Articles in Category: Anti-Dumping

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This morning in metals news, the E.U. opened a new steel investigation, turnover at Russian aluminum giant Rusal and Novelis announces a major investment.

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E.U. Investigates Chinese Steel

According to Reuters, the E.U. has launched a new investigation of Chinese hot-rolled steel sheet piles coming into Europe.

The E.U. already has 17 anti-dumping or anti-subsidy measures in place on various forms of steel, according to the report.

Rusal CEO, Directors Quit

The Russian aluminum firm, recently in the news for being one of the Russian companies hit with U.S. sanctions, announced Thursday that its CEO and seven of its directors have stepped down, according to a CNN report.

According to the report, Rusal’s stock was up 7% after the announcement, but is still down significantly from its level before the U.S. sanctions were announced.

Novelis Plans New Investment in China

American aluminum firm Novelis announced it plans to invest $180 million to augment its Chinese automotive body sheet capacity, Reuters reported.

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Per the report, the investment would lead to an additional 100,000 tons of capacity at the firm’s Changzhou plant.

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(Editor’s Note: This is the first of two posts addressing the global trading system. Check back tomorrow for Part 2.)

The Economist asked the question in a debate that has been running over the last few weeks, stimulated in part by President Trump’s unprecedented actions on tariffs and quotas aimed at perceived cheaters of the global trading system.

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The article summarizing the debaters’ arguments (with contributions by guest contributors) makes fascinating and very appropriate contemporary reading for anyone interested in the topic. Few would argue that in its earliest guise the multilateral, rules-based system managed by the World Trade Organization (WTO), to lift the article’s words, has built up and delivered unprecedented prosperity across the world.

But even ardent supporters would also concede it has contributed to the decimation of the industrial base in many rich countries. Other factors have played a role, like automation and environmental policies, but the global trading system has played its part in this transfer for manufacturing capability and accompanying jobs.

The article questions whether the global trading system is broken, whether we should do away with it altogether, and whether a return to national tariffs and bilateral trade agreements is the solution to the perceived problems it has caused.

But the reality is that while the WTO and its rules-based system has significant faults, it is not bust in the way the world order of the 1930s, which was complete chaos and, as one of the arguments points out, fraught with government-imposed tariffs, quantitative limits on trade, discriminatory deals and foreign-exchange controls. It got so bad at times that some international commercial relationships even devolved into barter. This writer can remember his firm dealing with the Soviets in the 1980s, bartering ship loads of hot rolled coil steel from Russia and shipping back cold rolled steel coil from British Steel in the U.K.

But if the system is not busted it is certainly flawed, and those flaws have resulted in multiple problems.

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Before we head into the weekend, let’s take a look back at the week that was.

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But first, if you plan on partaking in Cinco de Mayo celebrations tomorrow, you might want to check out our post from 2016 about stainless steel and … tequila.

“Why is stainless steel in tequila production? Of course, stainless vats are a sanitary choice; however, stainless does not impart any additional flavors into the mixture of blue agave juice and the distinctive water called the mosto,” MetalMiner’s Katie Benchina Olsen wrote in the 2016 post.

Check out the entire post for more about the link between stainless steel and tequila.

Now, to recap the week:

  • MetalMiner’s Stuart Burns touched on nickel fundamentals on Monday.
  • The United States Trade Representative’s office released its annual Special Section 301 report, in which countries are identified for special monitoring with respect to IP enforcement. Unsurprisingly, China made the Priority Watch List.
  • Remember Brexit? Well, that hasn’t gone away — in two parts, Burns offers an update on Britain’s Brexit effort and all it entails. (Part 1, Part 2.)
  • In the ongoing Section 232 saga, the U.S. announced earlier this week that the temporary tariffs exemptions for the E.U., Canada and Mexico, which were set to expire May 1, would be extended 30 days.
  • Kicking off our Monthly Metals Index (MMI) series for the month, we looked at the automotive market, which saw sales slump in April.
  • U.S. construction spending in March dropped from the previous month.
  • MetalMiner’s Katie Benchina Olsen delves into the case for a Section 232 exemption for the joint venture between ATI Metals and Tsingshan Stainless.
  • Demand for gold in Q1 this year was at its lowest since 2008, MetalMiner’s Taras Berezowksy noted.
  • So-called “floating solar plants” are gaining momentum in India as the country increasingly looks to grow its supply of renewable energy sources.

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Following intense lobbying by French President Emmanuel Macron and German Chancellor Angela Merkel — plus, it must be said, the whole European steel industry and many consumers in the U.S. — U.S. President Donald Trump has announced a delay in the imposition of steel and aluminium tariffs on Canada, Mexico and, crucially, the European Union until June 1.

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The temporary exemptions from tariffs on these countries were set to expire today. At the same time, agreements for permanent exemptions for Argentina, Australia and Brazil have been made.

According to The Telegraph, the U.S. granted temporary relief to European producers from 25% tariffs on steel and 10% levies on aluminium only up to May 1but has now extended by a further 30 days while it tries to ring concessions out of its partners in NAFTA and with the E.U.

Specifically, the article suggests automobiles are high on the list of things on which Trump wants to see movement. The E.U. charges 10% import duty on U.S. cars but currently incurs only 2.5% on the import of E.U.-made cars into the U.S.

Tariffs would hit steelmakers this side of the Atlantic hard, the article states, with the industry only just recovering from the 2015 crisis, which cost tens of thousands of jobs. Closure of the U.S. market creates the potential for a “double whammy” to the European industry. Not only is America a major market for Germany, the U.K. and Italy, but Chinese producers are likely to flood Europe with excess output, which was a major cause of the crisis of three years ago.

China remains broadly the U.S. main target, but the steel and aluminium tariffs are part of a wider bid to renegotiate the terms of trade with a number of countries, from close to home with NAFTA to far-flung producers on the other side of the globe.

The president seems to have a bone to pick with most of them. The threat of sanctions is a blunt but effective tool to bring countries to the negotiating table. As a tactic, it does seem to have some merit.

No breakthroughs have been made, but many discussions are now ongoing that were being avoided a year ago. China’s steel imports have dwindled markedly into the U.S. over recent years, but aluminum remains significant. The threat of such has already drawn the ire of Beijing, but also the willingness to make conciliatory gestures, such as freeing up the domestic market for foreign investments.

But on two key trade demands, The New York Times reports Beijing is not willing to give ground.

Firstly, the president’s headline-grabbing $100 billion cut in the U.S.’s trade deficit with China and probably even more sensitive is a curb on a $300 billion Chinese plan to invest in advanced tech like A.I. and electric cars. China will almost certainly sweat it out if the president sticks to demands to row back on what China sees as its strategic future.

The row with Europe is far from settled. The postponement has only bought 30 days, so the pressure is on to find a solution.

Europe has more to lose than the U.S., so you have to think some form of settlement will be found that will, to some extent, meet the president’s objectives.

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If not, the pain Europe’s steel industry has gone through in the last 10 years will be nothing compared to what is to come.

As my colleague Sydney Lazarus reported yesterday, even though the European Union has a temporary exemption from the U.S.’s Section 232 tariffs on steel and aluminum, it is demanding compensation at the World Trade Organization as shown in a filing by that trade body two days ago, according to Reuters.

The EU is arguing that the U.S. tariffs were imposed only to protect U.S. industry, rather than for security measures.

MetalMiner Executive Editor Lisa Reisman took readers through how the U.S. Department of Commerce did its homework on the Section 232 steel investigation, in a top-read post originally published Feb. 23, 2018. Read the full text of Lisa’s article below.

By now most MetalMiner steel producers and steel buying organizations have pored over the Section 232 steel report published by the Department of Commerce. In case you missed it, here is a link to the full report.

At its core, the Section 232 investigations represent the only public policy solution put forward by any major government to address the fundamental crisis involving extensive and pervasive global overcapacity for steel, stainless steel and aluminum.

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This overcapacity, the Department of Commerce believes, threatens U.S. national security interests because unfairly traded imports have caused substantial financial harm to U.S. producers.

Before you scream “protectionism!”, read on.

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The U.S. Department of Commerce on Tuesday announced it had issued a final affirmative determination in its anti-dumping investigation of imports of cold-drawn mechanical tubing from China, Germany, India, Italy, Korea and Switzerland.

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“Today’s decision allows U.S. producers of cold-drawn mechanical tubing to receive relief from the market-distorting effects of foreign producers dumping into the domestic market,” Secretary of Commerce Wilbur Ross said in a prepared statement. “We will continue to take action on behalf of U.S. industry to defend American businesses, workers, and communities adversely impacted by unfair imports.”

The DOC determined the following dumping margins (value of 2016 imports of the product from each country is included in parentheses):

  • China: 44.92 to 186.89% ($29.4 million)
  • Germany: 3.11 to 209.06% ($38.8 million)
  • India: 8.26 to 33.80% ($25.0 million)
  • Italy: 47.87 to 68.95% ($11.9 million)
  • Korea: 30.67 to 48.00% ($21.3 million)
  • Switzerland: 12.05 to 30.48% ($26.2 million)

The domestic petitioners in the case were: ArcelorMittal Tubular Products (Shelby, Ohio), Michigan Seamless Tube, LLC (South Lyon, Michigan), PTC Alliance Corp. (Wexford, Pennsylvania), Webco Industries, Inc. (Sand Springs, Oklahoma), and Zekelman Industries, Inc. (Farrell, Pennsylvania).

The case now moves to the U.S. International Trade Commission, which will rule on or before May 24. If the commission rules in the affirmative, anti-dumping orders will be issued.

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A full list of foreign respondents in the case is included below.

Source: U.S. Department of Commerce

We could love reading these murky tales about Russian businessmen and their dealings if the reality was not that some of them at least are rather too close to the truth and rather too close to home, (many of them living, as they do, at least part of their time in Western capitals).

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Donald Trump’s latest round of sanctions against Russian oligarchs has again thrown a spotlight on those closest to the throne in Moscow. With so much disinformation around, it is impossible to sift fact from fiction.

Caught up in the latest list identified for sanctions is Oleg Derispaska, boss and major shareholder in Basic Element, owner of Rusal (among other power and metals businesses).

In and of itself, that may not be tectonic for the metals markets, were it not for the cloud it casts over the trade and consumption of Rusal’s aluminum when its boss is on a sanctions list.

Derispaska has stepped back from Rusal recently, a move that predated the sanctions but now looks timely as the firm seeks to keeps its brand acceptable to banks and foreign authorities.

First indications are encouraging for the firm.

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

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This morning in metals news, the E.U. is looking to make its exemption from the U.S.’s Section 232 steel and aluminum tariffs permanent, reports indicate Tata Steel’s bid for Bhushan Steel could be as much as $5.3 billion, and China announced plans to impose tariffs on a number of U.S. goods in response to President Trump’s move Thursday, one that potentially opened the door to $60 billion in tariffs on Chinese goods.

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After Winning Temporary Relief, E.U. Looks to Make Tariff Exemption Permanent

U.S. Trade Representative (USTR) Robert Lighthizer announced Thursday that President Trump granted temporary exemptions from the Section 232 steel and aluminum tariffs for a number of countries, plus the E.U.

Naturally, the E.U. wants to make the exemption permanent.

The exemption runs until May 1. According to a Financial Times report, E.U. leaders Friday said they would be ready to retaliate if necessary, calling the tariffs an “inappropriate remedy” to global overcapacity.

Tata’s Steel’s Big Bid

According to Bloomberg, Tata Steel has put in a bid of $5.3 billion for the bankrupt Bhushan Steel.

If the deal is completed by March 2019, according to the report, it would make Tata India’s biggest steelmaker.

China Announces Intention to Retaliate on Trade

Following President Trump’s announcement Thursday regarding the USTR’s Section 301 probe and the possibility of as much as $60 billion in tariffs on Chinese goods, China responded in kind.

According to a release on the Chinese Ministry of Commerce website, it has a list of 128 products targeted for tariffs amounting to $3 billion. The list of products includes stainless steel pipes and recycled aluminum, in addition to pork, fresh fruit, dried fruit and nut products, wine, modified ethanol, and more.

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“The United States’ practice of restricting the import of products based on ‘national security’ has severely damaged the multilateral trade system represented by the WTO and seriously interfered with the normal international trade order,” the Ministry of Commerce said. “It has been opposed by many WTO members. The Chinese side also negotiated with the United States through multiple levels and channels, and will take legal actions under the WTO framework to jointly maintain the stability and authority of the multilateral trade rules with other WTO members.”

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This morning in metals news, the U.S. Department of Commerce issues a final affirmative determination in its anti-dumping and countervailing subsidy investigation of carbon and alloy steel wire rod from five countries, LME copper pushes away from a three-month low and the E.U. is hopeful it can win at least temporary exemptions from the U.S. steel and aluminum tariffs.

DOC Makes Final Determination on Wire Rod from Italy, Korea, Spain, Turkey and the U.K.

Earlier this week, the Department of Commerce announced it had made a final affirmative determination in its anti-dumping and countervailing duty case involving carbon and alloy steel wire rod from Italy, Korea, Spain, Turkey and the U.K.

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According to the department’s announcement: “The Commerce Department determined that exporters from Italy, Korea, Spain, Turkey, and the United Kingdom are dumping carbon and alloy steel wire rod in the United States at 12.41– 18.89 percent, 41.10 percent, 11.08 – 32.64 percent, 4.74 – 7.94 percent, and 147.63 percent less than fair value, respectively. Commerce also determined that Italy and Turkey are providing countervailable subsidies to its producers of carbon and alloy steel wire rod at rates ranging from 4.16 – 44.18 percent and 3.81 – 3.86 percent, respectively.”

Copper Bounces Back Up

The price of copper picked up after hitting a three-month low on account of good news regarding expectations of slower rate rises by the Federal Reserve this year, Reuters reported.

LME copper was trading at $6,838 per ton as of 0230 GMT, according to the report.

E.U. Holding Out Hope for Tariffs Exemptions

The recently proclaimed U.S. tariffs on steel and aluminum tariffs are set to go into effect tomorrow, and the E.U. is still hoping to gain exemptions.

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According to a Financial Times report, E.U. Trade Commissioner Cecilia Malmstrom said there were positive signs that the E.U. might in fact gain an at least temporary exemption from the tariffs.