Author Archives: Fouad Egbaria

Source: wto.org

This morning in metals news, China went to the World Trade Organization to file a complaint regarding the U.S.’s $200 billion worth of tariffs announced Monday, Nucor resumes operations in the Carolinas following Hurricane Florence and copper prices rally.

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China Goes to the WTO

Following the U.S.’s announcement Monday of its intention to slap $200 billion worth of tariffs on imports from China as of Sept. 24, China has gone to the World Trade Organization (WTO) to file a complaint, Reuters reported.

The U.S. announced plans to impose a 10% tariff on $200 billion worth of Chinese imports on Monday.

Nucor Operations Restart in North Carolina, South Carolina

After halting its operations in the Carolinas last week ahead of Hurricane Florence, Nucor’s plants in the two states are back up and running, S&P Global Platts reported.

Copper Prices Rise

Despite an escalation in trade tensions between the U.S. and China, the price of copper rallied Tuesday, Reuters reported.

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LME copper jumped 1.4% Tuesday, according to the report.

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The Trump administration announced after markets closed Monday that it would go through with the imposition of a 10% tariff on $200 billion worth of Chinese goods.

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The tariffs — stemming from the United States Trade Representative’s (USTR) Section 301 investigation of Chinese trade practices — will go into effect Monday, Sept. 24, and will escalate to 25% as of Jan. 1, 2019.

Taking into account the $50 billion in tariffs that have already gone into effect, the additional $200 billion means about half of the value of Chinese exports to the U.S. is now subject to tariffs (in 2017, the value of U.S. imports of Chinese goods hit just over $505 billion).

However, the tariffs don’t stop there — the U.S. will add $267 billion in tariffs if China responds with retaliatory tariffs, according to a statement from the White House.

“For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies,” the White House statement read. “We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But, so far, China has been unwilling to change its practices.

“To counter China’s unfair practices, on June 15, I announced that the United States would impose tariffs of 25 percent on $50 billion worth of Chinese imports. China, however, still refuses to change its practices – and indeed recently imposed new tariffs in an effort to hurt the United States economy.”

According to a USTR release, the finalized list of products in this $200 billion tranche of tariffs includes 5,745 full or partial lines out of the originally proposed 6,031 tariff lines.

“Included among the products removed from the proposed list are certain consumer electronics products such as smart watches and Bluetooth devices; certain chemical inputs for manufactured goods, textiles and agriculture; certain health and safety products such as bicycle helmets, and child safety furniture such as car seats and playpens,” the USTR release states.

U.S. Rep. Kevin Brady (R-TX), chairman of the House Ways and Means Committee, in a statement expressed support for measures aimed at addressing alleged unfair trade practices by China, but offered a cautionary note vis-a-vis the impact of tariffs.

“Any time tariffs are imposed I worry that Americans will be forced to pay extra costs – in this case on nearly half of U.S. imports from China,” Brady said. “I continue to emphasize that the ultimate means to create an effective outcome is for President Trump and President Xi to engage constructively to develop a long-term and profound solution that levels the playing field for American manufacturers, farmers, and workers.

“Until China comes to the table, one way to relieve pressure on Americans is establish an effective and timely process to allow products to be excluded from these additional tariffs if tariffs would make it harder for us to sell more ‘Made in America’ products globally.”

Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, disapproved of the decision.

“The U.S. economy runs on pro-growth policies, but that’s not what tariffs on $200 billion worth of Chinese goods deliver,” he said in a statement. “The administration has serious issues to resolve with China on market access, unfair subsidies, technology theft, and cybersecurity. But there are less harmful ways to truly achieve free and fair trade with China.

“Today’s decision makes clear that the administration did not heed the numerous warnings from American consumers and businesses about rising costs and lost jobs on Main Street, in factories, and on farms and ranches across the country. Both countries should stay at the negotiating table, and the U.S. should continue working with its allies to seek alternative solutions.”

On the other hand, Alliance for American Manufacturing President Scott Paul supported the move to put additional pressure on China.

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“Strong trade enforcement against China’s persistent violations of trade laws, including the theft of American trade secrets, is long overdue,” Paul said. “These tariffs should compel China to finally address unfair trade practices. America has the leverage in this economic relationship, and it’s about time we use it to defend our workers and businesses who can compete with anyone on a truly level playing field.”

The full list of Chinese products included within the latest round of tariffs can be found here.

The September Monthly Metal Index (MMI) report is in the books.

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The month saw seven of our 10 MMIs posting declines, with two staying put and one increasing (Construction).

A few highlights from this month’s report:

    • U.S. Midwest aluminum premiums fell for the second straight month.
    • U.S. construction spending in July was up only slightly from June but posted a much larger year-over-year increase.
    • The LME copper price continues to slide, fall 6.21% month over month as of Sept. 1.
    • In the world of renewables, a team of researchers published a study on the use of solar panels and wind turbines in the Sahara Desert.

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Read about all of the above and much more by downloading the September 2018 MMI Report below:

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This morning in metals news, President Donald Trump again expressed support for imposing tariffs on imports (as the U.S. considers further tariffs on Chinese goods), shares of the Chinese aluminum giant China Hongqiao fell, and base metals prices are down on the prospect of escalating tariffs between China and the U.S.

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Tweeting for Tariffs

On Monday morning, President Trump expressed support yet again for his administration’s strategy of tariffs:

Tariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country – and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be “Tariffed!”

He also made direct reference to the steel industry:

Our Steel Industry is the talk of the World. It has been given new life, and is thriving. Billions of Dollars is being spent on new plants all around the country!

The U.S. has already slapped a total of $50 billion worth of tariffs on Chinese goods, and, according to The New York Times, the president is expected to announce an additional $200 billion in tariffs on Chinese goods this week, which would mark a significant escalation in tensions between the two countries.

China Hongqiao Shares Fall

Shares in Chinese aluminum maker China Hongqiao dropped on the news of new fees announced by Shandong province, Reuters reported.

Shares fell by as much as 8.5% Monday after falling nearly 16% Friday, according to the report.

Base Metals Prices Drop

Speaking of trade tensions, said tensions have had a depressive effect on base metals prices, according to Reuters.

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Base metals prices fell across the board Monday in anticipation of an expected announcement this week from the U.S. regarding an additional $200 billion in tariffs on Chinese goods.

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Before we head into the weekend, let’s take a look back at the week that was and some of the top metals storylines here on MetalMiner:

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This morning in metals news, the United Steelworkers union is reportedly not happy with U.S. Steel’s latest contract proposal, Vice President Mike Pence touts a steel resurgence in Michigan and South Korean firms seek an exemption from the E.U. steel safeguards.

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Union Not Happy with U.S. Steel Proposal

Contract talks are ongoing between U.S. Steel and the union representing its workers, United Steelworkers. However, according to a report by the Times of Northwest Indiana, the firm’s latest proposal wasn’t met positively by the union.

Pence Visits Michigan, Talks Steel Comeback

In a visit to a steel processing facility in Grand Rapids, Michigan, Vice President Mike Pence touted the administration’s steel tariff and its role in aiding the steel industry, the Detroit News reported.

“Get ready to get even busier,” the vice president told company officials and hard-hat workers during a speech at the steel processing facility, according to the report.

South Korea Seeks Exemptions

South Korean steel producers are looking to win exemptions on provisional steel safeguards imposed by Europe, S&P Global Platts reported.

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Steel product exports from South Korea into Europe amount to 3.24 million mt per year, according to the report.

Nucor Suspends Operations at Two Mills Ahead of Hurricane Florence

Nucor halted operations at two of its mills in the Carolinas ahead of the expected impact of Hurricane Florence on Thursday, according to an Argus report.

The plants in question are Nucor’s Berkeley, South Carolina sheet mill and its Hertford, North Carolina plate mill.

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This morning in metals news, prices of steel and raw materials in China are slumping, India is eyeing the No. 2 spot in the list of top global crude steel producers and copper jumps as the euro rises.

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Prices Drop in China

Prices of steel and raw materials in China have continued to decline, all the way down to multiweek lows, according to a Reuters report.

The tumble comes as Beijing considers output curbs, according to the report.

India Wants No. 2 Steel Producer Spot

India has aspirations to climb the global steel producer list, moving to No. 2, according to the Economic Times.

According to the report, the Indian government’s National Steel Policy 2017 set a goal for 2030 of 300 million tons of steel production per year.

Copper, Euro Rise

The copper price rose Tuesday in tandem with a rising euro, Reuters reported.

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LME three-month copper jumped 0.7%, while the most-traded copper contract on the SHFE moved up 0.5%.

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This morning in metals news, July shipments by U.S. steel mills were up compared to last year, U.S. raw steel production for the week ending Sept. 8 was up 9.8% compared with the same week last year and the Aluminum Association asked the Trump administration to provide quota-free tariff exemptions for Canada and Mexico.

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Steel Shipments Surge in July on Year-Over-Year Basis

U.S. steel mill shipments in July were up 5.8% compared with July 2017, according to a report by the American Iron and Steel Institute (AISI).

Mills shipped over 7.9 million net tons of steel in July 2018. However, shipments were down 1.0% from the previous month.

Steel Production Rises

For the week ending Sept. 8, U.S. raw steel production hit 1.88 million tons at a capacity utilization rate of 80.2%, according to an AISI report, marking a 9.8% increase from the same week in 2017 (when the capacity utilization rate was 73.4%).

In addition, production jumped 0.5% from the week ending Sept. 1, 2018.

Aluminum Association Asks for Quota-Free Tariff Exemptions for Canada, Mexico

As the U.S. continues a second leg of negotiations on NAFTA — this time with Canada after having reached an agreement in principle with Mexico — the Aluminum Association sent a letter to the Trump administration calling for quota-free tariff exemptions on aluminum for Canada and Mexico.

The two countries were hit with the Section 232 tariff after their temporary exemptions expired June 1.

“Even more importantly, though, I encourage the Administration to use this negotiation process to address any national security questions specific to Canada and Mexico raised in the Commerce Department’s Section 232 report,” wrote Heidi Brock, president and CEO of the Aluminum Association, in the letter to U.S. Trade Representative Robert Lighthizer. “A successful negotiation for a modernized NAFTA should resolve these concerns, and I encourage you to recommend that President Trump provide a full exemption – without quotas – for aluminum imports from Canada and Mexico.

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“As the U.S. aluminum industry is in a deficit market, limiting access to aluminum suppliers in the NAFTA region will be a barrier to continued U.S. growth and investment.”

The Rare Earths Monthly Metals Index (MMI) dropped one point this month, falling for a reading of 17.

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China Raises Quota for Rare Earth Smelting, Separation

On Aug. 27, China’s Ministry for Industry and Information Technology announced it would increase the quota on rare earth smelting and separation.

The quota increased 15% to 115,000 tons, according to Reuters.

Caught in the Crossfire

The South China Morning Post reported on a Chinese company that could get caught up in the escalating trade war between the U.S. and China.

Shenghe Resources Holding, as the Post notes, is one firm in a consortium that has invested in the Mountain Pass mine in the U.S. (which was the only operating rare earths mine in the U.S. before owner Molycorp filed for bankruptcy in 2015).

If the back and forth results in China imposing a tariff on U.S. rare earths, as the article notes, that could throw a wrench into the consortium’s plans to export materials from the mine to China and, moreover, impact the mine’s viability.

Rare Earth Recycling

The US Federal Laboratories Consortium recently recognized a team of researchers for their work on a rare-earth magnet recycling process.

According to Recycling International, researchers from the Critical Minerals Institute and Ames Laboratory were honored with the Notable Technology Development Award for their work on a rare-earth magnet recycling process.

”A unique strength of this technology is that operational hazards and negative environmental impacts associated with acid-based dissolution process are eliminated without sacrificing purity, efficiency and potential economic impact” said Ikenna Nlebedim, the lead investigator for the research, in an Ames Laboratory release on the news.

Given China’s overwhelming dominance of the global rare earths market, the U.S. has continued to explore options to move away from dependence on foreign sources of the materials. According to the release, the process entails magnets being “dissolved in water-based solutions, recovering more than 99 percent purity rare earth elements.”

According to the Ames Laboratory announcement, collaboration is ongoing with a commercial partner, Infinium Metals, to produce metal ingots at a larger scale.

Per the release, patents are being filed for the researchers’ recycling process.

Actual Metal Prices and Trends

Yttrium fell to $32.88/kilogram, down 0.5%. Terbium oxide fell 0.5%, down to $427.39/kilogram.

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Neodymium oxide dropped 1.5% to $46,245.80/mt. Europium oxide fell 6.8% to $43.10/kilogram. Dysprosium oxide fell 0.9% to $167.30/kilogram.

The Renewables Monthly Metals Index (MMI) dropped one point this month, falling for a September reading of 104. 

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Making the Desert … Green?

Forms of renewable energy, like wind and solar, have gained momentum in recent years, both in practice and in popular support.

One place that could benefit from a renewable revolution? The Sahara Desert.

According to a BBC report, researchers claim installation of wind turbines and solar panels in the desert there could have the effect of doubling the amount of rainfall it receives, ultimately yielding more plants and life of all kinds.

The researchers published their study in the journal Science.

“In this study, we used a climate model with dynamic vegetation to show that large-scale installations of wind and solar farms covering the Sahara lead to a local temperature increase and more than a twofold precipitation increase, especially in the Sahel, through increased surface friction and reduced albedo,” the study’s abstract states. “The resulting increase in vegetation further enhances precipitation, creating a positive albedo–precipitation–vegetation feedback that contributes ~80% of the precipitation increase for wind farms. This local enhancement is scale dependent and is particular to the Sahara, with small impacts in other deserts.”

E.U. Lifts Ban on Solar Panels from China

The E.U. has opted to lift a restriction on imports of solar panels from China, the South China Morning Post reported.

The 28-member bloc initially imposed duties on the solar panels in 2013, but the European Commission announced it would not extend them. The duties expired at midnight on Sept. 3.

“After considering the needs of both producers and those using or importing solar panels the Commission decided it was in the best interests of the EU as a whole to let the measures lapse,” the European Commission release states. “This decision also takes into account the EU’s new renewable energy targets.”

Actual Metal Prices and Trends

Japanese steel plate rose 7.8% month over month to $54.01/mt. Korean steel plate fell 0.8% to $108.36/mt. Chinese steel plate rose 1.4% to $121.96/mt.

U.S. steel plate jumped 1.1% to $309.07/st.

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Chinese cobalt dropped 0.5% to $2,915.02/mt.