This Morning in Metals: Iron Ore Soars After Vale Warning

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This morning in metals news, the iron ore price continues to rise, the U.S. cut its import tariff on Turkish steel in half and copper is on its way to its fifth consecutive weekly loss.

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Iron Ore Rises After Vale Warning

The iron ore price has received several supply-side boosts this year, stemming from operational failures at miner Vale’s operations in Brazil and tropical cyclones in Australia.

An update from Vale regarding its Gongo Soco mine has offered even more support to the iron ore price, which climbed over the $100 per ton mark for the first time in five years, the Financial Times reported.

Earlier this year, a dam breach occurred at Vale’s Corrego do Feijao mine in Brumadinho, killing hundreds. Now, Vale is issuing a warning about a potential breach at its Gongo Soco mine’s Sul Superior dam.

“As soon as a movement was detected on the northern slope of a pit at the Gongo Soco mine in Barão de Cocais, Minas Gerais, paralyzed since 2016, Vale immediately informed the competent authorities and has taken a series of necessary measures to update the region’s population about the situation in the pit and at the Sul Superior dam, which is approximately 1.5 km from the mine area,” Vale said in a prepared statement.
“It should be noted that there are no technical elements so far that point towards an eventual slide of the northern slope of the Gongo Soco Mine, which could act as a trigger for a breach of the Sul Superior Dam. Even so, Vale is reinforcing the alert and readiness level for a worst-case breach scenario.”

U.S. Cuts Turkish Steel Tariff

Amid a year of diplomatic tension between the U.S. and Turkey, the U.S. last year doubled its Section 232 tariffs on steel and aluminum against the latter, raising them to 50% and 20%, respectively.

This week, however, the White House announced it would cut the steel tariff in half, back to the original 25% rate.

In a statement, the White House said steel imports fell 12% in 2018 compared with the previous year, including a 48% decline in imports of steel from Turkey.

“Given these improvements, I have determined that it is necessary and appropriate to remove the higher tariff on steel imports from Turkey imposed by Proclamation 9772, and to instead impose a 25 percent ad valorem tariff on steel imports from Turkey, commensurate with the tariff imposed on such articles imported from most countries,” the White House said. “Maintaining the existing 25 percent ad valorem tariff on most countries is necessary and appropriate at this time to address the threatened impairment of the national security that the Secretary found in the January 2018 report.”

Copper Down Again

The price of copper is on its way to its fifth consecutive weekly loss, Reuters reported.

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According to the report, LME copper dropped 1.4% this week, moving near a 3 1/2-month low reached on Monday.

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