Industry News

In a speech in Tampa, Fla., Wednesday afternoon, Republican Presidential Nominee Donald Trump outlined a seven-point plan to bring millions of jobs to the U.S. that involved labeling China a currency manipulator.

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He proposed renegotiating unconfirmed trade agreements such as the Trans-Pacific Partnership and told his audience he would pull the U.S. out of the North American Free Trade Agreement. In a first, Trump challenged China for “illegal activities” and vowed to label the country he did real estate business with a currency manipulator.

“I am going to instruct my Treasury Secretary to label China a currency manipulator,” he said. “Any country that devalues their currency in order to take unfair advantage of the United States — and all of its companies who can’t (then) compete —will face tariffs and to stop the cheating.”

Getting Tough With China

Trump also vowed to instruct the office of the U.S. Trade Representative to bring trade cases against China, both in this country and at the World Trade Organization. Read more

Tin prices are up as shipments have fallen off and the Philippines is, once again, considering a raw ore export ban in a bid to bolster local processing.

Tin Shipments Fall, Prices Rise

Falling shipments from top tin exporter Indonesia and predictions that a surge in mining in Myanmar is tapering off has led to a scramble for the metal, sending inventories to the lowest level in over seven-and-a-half years.

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This provides a potential for further price gains for the metal mainly used to make solder for the electronics industry, already the second-best performer among industrial metals this year.

Filipino Lawmaker Revives Ore Ban

A Filipino lawmaker has revived a proposal to ban exports of unprocessed minerals to spur domestic processing, in a move that may tighten global nickel supply and make it an even tougher business environment for miners in the world’s top producer.

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The Philippines has vast but largely untapped mineral resources, limiting the contribution of mining to its economy to less than 1%. The sector is now facing a tough regime under the government of firebrand President Rodrigo Duterte who has suspended some miners causing environmental destruction.

The London Metal Exchange and CME Group took action recently to, respectively, cut fees for traders and stop a spoofer.

We’re Sorry: LME Cuts Fees

The London Metal Exchange has cut fees in half for open outcry trades during August as a goodwill gesture after it had to vacate its premises because of structural problems, it said on Monday.

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Ring trading moved to its disaster recovery site in Chelmsford, east of London, in July after a potential safety issue was discovered in the building that houses its offices in London’s financial district.

CME Suspends Spoofer

CME Group, Inc. suspended a futures trader from its markets for spoofing on Monday, the exchange operator said, the latest regulatory action over the manipulative trading practice.

The company — which owns Comex, the Chicago Mercantile Exchange and other exchanges — barred Andrey Sakharov from trading for 60 days and could extend his ban, according to a disciplinary notice.

On multiple dates starting last month, Sakharov entered electronic orders in CME’s gold and natural gas markets that he did not intend to trade, the disciplinary notice said.

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The practice of placing bids to buy or offers to sell contracts with the intent to cancel them before execution is known as spoofing and is illegal. It is used to create an illusion of demand in markets, so that spoofers can influence prices to benefit their market positions.

Another Chinese steelmaker, Bohai Steel Group, has been given a bailout and Japan’s Tokyo Steel Manufacturing has left prices unchanged for three months.

Bohai Bailout

Bohai Steel Group, the indebted state-owned conglomerate, may receive help from a local government bailout fund to restructure its debts, the online financial magazine Caixin said over the weekend.

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Bohai Steel, which was created in 2010 through the combination of four manufacturers, holds liabilities of $28.9 billion (192 billion CNY) from 105 creditors, alongside assets of nearly CNY 290 billion, Caixin reported.

The Tianjin government plans to create a local asset manager to assist in the debt workout of Bohai Steel, alongside other troubled Tianjin enterprises, the magazine said.

Restructuring of the group represented the biggest since the global financial crisis, Standard & Poor’s analyst Christopher Lee told Reuters in March.

Tokyo Steel Leaves Prices Unchanged

Tokyo Steel Manufacturing, Japan’s top electric arc furnace steelmaker, said on Monday it would keep product prices unchanged for the third month in September, reflecting a slow recovery in its local market.

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Tokyo Steel’s pricing strategy is closely watched by Asian rivals such as POSCO, Hyundai Steel Co. and Baosteel, which all export to Japan.

28 Ambassadors to the U.S. have been asked by the chairman of the U.S. International Trade Commission to testify or submit comments on global aluminum trade and the U.S. industry as the ITC continues its work on a report on those topics for the House Ways & Means Committee.

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The 28 ambassadors hail from Australia, Brazil, China, France, Iceland, Italy, Korea, Bahrain, Canada, European Union, Germany, India, Japan, Kuwait, Malaysia, Mozambique, Norway, Qatar, Saudi Arabia, Turkey, Great Britain and Northern Ireland, Mexico, Netherlands, Oman, Russia, South Africa, United Arab Emirates and Vietnam.

An administrative law judge who suspended U.S. Steel Corp.‘s 337 case against 40 Chinese steel companies earlier this year improperly linked the case to the anti-dumping and countervailing duty investigations handled by a separate government agency — the Department of Commerce — according to an International Trade Commission opinion.

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The commissioners initially overturned the suspension on Aug. 5, but did not issue their opinion until yesterday.

US Steel’s Anti-Dumping Cases Not Significantly Related

The commissioners, in overturning the suspension of U.S. Steel’s case, determined ITC rules do not allow for the suspension of a 337 investigation simply in order to notify the Commerce Department as required by statute, and that elements of U.S. Steel’s case involving allegations of price fixing and transshipment “are, at most only partially related to anti-dumping and countervailing duties.”

Administrative Law Judge Dee Lord suspended the case on July 6 because Commerce was not notified of the investigation, and because elements involving price fixing and transshipment, at least partially, fell under the scope of Commerce’s antidumping and countervailing duty investigations.

U.S. Steel’s initial petition, filed on April 26, cites allegations of collusion and price fixing, transshipment to evade anti-dumping/countervailing duties, and theft of trade secrets via hacking by Chinese agents.

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U.S. Steel is seeking a general exclusion order to block all Chinese carbon and alloy steel products from the U.S. market, a limited exclusion order blocking imports from 40 listed steel companies and a cease-and-desist order for their alleged illegal practices.

U.S. Steel claimed that a hack similar to one that happened in 2011 to it and other companies was carried out to acquire the recipe and production process of a popular automotive steel alloy, dual-phase 980, that Baosteel and other Chinese companies began offering shortly after the hack,

U.S. trade authorities are considering asking for a reclassification of aluminum products in the wake of China’s exports of aluminum semi-finished products. Architecture billings in the U.S. were still up in July.

Semi-Finished Aluminum

The U.S. is consulting other governments on proposed changes it has drafted to the Harmonized Tariff Schedule (HTS) meant to stop a flood of “fake semi-finished” aluminum products entering the global market, almost always from China, that evade export duties while simultaneously qualifying for Chinese export subsidies.

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Aluminum industry and Customs and Border Protection sources told World Trade Online the U.S. proposal, still in draft form, would reclassify semi-finished products shipped specifically for remelting as unwrought, or raw aluminum. Semi-finished products are usually an aluminum alloy that are used for further manufacturing, but the fake semi-finished products are almost pure aluminum and cannot be used for any other purpose than remelting.

Charles Johnson, vice president of policy at the Aluminum Association, said a common fake semi-finished product exported from China is labeled for customs purposes as aluminum alloy coils, which are used for airplane wings, auto bodies, roofing and aluminum cans. The coils are sold – among other items – under HTS headers 76.06, which evades China’s 15% export duty imposed on unwrought aluminum and makes the product eligible for export subsidies that start as low as 13%.

Architecture Billings Up Again, Pace of Increase Slows

The Architecture Billings Index was positive in July for the sixth consecutive month, and 10th out of the last 12 months as demand across all project types continued to increase. An economic indicator of construction activity, the ABI reflects the approximate nine to 12 month lead time between architecture billings and construction spending.

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The American Institute of Architects (AIA) reported the July ABI score was 51.5, down from the mark of 52.6 in the previous month. This score still reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 57.5, down from a reading of 58.6 the previous month.

Saudi Arabia is pushing for an oil production cut among its fellow OPEC nations as well as other big producers such as Russia. In China, Beijing is pushing local governments to cut steel overcapacity.

Saudis: Let’s Make a Production Cut Deal

The Organization of Petroleum Exporting Countries will probably revive talks on freezing oil output levels when it meets non-OPEC nations next month as top exporter Saudi Arabia appears to want higher prices, according to OPEC sources, although Iran, Iraq and Russia present obstacles to a deal.

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Riyadh sharply raised expectations for a global production deal between on Thursday when Energy Minister Khalid al-Falih said Saudi Arabia will work with OPEC and non-OPEC members to help stabilise oil markets.

China Vows to Accelerate Steel Capacity Cuts

China should quicken capacity cuts in its bloated steel and coal sectors, the country’s top economic planning agency said on Tuesday, putting pressure on local officials to meet annual targets despite some worries the steps could hurt economic growth.

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China has promised to slash steel capacity by 45 million metric tons and coal capacity by 250 mmt this year, as it tries to rejuvenate two industries suffering from slowing demand and a massive supply glut.

China’s crude steel output fell in July and Glencore has shelved plans to sell a copper mine in Chile.

Chinese Steel Output Falls

China’s average daily crude steel output fell in July from a record, government data showed on Friday, providing some respite to overseas rivals angered by a torrent of cheap steel from Chinese mills in the past year.

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The output decline reflected China’s efforts to address a chronic glut, and analysts predict production may shrink further in the months ahead as more mills shutter. Some analysts predict output may shrink further in the months ahead as more mills shut in a sector undergoing its most significant — and painful — restructuring in two decades.

Glencore Rethinking Chilean Mine Sale

Glencore has shelved plans to sell a copper mine in Chile that was expected to fetch about $500 million, after failing to achieve a high enough price, according to people familiar with the situation.

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Along with other big mining companies, Glencore has been seeking to offload a range of assets to reduce debt following a commodities price crash, but a rally in raw materials markets and in the value of share prices of mining companies this year has taken away the need for urgent sales at any price.

Profits were down at Hong Kong Exchanges & Clearing Ltd. in the first half of 2016 and Rio Tinto and BHP Billiton are fighting an Australian iron ore mining tax.

Profits Down at HKEX in First Half

Core first-half earnings of the Hong Kong Exchanges & Clearing Ltd.’s commodity division slumped by 19% as trade in metals declined while hiring linked to a new spot commodities trading platform in China drove up costs, the exchange said on Wednesday.

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HKEX’s second-quarter net profit slumped 38% as falling trading volumes pushed down fees for buying and selling shares and commodities contracts.

BHP, Rio Blast Proposed Australian Iron Ore Mining Tax

Mining giants Rio Tinto Group and BHP Billiton on Tuesday issued statements attacking proposals for a new Australian mining tax as damaging and unfair. Brendon Grylls, leader of the National Party in Western Australia, has proposed an iron ore levy of $3.86 (Australian $5) a metric ton that would specifically target BHP and Rio.