This morning in metals news, the U.S. and Mexico reportedly reached a deal on the North American Free Trade Agreement (NAFTA), China’s Baosteel posted a surge in first-half profits and Japan’s steel output dropped unexpectedly in July.
According to media reports, the U.S. and Mexico have reached a preliminary deal on NAFTA, the 24-year-old trilateral trade deal (as Canada has been on the sidelines of the recent talks).
According to Bloomberg, an announcement on the matter is expected later today, with the two countries expected to announce a bilateral agreement.
President Trump tweeted this morning: “A big deal looking good with Mexico!”
MetalMiner’s Take: “A newly negotiated NAFTA agreement that would substitute quotas for tariffs will not necessarily have a dramatic impact on either domestic steel prices or lead to dramatic steel price declines, for a host of reasons. Metal-buying organizations should expect the new NAFTA agreement to contain tougher rules on country of origin, meaning Chinese materials will need to undergo substantial value-add in Mexico before arriving to the U.S. to come in under NAFTA duty rates. If Mexico and the U.S. come to a revised NAFTA agreement as expected, buying organizations should plan on Trump staying tough on trade, as he will use the NAFTA example to support his approach.”
Baosteel Profits Surge
Japan’s Crude Steel Output Drop
Japan’s crude steel output dropped unexpectedly in July, according to an S&P Global Platts report.
According to data released by the Japan Iron and Steel Federation, output in July dropped 2% year on year and 3.8% from June.