm was in the midst of building a 300,000-metric-ton-per-annum aluminum smelter in the southern coastal province of Bushehr.

Funding is still problematic for Iranian firms, so it is no surprise the Chinese are involved, with China Nonferrous Metal Industry’s Foreign Engineering and Construction Co. largely footing the bill.

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

This afternoon in metals news, the U.S. Department of Commerce issues an affirmative preliminary ruling on carbon and alloy steel wire rod, Kobe Steel loses a quality seal on its copper products and the U.S. International Trade Commission launched a Section 337 investigation of amorphous metal and amorphous metal cores.

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DOC Issues Affirmative Ruling

The U.S. Department of Commerce announced Wednesday evening that it had issued an affirmative preliminary ruling in its antidumping duty investigation of carbon and alloy steel wire rod.

The investigation targets those products coming from Italy, Korea, South Africa, Spain, Turkey, Ukraine and the United Kingdom, with the DOC finding “that producers/exporters in these countries have sold carbon and alloy steel wire rod in the United States at less than fair value,” according to a DOC release about the announcement.

Kobe Steel Loses Quality Seals

The latest setback for embattled Kobe Steel, Japan’s third-largest steelmaker? The firm lost the quality seal for its copper products, the BBC reported.

The Japanese company continues to struggle on the heels of a quality data falsification scandal.

USITC Looks into Amorphous Metal

The U.S. International Trade Commission announced Wednesday that it launched a Section 337 investigation of amorphous metals and amorphous metal cores, which are used in things like electric transformers.

Free Download: The October 2017 MMI Report

According to the USITC release regarding the announcement, the investigation is based on a complaint filed by Metglas, Inc., of Conway, SC, and Hitachi Metal, Ltd., of Tokyo, Japan, on Sept. 19, 2017.

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Stakeholders of all stripes have weighed in on the North American Free Trade Agreement (NAFTA) this year, as renegotiation talks have now gone through four rounds.

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Negotiators from the U.S., Canada and Mexico most recently met Oct. 11-17 for a fourth round of talks in Arlington, Virginia. Despite progress on some issues, the talks overall seem to have hit an impasse.

As a result, the talks appear set to extend into 2018, which was previously hoped to be avoided, as elections are scheduled next year in each country. Among other things, U.S. proposals of a sunset clause and tighter automotive rules of origin have led to friction, as the U.S. attempts to negotiate what it considers to be a more beneficial deal while Canada and Mexico hope to preserve the deal (while also modernizing it for the 21st century).

According to a trilateral statement released by the Office of the United States Trade Representative, the negotiating parties made some progress on a few issues.

“Building on the progress made in prior rounds, the United States, Canada, and Mexico have now substantively completed discussions in the Chapter on Competition,” the statement reads.

“Additionally, negotiators made progress in several other negotiating groups, including customs and trade facilitation, digital trade, good regulatory practices, and certain sectoral annexes.”

However, it’s clear the parties are still far apart on a number of other issues.

In Oct. 17 remarks, Ildefonso Guajardo Villarreal, Mexico’s economy secretary, cautioned that negotiations must yield a “win-win-win” result, and that none of the parties want to end the process “empty-handed.”

“Working together, we can find the necessary balances to achieve a NAFTA consistent with the reality of our economies and societies,” he said.

While a number of groups — namely, U.S. workers associations — have petitioned the Trump administration to point out the negative impacts of NAFTA, others have worked to tout the agreement’s positive impacts.

Auto associations are among the latest to petition the administration in that latter capacity.

According to a Reuters report, major automakers, suppliers and auto dealers are launching a coalition to convince President Trump not to withdraw from the trade agreement (a threat the president has made on more than one occasion this year).

According to the report, auto trade associations representing General Motors, Toyota Motor Corp, Volkswagen AG, Hyundai Motor Co and Ford Motor Co, among other major automakers, on Tuesday launched the “Driving American Jobs” coalition, which includes an advertising campaign that aims to showcase the positive impacts of NAFTA on the automotive sector and the American workforce.

“American automakers are driving the revival of American manufacturing,” said Governor Matt Blunt, President of the American Automotive Policy Council (AAPC), in a prepared statement. “When you examine the data there’s no question that NAFTA has helped advance the global competitiveness of the U.S. auto industry sector. Now we have an opportunity to strengthen North America as a manufacturing powerhouse with a modern NAFTA that maintains the features that are working and makes improvements to benefit American workers and jobs. We look forward to working with the coalition, the Trump administration, members of Congress and all stakeholders to ensure American autos remain competitive in our global economy.”

The effort includes a website, www.drivingamericanjobs.com, which touts the trade agreement’s benefits to the sector and the American workforce, including a section of “American worker stories.”

“The American worker is in the middle of the greatest manufacturing comeback of all time,” the website’s homepage reads. “We’re winning with NAFTA. Tell Washington: Don’t change the game in the middle of a comeback.”

The effort comes on the heels of an Oct. 10 letter, undersigned by 310 local and state chambers of commerce, addressed to President Trump.

“We look forward to working closely with you and your Administration to grow the economy and create jobs through free and fair trade,” the letter concludes. “To help facilitate that growth, we urge you to support America’s workers, farmers, ranchers, and businesses of all sizes by protecting and preserving the deep economic ties and benefits the United States continues to enjoy under NAFTA.”

In a release from the U.S. Chamber of Commerce, U.S. Chamber President and CEO Thomas J. Donohue underscored the aforementioned sentiment.

“We’ve reached a critical moment, and the Chamber has had no choice but to ring the alarm bells,” Donohue said. “Let me be forceful and direct. There are several poison pill proposals still on the table that could doom the entire deal.

“The U.S. business community will stand up for an important agreement that makes North America stronger and more prosperous.”

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A fifth round of renegotiation talks is scheduled for Nov. 17-21 in Mexico City.