This morning in metals news, China’s Finance Ministry announced new tariffs on U.S. goods, Germany’s thyssenkrupp is suing over the European Commission’s decision to block a proposed merger with Tata Steel and iron ore prices could continue to slide.
China to Impose New Tariffs
China’s Ministry of Finance announced it will impose a 5% or 10% tariff on an additional $75 billion worth of U.S. goods, effective Sept. 1, CNN reported.
The move comes after the U.S. announced it would impose a 10% tariff on an additional $300 billion in Chinese goods as of Sept. 1.
The Ministry of Finance also said it will resume tariffs on U.S. automobiles and automotive parts, according to the report, which will come in at 25% or 5%.
thyssenkrupp Sues European Commission Over Blocking of Tata Merger
German firm thyssenkrupp’s planned merger of its European operations with those of Tata Steel hit a wall earlier this year when European competition authorities blocked it citing concerns over higher prices and a decline in market choices.
According to German television station Deutsche Welle, thyssenkrupp has filed a complaint in a European court, claiming the European Commission’s decision to block the merger did not take into “adequate account the structural importance of imports into Europe.”
In a statement Thursday, the German firm criticized the European Commission’s decision.
“The consolidation of the European steel industry is still right and necessary which is also shown by the current critical market situation for steel manufacturers,” said Donatus Kaufmann, member of the German firm’s executive board. “Overcapacities and high import pressure from Asia create an environment in which the planned joint venture with Tata Steel would not have impaired competition. We regret the European Commission’s decision and regard it as too far-reaching and wrong. That is why we are filing a complaint.”
Falling Iron Ore
Iron ore’s price slide may be set to continue.
Prices for the steelmaking raw material surged earlier this year to over $120 per ton, powered by supply-side support from Brazil and Australia.
In recent weeks, however, the iron ore price has fallen back to earth.
According to the Australian Financial Review, Liberum Capital has downgraded its iron ore forecast, predicting the steelmaking material will average around $75 per ton in the second half of 2019 and could average $50 per ton in 2020.