This Morning in Metals: EU Expresses Concern About US Steel Imports Probe

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This morning in metal news, the European Union urges the United States to focus the scope of its national security probe — launched by President Donald Trump’s administration in April — into steel imports; nickel prices continue to tumble amid concern about global oversupply; and China’s attempt to tackle its debt could impact metal markets throughout the second half of 2017.

EU Officials Express Concern About US Steel Import Probe

On the heels of President Donald Trump’s first round of overseas visits, there remains uncertainty about the president’s stance on several issues, including whether or not Trump will pull the U.S. out of the 195-member Paris climate accord (the president is expected to make an announcement on that subject this afternoon). In addition, EU officials are concerned about the scope of the Trump administration’s national security probe into U.S. steel imports, Reuters reported.

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The probe would have negative effects on both U.S. steel producers and manufacturers which use steel, a written statement from the European Commission to the U.S. Department of Commerce argued. The EU is also hoping the probe will zero in on issues of national security and won’t broadly impact exporters around the world, should the Trump administration decide to adjust steel import policy.

Nickel Continues to Roll Downhill

The price of nickel continues to fall, this time to an 11-month low on Thursday, Reuters reported.

At $8,810 per ton, nickel hit its lowest price since last June, falling 12% this year alone — the largest drop among major base metals, according to the Reuters report.

The resumption of Indonesian exports of nickel and the potential reopening of mining operations in the Philippines contributed to concerns about oversupply of the metal.

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China Aims to Deal with Debt

China is seeking to rein in its debt levels, which could lead to less demand for metals in the second half of the year according to analysts, the Financial Times reported.

Moody’s recently delivered one-notch downgrade of China’s credit rating — from Aa3 to A1 — is one indicator of Beijing’s financial challenges. In Beijing’s efforts to tighten its lending rules, analysts are issuing a cautionary tone with respect to the move’s impact on metal markets through the second half of 2017.

In short, demand for a wide range of industrial metals could see a decline in China. That demand level will be something to monitor as the year progresses, as will the Trump administration’s probe into U.S. steel imports, for which China — the world’s largest steel producer — is expected to be a primary target.

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