Author Archives: Fouad Egbaria

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This morning in metals news, India has plans to impose tariffs on U.S. goods in response to the latter’s steel and aluminum tariffs, workers at the Port Talbot facility in Wales are wary of the impacts of the U.S. steel tariff and copper approaches a two-week low.

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India Strikes Back With Retaliatory Tariffs

India announced that it plans to impose tariffs on U.S. goods, a move that strikes back against the U.S. for its tariffs on steel and aluminum, CNN reported.

According to the report, the proposed tariffs would impact 30 U.S. goods at a value of $241 million.

Port Talbot Workers Apprehensive of Tariff Repercussions

Workers at the Port Talbot Steelworks plant in Wales are worried the U.S. tariff on steel will lead to even more steel being dumped from China, The Guardian reported.

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According to the report, the Port Talbot plant sells 10-12% of its output to the U.S.

LME Copper Draws Near a Two-Week Low

The price of LME copper slipped to near a two-week low, Reuters reported.

Copper fell 0.2% Monday to $7,006.50 per ton, according to the report.

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

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This morning in metals news, Trump announces $50 billion in tariffs on Chinese goods, China responds to warn retaliatory tariffs are imminent and E.U. members are supportive of retaliatory measures against the U.S.’s Section 232 tariffs.

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Trump Announces $50M in Tariffs on China

In line with media reports earlier this week, President Donald Trump announced Friday that the U.S. will impose $50 million in tariffs on Chinese goods, particularly related to technology, Reuters reported.

China Says Retaliatory Tariffs Coming

On the heels of the U.S. tariff announcement, China says it plans to impose tariffs of the “same scale,” according to a CNBC report.

E.U. Keen on Payback for Steel Tariff

Speaking of retaliation, E.U. nations are ready to retaliate agains the U.S. and its 25% steel tariffs, Reuters reported.

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E.U. countries unanimously voted in support placing import duties of $3.3 billion of U.S. goods.

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This morning in metals news, China produced record steel output in May, ThyssenKrupp is looking to renegotiate its joint venture with Tata Steel, and China threatens to scrap trade deals with the U.S. as the latter gets ready to reveal of a list of Chinese goods that would be targeted for tariffs.

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Chinese Steel Output in May

Despite a government campaign to curb pollution, Chinese steel production hit a record high in May, Reuters reported.

Production hit 81.13 million tons last month, according to the report.

ThyssenKrupp Wants to Renegotiate Tata Deal

ThyssenKrupp and Tata Steel in September 2017 announced a deal to merge their European operations — but the Financial Times reported the German firm is now looking to renegotiate the deal.

Escalating Tensions

Trade deals between the U.S. and China will be scrapped if the U.S. moves forward with previously announced plans to impose at least $50 billion in tariffs on Chinese goods, according to a CNBC report.

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The deals, reached in efforts to deescalate trade tensions, included pledges to buy more U.S. soybeans and natural gas, according to the report.

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The U.S. imported 2.5% less steel through the first five months of 2018 compared with the same period in 2017, according to a recent report from the American Iron and Steel Institute (AISI).

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Citing data from the Department of Commerce’s Steel Import Monitoring and Analysis (SIMA), finished steel imports through the first five months of the year hit 15,379,000 net tons (NT), down 2.5% from the first five months of 2017.

According to the AISI report, the finished steel import market share for May settled in at an estimated 25%, just under the 26% share for the year to date.

By products, in the year to date several have posted significant import increases, including: hot rolled sheets (up 36%), plates in coils (up 36%), mechanical tubing (up 22%), line pipe (up 22%) and oil country goods (up 19%).

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By country, the largest finished steel import permit applications in May came from:

  • Germany (138,000 NT, up 15% from April preliminary)
  • Japan (123,000 NT, up 25%)
  • South Korea (113,000 NT, down 76%)
  • Italy (80,000 NT, up 34%)
  • Taiwan (76,000 NT, down 34%)

Through the first five months, however, South Korea led the way with 1,531,000 NT (down 1%), followed by Japan (615,000 NT, down 7%) and Germany (547,000 NT, up 13%).

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This morning in metals news, one report says President Trump could impose tariffs on China as early as this Friday, copper drops to a one-week low and a Mexican presidential candidate says failure to renegotiate the North American Free Trade Agreement (NAFTA) cannot be “fatal” for the Mexican people.

China Tariffs Could be Coming

According to a Politico report, President Trump could slap tariffs on Chinese goods as early as this Friday.

The Trump administration on Friday is planning on publishing a list of the products that will be affected, Politico reports.

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Chinese Demand Impacts Copper Price

The copper price slid to a one-week low on account of concerns about demand in China and a strengthening dollar, Reuters reported.

Labor negotiations at the Escondida mine in Chile will have a major impact going forward on the direction of the price.

Presidential Candidate Brushes Off Possible NAFTA Collapse

Negotiating teams from Canada, the U.S. and Mexico last year were hoping to reach a deal on NAFTA before elections in the three countries, including the July 1, 2018 presidential election in Mexico.

However, negotiations dragged on and a consensus on a modernized NAFTA has yet to be reached. Now, it is less than a month away until the Mexican presidential election, when the people of Mexico will choose someone to replace incumbent Enrique Peña Nieto.

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During a presidential debate this week, leftist candidate Andres Manuel Lopez Obrador said he supports the continuation of NAFTA, the 1994 trilateral trade agreement, but that its end “cannot be fatal for Mexicans,” Reuters reported.

In case you missed it, our latest round of Monthly Metals Index (MMI) reports is in the books.

Tariffs once again dominated the headlines last week.

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With negotiations breaking down, the U.S. elected to impose the Section 232 steel and aluminum tariffs on the European Union, Canada and Mexico. The trio previously had a temporary exemption, which had been extended by 30 days the previous month, moving the deadline back to June 1.

However, the U.S. opted to slap the tariffs on the metals, sparking responses from each with respect to retaliatory measures.

Trade relations took another hit this past weekend, as President Donald Trump announced he would withdraw support from the G7 communique, bristling at comments Canadian Prime Minister Justin Trudeau had made regarding the U.S. tariffs on steel and aluminum.

Aside from policy, a few other highlights from the past month in metals:

  • The Aluminum MMI picked up another point for an index reading of 101.
  • U.S. automotive sales bounced back by 2.0% in May after a down April.
  • Construction spending in April rose 1.8% from the previous month, according to Census Bureau data.
  • Both LME nickel prices and stainless steel surcharges ticked up last month.

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Read about all of the above and much more by downloading the June MMI report below.

Trade relations between the U.S. and the European Union are in a tough spot these days, as the U.S. imposed its Section 232 steel and aluminum tariffs on the 28-member bloc (plus Canada and Mexico) recently, a decision yielding much consternation from the U.S.’s trading partners.

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European Steel Association President Geert Van Poelvoorde, speaking before European Steel Day last week, addressed the issue of the U.S. tariffs.

“The European steel industry condemns the US import tariffs on steel. This protectionist trade action is absurd – it hits the US’ own allies hardest,” Van Poelvoorde said. “We also now expect to face a large loss of market share in the US, a market that accounts for 16% of EU exports.”

Van Poelvoorde also reiterated the claim that the focus should be on global overcapacity (implicitly pointing the finger at China).

“There is the need to continue discussions with the US to address the root cause of this trade dispute: global steel excess capacity,” Van Poelvoorde. “We have to deal collectively with countries that subsidise production in order to target export markets, and there are international fora for this process. Unilateral measures are not the answer.

“In the meantime, we call for an EU safeguard to be deployed as quickly as possible – the longer the delay, the greater the injury to the European steel industry will be.”

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Referring to Canadian Prime Minister Justin Trudeau, President Trump on Sunday announced his decision to withdraw from the G7 communique.

“Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!” he tweeted.

Then, on Sunday, German Chancellor Angela Merkel announced the E.U. plans to strike back against the U.S. steel and aluminum tariffs with duties of its own, Reuters reported.

Liquid steel.

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This morning in metals news, U.S. steel shipments in April were down from the previous month but are up for the year to date, U.S. Steel announces it plans to add more than 800 jobs this year and Tata Steel workers in Europe are questioning the company’s planned joint venture with German steelmaker Thyssenkrupp.

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Steel Shipments Fall in April

According to an American Iron and Steel Institute (AISI) report, in April U.S. steel mills shipped 7,798,326 net tons, which marked a 6.0% decrease from the previous month, March 2018, but a 5.0% increase from April 2017.

Through the first four months of the year, shipments are up 4.0% compared with the first four months of 2017, according to the report.

Going to Work

U.S. Steel has announced this year that it plans to restart the A and B blast furnaces at its facility in Granite City, Illinois.

Of course, restarted capacity means workers will be needed to operate the plant. The steelmaker announced it plans to add more than 800 jobs this year at the Illinois plant.

Workers Question Tata-Thyssenkrupp JV

Last September, Tata Steel and Thyssenkrupp announced plans to form a joint venture of their European operations, but Tata Steel workers in Europe are questioning the marriage, according to a Reuters report.

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According to the report, Tata Steel’s European Works Council said details still need to be sorted out before it will grant its stamp of approval on the planned joint venture.

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This morning in metals news, Germany announced the E.U. would also enact trade measures against U.S. steel and aluminum, Austrian company Voestalpine says there are delays in the tariff exclusion request process, and exemptions are looking increasingly unlikely for Europe.

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Merkel Says E.U. Will Retaliate With Tariffs on U.S. Steel, Aluminum

German Chancellor Angela Merkel said the E.U. plans to retaliate on the U.S. steel and aluminum tariffs with tariffs of its own, Reuters reported.

The announcement capped a tense weekend, during which President Trump and Canadian Prime Minister Justin Trudeau have sparred over trade and the president tweeted that he would not endorse the G7 communique.

Delays in Section 232 Exemption Requests

Austrian firm Voestalpine has yet to receive a response from the U.S. with respect to its Section 232 tariff exclusion requests, Reuters reported.

According to the report, the firm said about one-third of its U.S. sales would be affected by the U.S. tariffs, which went into effect June 1 for the E.U. (after the expiration of a temporary exemption).

Exemptions for E.U.?

European officials are still figuring out how to negotiate an exemption from the U.S. steel’s and aluminum tariffs, as the bloc’s temporary exemption from the tariffs expired and the U.S. decided to impose them ahead of the June 1 deadline.

But, according to Platts, exemptions are looking increasingly unlikely.

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Even so, some European steelmakers are still planning on shipping to the U.S., even with the tariffs eating into their margins.