Industry News

A Washington, D.C. federal judge on Tuesday rejected the Cheyenne River Sioux Tribe’s bid to block operation of the Dakota Access pipeline on federal land in North Dakota, saying the tribe likely won’t be able to show that the federal government interfered with its exercise of religion on land outside the tribal reservation by allowing the project to go forward.

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Judge James Boasberg of the U.S. District Court for the District of Columbia rejected the tribes’ request for an injunction to withdraw permission issued by the U.S. Army Corps of Engineers for the last, eight-mile link of the oil pipeline underneath Lake Oahe in North Dakota. 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.

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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.

CME Group and Thomson Reuters will step down from providing the LBMA silver price benchmark auction, the London Bullion Market Association said on Friday, less than three years after they successfully bid to provide the process.

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“In consultation with the LBMA, CME Group and Thomson Reuters have decided to step down from their respective roles in relation to the LBMA Silver Price auction,” the LBMA said in a members update seen by Reuters.

The two will continue to operate and administer the silver auction until a new provider is appointed, the LBMA said. It will launch a new tender to appoint an alternative provider to operate the process “shortly”, it said.

“We would be looking to identify a new provider in the summer, and have the new platform up and running in the autumn,” an LBMA spokesman said.

The two companies launched the LBMA silver price in August 2014 to replace the telephone-based London silver “fix,” which had been in operation for more than a century, with an electronic, auction-based and auditable alternative.

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CME Group provides the electronic auction platform for the benchmark, while Thomson Reuters is responsible for administration and governance. The LBMA owns the intellectual property rights.

Philippines Might Consider Indonesia-Style Ore Export Ban

The Philippines may consider banning exports of raw minerals to encourage domestic processing and boost the value of shipments, an environment official said on Friday, as the government looks to extract more from its mining sector after a crackdown.

Investors are running up cobalt prices as automakers and suppliers stock up on the raw material for lithium-ion batteries as they prepare for an increase in electric vehicle production.

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Reuters reported that Shanghai Chaos Investments and Switzerland-based Pala Investments as two of the companies that invested heavily in cobalt last year, although the amount they’ve stockpiled is unknown.

On Dec. 1, cobalt was just around $30,000 per metric ton on the London Metal Exchange. As of Monday, one mt of cobalt was trading around $49,000. That’s an increase of 63% in three months.

Report: Trump Will Scrap EPA Clean Power Plan Next Week

President Trump is expected to issue orders next week that will begin the process of striking the Clean Power Plan and ending a moratorium on new coal mining on federal lands.

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The plan was largely opposed by manufacturers and metals producers. Its end will most likely bring a sigh of relief from utilities with coal-dominated generation mixes, as well, since they won’t have to alter their generation mixes within any deadlines.

The Institute for Supply Management said its manufacturing index rose to 57.5% from 56% in January, topping the MarketWatch-compiled economist consensus of 56.5%.

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Any reading above 50% indicates improving conditions.This is the highest reading since August 2014. 17 Of 18 U.S. manufacturing industries reported growth in February.

China Upset About EU Plate Steel Duties

China expressed concerns on Tuesday over what it said was increasing protectionism after European Union regulators imposed new duties on steel imports from the world’s biggest producer.

The European Commission is seeking to protect EU steelmakers while avoiding tensions with Beijing, which it sees as a possible ally against protectionism and climate change.

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It imposed definitive anti-dumping duties of between 65.1% and 73.7% on imports of heavy plate non-alloy or other alloy steel from China on Tuesday, confirming provisional tariffs set in October.

President Donald Trump today instructed the Environmental Protection Agency and U.S. Army Corps of Engineers to review and reconsider a 2015 rule known as the Waters of the United States rule, a move that could ultimately make it easier for agricultural and development interests to drain wetlands and small streams.
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Standing in the Oval office surrounded by farmers, home builders and county commissioners, Trump said his directive was “paving the way for the elimination of this very destructive and horrible rule” that should have only applied to “navigable waters” affecting “interstate commerce.”

The WOTUS rule has long been controversial, as it expands the definition of “waters of the United States” — and by extension the agency’s jurisdiction over private and public lands and their uses — are to include ditches, retention ponds, runoff streams and other small bodies of water. Many states contended it was an overreach of existing statutes under the Clean Water Act. The 6th Circuit Court of Appeals stayed the rule pending a court case, but that case is now moot as a result of President Trump’s actions.

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Manufacturers never liked the rule, which they considered a massive expansion of federal power not backed by law. The National Association of Manufacturers joined several states and other industry associations in filing the lawsuit against it.

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.”

A glut of idled river barges is clogging Mississippi River shorelines from St. Louis to New Orleans is leaving U.S. barge companies that haul grain, coal, steel and other bulk goods counting their losses.

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Even with record-large exports of corn and soybeans, typically a boon for shippers that haul grain to Gulf Coast export terminals, the collapse of coal shipments to the lowest levels in decades has left the dry bulk barge fleet chasing too little cargo.

In pursuit of rising grain volumes since 2014, many shippers expanded their fleets too quickly.

Barge lease rates paid to companies like Archer Daniels Midland Co.’s American River Transportation Company, privately held Ingram Barge and a handful of smaller operators are at 1-1/2-month lows and more than 30 percent below the five-year average for February.

Trump Proposes $54 Billion Defense Spending Increase

President Trump will propose a federal budget that dramatically increases defense-related spending by $54 billion while cutting other federal agencies by the same amount, according to an administration official.

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The proposal represents a massive increase in federal spending related to national security, while other priorities, especially foreign aid, will see significant reductions. How quickly that increase will turn into downstream metals purchases for defense contractors remains to be seen.

Flanked by some of the nation’s top manufacturing executives, President Donald Trump signed an executive order today directing federal agencies to each create task forces to identify burdensome regulations ready that could be removed, promising the end of “an impossible situation” for U.S. companies and new economic growth.

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The manufacturing CEOs also told Trump that while many of them have jobs that need to be filled, it’s still far too difficult for them to find skilled labor to fill those jobs.

ThyssenKrupp Sells Brazilian Venture, Ends Americas Investment

Thyssenkrupp AG has struck a deal to sell money-losing Brazilian steel mill CSA Cia Siderúrgica do Atlántico SA to Ternium SA for $1.3 billion (1.26 billion euros), ending a foray into the Americas that led to years of massive losses. Including debt, the deal gives CSA, the largest foreign investment project ever in Brazil, an enterprise value of $1.59 billion (15 billion euros).

The Federal Reserve is hinting at multiple short-term interest rate increases this year, a sign that the central bank expects the recent economic surge to continue and wants to limit the possible impact of inflation.

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Minutes from the Fed’s two-day meeting Jan. 31-Feb. 1 show that the tax cuts and spending proposals floated by the Trump administration continue to loom large over the central bank’s decisions. While the Fed chose to leave its interest rates unchanged at the meeting three weeks ago, investors widely expect two to three more rate hikes this year, perhaps as early as March, as the Fed continues on its path of gradually raising interest rates to combat gathering inflation.

Yet the central bank emphasized that it would adjust the pace of rate increases in line with the economy’s performance.

Fortescue Reports $1.2 Billion Profit

Australia’s Fortescue Metals Group Ltd. reported yesterday a 383% rise in interim net profit to $1.2 billion, surpassing the $319 million in the year-earlier period on the back of a surprise surge in iron ore prices… somehow this still fell short of market expectations.

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Analysts had forecast profit for the six months to Dec. 31 of about $1.5 billion, according to Thomson Reuters data.