This Morning in Metals: Mexico Reforms Labor Code in Push Toward USMCA Approval

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This morning in metals news, Mexico’s Senate approved changes to the country’s labor laws, Chinese iron ore futures notched their fifth consecutive monthly gain and U.S. steelmaker AK Steel reported its first-quarter earnings.

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Mexico Passes New Labor Laws

As NAFTA partners Canada, Mexico and the U.S. work toward approval of the United States-Mexico-Canada Agreement (USMCA), billed as the successor to NAFTA, Mexico’s Senate approved revisions to the country’s labor laws that addressed some of the U.S.’s complaints vis-a-vis low pay rates in the country.

Bloomberg reported the Mexican government passed the changes Monday, including granting workers the right to vote on unions and labor contracts via secret ballots.

United States Trade Representative Robert Lighthizer applauded the move by the Mexican government.

“The USMCA includes the strongest, most advanced, and most comprehensive labor obligations of any U.S. trade agreement,” he said in a prepared statement. “I commend the Mexican Congress and President Lopez Obrador for passing historic labor reforms as part of this agreement and thank President Trump for making strong labor commitments in the USMCA a top priority. These reforms will greatly improve Mexico’s system of labor justice and are exactly what labor leaders in the United States and Mexico have sought for decades. As we move forward with the ratification of USMCA, the Trump Administration will work closely with members of the United States Congress and the Mexican government to ensure these reforms are implemented and enforced.”

Article 23.3 of the UMSCA text addresses labor rights, including “freedom of association and the effective recognition of the right to collective bargaining.”

The legislatures of the three countries must approve the USMCA before it can go into effect.

Chinese Iron Ore Futures Rise

Iron ore prices have been riding a hot streak so far this year, aided by supply-side disruptions in Australia and Brazil.

In addition, Chinese iron ore futures have picked up steam, too, notching their fifth straight month of gains this month, Reuters reported.

According to the report, the most-traded iron ore contract on the SHFE jumped 2.1% to 639 yuan ($94.84) per ton.

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AK Steel Reports 1Q 2019 Earnings

Ohio-based AK Steel unveiled its first-quarter earnings this week, reporting adjusted EBITDA of $160.9 million, up 36% year over year.

Including a $77.4 million charge associated with the firm’s closure of its Ashland Works, AK Steel posted a net loss of $4.5 million in the country, and an adjusted net income of $72.9 million when excluding the Ashland Works special item.

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