Articles in Category: Anti-Dumping

The markets appear strangely relaxed about the growing economic and political standoff between the U.S. and China.

Maybe because it has been a slow burn over the last six months or maybe because no one quite believes either side would be stupid enough to allow a full-blown trade war to develop, but markets are generally quite sanguine … so far.

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Yes, the Chinese stock market is down. In addition, commodity prices are depressed relative to where we would have expected them to be back in Q1, when global growth was strong and there appeared little to deflect both mature and emerging markets from enjoying another couple of years of robust growth.

Gideon Rackman, writing in the Financial Times, argues that we are being far too relaxed about this, that for a number of reasons the prospect of these initial $50 billion of tariffs escalating to $200 billion — or worse — is real and the consequences should worry us.

For a number of reasons, neither side is likely to back down.

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Just last year, the U.S. Department of Commerce kicked off an investigation of imports of aluminum foil from China; in February, it issued a final affirmative determination in its anti-dumping and countervailing duty cases.

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Last week, Mexico announced it was going in a similar direction.

The Mexican government launched an anti-dumping investigation of imports of aluminum foil from China. Mexican firm Almexa Aluminio was the petitioner in the case, according to the government release.

The products referred to in the company’s petition are “aluminum foil coils for domestic and/or industrial use with a thickness equal to or less than 0.080 millimeters (mm), without support, simply laminated, with an external diameter equal to or greater than 100 mm and weighing more than 5 kg,” according to the release.

The Aluminum Association, a U.S. industry group, expressed support for the Mexican government’s decision.

“The Aluminum Association is pleased by the Government of Mexico’s decision to launch an antidumping investigation on imports of certain Chinese aluminum foil,” said Heidi Brock, president and CEO of the Aluminum Association. “The North American aluminum market is highly integrated, and it is vital the region work together to combat unfair trade practices and enforce rules-based trade. The U.S. aluminum industry has already seen real results from targeted and durable trade enforcement actions, and we are glad to see trading partners like Mexico demonstrate their commitment to rigorous and timely enforcement of global trade rules.”

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Per the Mexican government release, “non-market economy conditions prevail in China” for some several reasons, including:

  • the artificial reduction of prices
  • the role of “industrial associations as tools of the state”
  • and the “control and state direction of foreign direct investment abroad and the direction and control of the State in the entry of investment and property”

gui yong nian/Adobe Stock

This morning in metals news, some steel stocks fell on the heels of President Trump’s proclamation on targeted tariff relief for quota countries, China looks to speak with its domestic aluminum foil makers as Mexico recently launched an anti-dumping probe and European Commission President Jean-Claude Juncker responds on the subject of automotive tariffs.

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Tough Thursday

U.S. steel stocks struggled yesterday on the heels of Trump’s proclamation affording “targeted relief” to three countries currently with steel quotas.

Companies in South Korea, Argentina and Brazil can apply for steel tariff exclusion requests, per the proclamation.

According to Markets Insider, U.S. Steel dropped 6%, AK Steel fell 4% and Steel Dynamics dropped 2%.

Beijing to Meet with Foil Makers

On the heels of Mexico’s announcement that it had launched an anti-dumping probe of aluminum foil imports from China, the Chinese government plans to meet with foil producers early next week, according to Reuters.

Back and Forth

The U.S. and E.U. remain at odds over automotive tariffs; the disparity in automotive tariff rates is a subject Trump has harped upon on numerous occasions.

Per a CNBC report, European Commission President Jean-Claude Juncker said the 28-member bloc would increase its automotive tariffs if Trump reneges on a previous reached agreement to not increase auto tariffs.

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MetalMiner’s Take: Not for the first time there appears to be contrarian positions, even within the European Commission.

Hours after European Trade Commissioner Cecilia Malmstrom offered to cut auto tariffs to zero if the US would do the same (see our post earlier this morning), cantankerous European Commission President Jean-Claude Juncker was issuing threats to reciprocate with higher auto tariffs if the U.S. went ahead with threats made last month to raise tariffs on E.U. cars coming into the U.S.

In practice, neither side should panic; the threat of tariffs on E.U. cars is a powerful bargaining tool the U.S. appears willing to use. But in reality a zero or tariff-free deal would be a major achievement for President Trump and could lay the groundwork for similar bilateral deals with Europe for other industries.

Turkey may not be a big cheese in many ways, but its currency has taken a hammering following President Donald Trump’s threats of doubling tariffs and dire sanctions against a select few individuals close to authoritarian President Recep Tayyip Erdoğan.

But apart from the impact on one or two other emerging-market currencies, like South Africa’s, the rest of the world has barely noticed.

In one industry, however, Turkey is a sizable player: steel.

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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 metals-related storylines here on MetalMiner:

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The U.S. Department of Commerce. qingwa/Adobe Stock

The U.S. Department of Commerce (DOC) announced this week that it had made a final affirmative determination in its anti-dumping and countervailing duty investigations of steel flanges imported from India.

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Stainless steel flanges from India were sold in the U.S. at less than fair value, ranging from 19.16% to 145.25%, according to the DOC. In addition, the DOC determined India has providing countervailable subsidies to its producers of stainless steel flanges, at rates ranging from 4.92% to 256.16%.

Imports of stainless steel flanges from India were valued at $44 million in 2017, according to the DOC. In 2015, the U.S. imported 10,584 metric tons of the product from India, coming in at a value of just over $54.8 million. That dropped to 8,031 metric tons in 2016 ($32.1 million) before moving back up to 10,975 metric tons last year.

The petitioners in the case were the Coalition of American Flange Producers and its two members: Core Pipe Products, Inc. (of Carol Stream, Illinois) and Maass Flange Corporation (of Houston, Texas).

The case now moves to the U.S. International Trade Commission, which is expected to make a final determination by Sept. 24. If it also rules in the affirmative, the DOC will issue anti-dumping and countervailing duty orders.

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The ruling marks a continuation of the Trump administration’s aggressive stance on trade. According to the DOC release, the Trump administration to date has launched 120 new anti-dumping or countervailing duty investigation, marking a 216% increase in such cases compared with the same time period during the Obama administration.

Stock markets in the West react to peaks and troughs on the Shanghai stock market as if the market were a true indicator of the health of the Chinese economy. Shanghai has been down since talk of sanctions has spooked markets in China, Europe and the U.S.

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But in some parts of the world, where dependence on China is more than a simple +/- 0.1% of GDP, whole economies are reacting to the fear of a slowdown in China.

A recent Financial Times report details how the Aussie dollar has slumped 4.5% in just two weeks. Trade tensions have risen over investors’ fear for the prospects of the country’s largest trading partner, an indicator of how dependent has Australia become on China’s health and prosperity.

Likewise, copper, which for decades has been dubbed “Dr. Copper” for its supposed sensitivity to the health prospects for global growth, should maybe be renamed “Sino Copper” for the way in which it increasingly has become tied to the fortunes of one country (China) rather than the global economy.

After touching a four-year high of $7,348 a ton on June 7, copper has plunged 14%, or more than $1,000 to $6,303 a ton, the Financial Times reported, as investors fear a slowing China will be detrimental for copper demand later this year and next.

China is the world’s largest importer of copper, and Australia — the fifth-largest copper producer — is intimately tied to the world’s second-largest economy. China is its biggest customer, not just for copper but also for iron ore, coal, aluminum, bauxite and a range of other materials.

A follow-up article will analyze a wider range of metrics to better understand the state of the Chinese economy and to what extent the country’s growth trend for 2018 is a direct result of tariffs (compared to factors in play before April).

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What that will show is that China had much to contend with prior to tariffs and a trade war broke out. While massive foreign exchange reserves and a well-funded banking system means the economy is essentially sound, the current trade issues have come at a bad time for policymakers in Beijing and may partly explain the relatively restrained response from the authorities.

natali_mis/Adobe Stock

This morning in metals news, a Chinese company that makes aluminum foil is suing the U.S. over anti-dumping and countervailing duties imposed on the product, Japan is concerned about a rise in Chinese steel exports and President Trump throws another supporting tweet behind his tariffs.

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Chinese Company Strikes Back at Anti-Dumping, Countervailing Duties

The subsidiary of Chinese company Shantou Wanshun Package Material Stock Co is suing the U.S. over anti-dumping and countervailing subsidy duties imposed on aluminum foil, Reuters reported.

The subsidiary, Jiangsu Zhongji Lamination Materials, was subjected to a countervailing duty of 17.14% and an anti-dumping duty of 37.99% earlier this year, according to the report.

Eyes on Chinese Steel Exports

Japan’s Iron and Steel Federation is keeping tabs on Chinese steel exports levels, particularly as U.S.-China trade relations deteriorate and, thus, could have a significant impact on the Chinese economy and steel demand within China.

“Our biggest worry is a scenario that the U.S.-China trade wars would dent China’s local demand, leading to a surge in China’s steel export,” said Koji Kakigi, the federation’s chairman, as quoted by Reuters.

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Trump Praises Tariff Tool

As the Office of the United States Trade Representative kicked off public hearings on proposed Section 301 tariffs worth $16 billion, President Trump again affirmed his stance on the trade tool, tweeting “Tariffs are the greatest!” on Tuesday morning.

Zerophoto/Adobe Stock

This morning in metals news, China initiated an anti-dumping probe of stainless steel imports worth a total of $1.3 billion, LME copper held above its one-year low Monday and President Trump will visit the Granite City steelworks in Southern Illinois this Thursday.

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China Investigates Stainless Imports

According to Reuters, China has initiated an investigation of stainless steel imports from Indonesia, Japan, Korea and the E.U.

The imports are worth a total of $1.3 billion, according to the report.

LME Copper Staves Off Further Losses, For Now

After hitting a one-year low, LME copper held above that level on Monday, Reuters reported.

London copper traded at $6,154/mt on Monday after falling to $5,988/mt on Thursday.

Trump to Visit Granite City

Announcements of the restarting of blast furnaces at U.S. Steel’s Granite City steelworks in Southern Illinois have represented a victory for the Trump administration, which has embarked on a program of tariffs and other trade remedies (including a 25% tariff on steel imports).

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Now, the president has announced he plans to visit the facility this Thursday.

The U.S. Department of Commerce. qingwa/Adobe Stock

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

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel