Articles in Category: Company News

ronniechua/Adobe Stock

This morning in metals news, the Mexican ambassador to the U.S. told news agency McClatchy he expects the U.S. to lift its steel and aluminum tariffs, world aluminum production jumped in October, and Norilsk Nickel says it is willing to work with London-listed Kaz Minerals on a copper project in Russia.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Goodbye, Tariffs?

In an interview with McClatchy, the Mexican ambassador to the U.S., Geronimo Gutierrez, said Mexico expects the U.S. will lift its tariffs on steel and aluminum vis-a-vis Mexico after the signing of the United States-Mexico-Canada Agreement (USMCA).

The USMCA is slated to supersede the North American Free Trade Agreement (NAFTA). The U.S. first reached a deal with Mexico, with Canada coming on afterward. However, despite the deal reached at the end of September, the U.S. tariffs on steel and aluminum remained in effect with respect to imports from Canada and Mexico, which has remained a primary sticking point for the two countries in the weeks following the USMCA announcement.

The two countries initially won temporary exemptions from the Section 232 tariffs this spring, but the exemptions were allowed to expire as of June 1.

MetalMiner’s Take: One of the most frequently asked questions from MetalMiner readers involves how long the Trump administration would maintain the Section 232 tariffs.

Throughout much of the year, MetalMiner has said the tariffs will remain in place for the mid-term (6-9 months). USMCA will likely result in some modifications on 232, either through exemptions or quotas. Despite a potential 232 adjustment for USMCA, MetalMiner believes the tariffs will remain intact.

Aluminum Production Rises

Global aluminum production in October jumped 4% year over year, according to International Aluminum Institute data released today.

October production reached 5.4 million net tons, up from 5.2 million net tons in October 2017.

Norilsk Nickel Indicates it Could Work With Kaz Minerals

As reported by the Financial Times, palladium and nickel giant Norilsk Nickel has said it is willing to partner with Kaz Minerals on the latter’s Baimskaya copper project in Russia’s Chukotka region.

For more efficient carbon steel buying strategies, take a free trial of MetalMiner’s Monthly Outlook!

The London-listed Kaz Minerals purchased the Baimskaya project in August for $900 million in cash and shares.

According to a Kaz release at the time, the Baimskaya project is “one of the world’s most significant undeveloped copper assets with the potential to become a large scale, low cost, open pit copper mine.”

Pavel Ignatov/Adobe Stock

This morning in metals news, Tokyo Steel plans to raise plate prices, Rio Tinto says new aluminum capacity is needed outside of China and copper prices tick upward.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Plate Prices Rise

Tokyo Steel plans to raise heavy plate prices by 2.5% in December, according to a Reuters report. The steelmaker had not raised heavy plate prices since January, the report noted.

MetalMiner’s Take: Plate prices have always had their own price dynamics separate from the other forms of flat rolled steel (such as HRC and CRC).

Plate prices in the U.S. have remained fairly well-supported compared to the other forms of steel, so it should come as no surprise that in markets with strong construction demand, like Japan, mills would announce price increases.

Interestingly, Chinese plate prices have started to slip, but those dynamics could change based on environmental curbs, whether the Japanese plate price increases stick and Chinese demand.

U.S. metal-buying organizations will want to pay close attention to these price dynamics in Japan and China.

Aluminum Capacity

Rio Tinto Group says the world needs new aluminum capacity outside of China in the coming years, Bloomberg reported.

Copper Price Rises

Prices of LME and SHFE copper increased Monday, Reuters reported, on the heels of positive sentiment stemming from comments made by President Donald Trump regarding tariffs on China.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

During a press briefing Monday, Trump said the U.S. might not need to impose further tariffs on China, the world’s top copper consumer.

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? Request your two-month free trial of MetalMiner’s Outlook

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

Charles/Adobe Stock

This morning in metals news, Chilean state copper agency Cochilco again trimmed its average copper price prediction for the year, China’s state-owned aluminum producer Chinalco is looking abroad and oil prices are up for the second straight day.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Copper Price Prediction Falls

Chile’s state copper agency, Cochilco, lowered its average copper price prediction for the year, Reuters reported.

According to the report, it downgraded its prediction by $0.03 to $2.97/pound.

Chinalco Looks Abroad

Amid challenges at home, the state-run aluminum major Chinalco is looking elsewhere to buttress its business.

According to a Bloomberg report, the global aluminum market is set to swing from a deficit to a surplus in 2019, which will put pressure on the aluminum producer (in tandem with rising prices of raw materials).

Bloomberg cites Chinalco’s deputy general, Ao Hong, who said the firm is looking into an Indonesian alumina project.

Oil Prices Rise Again

The oil price made gains for the second straight day Thursday, Reuters reported.

After exceeding the $80/bbl mark in September — its highest level since 2014 — the price has come off in the last six weeks.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

According to the report, OPEC is considering a cut of up to 1.4 million barrels per day next year to head off a further plunge in the price.

Alexander Chudaev/Adobe Stock

A financing deal was recently struck between steel tycoon Sanjeev Gupta’s GFG Alliance with international banks for the purchase of Rio Tinto’s Dunkerque aluminum smelter in France, one of Europe’s largest smelters. The Liberty House Group is a part of the GFG Alliance.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

The term loan secured on standard financial terms provides five-year committed funds, Liberty said in a press release. Analysts say the development clears the way for the deal to be formally completed before the end of November.

Gupta, the executive chairman of the GFG Alliance, was quoted as saying, “This transaction allows us to press ahead with our plans to develop Dunkerque, to expand production and create added-value downstream operations. This agreement underlines the support of the banking community for GFG’s vision for economic and environmental sustainability.”

The agreement comes after a series of talks which also involved getting the French government’s approval, plus garnering long-term power price contracts.

According to GFG Alliance, there will now be more investments in the property after the plant is eventually acquired. Previously, Liberty House acquired an aluminum wheels facility in Chateauroux. With these purchases the firm will position itself as a major integrated manufacturing business, producing metals and components for the automotive and other growing industries in France.

The Dunkerque smelter boasts an annual capacity of 270,000 tons. The smelter was commissioned in 1991 and later purchased by Alcan, which was then purchased by Rio Tinto about a decade ago.

Liberty is part of the GFG Alliance, a global group of energy, mining, metals, engineering, logistics and financial services businesses, headquartered in London. GFG has additional hubs in Dubai, Hong Kong, Singapore, Sydney, Paris and New York, and a presence in around 30 countries worldwide. The GFG Alliance has a turnover exceeding U.S. $15 billion, and features integrated industrials and metals businesses under the Liberty banner.

For more efficient carbon steel buying strategies, take a free trial of MetalMiner’s Monthly Outlook!

Recently, Liberty Steel announced an agreement to deal with ArcelorMittal to acquire three European steel plants, signaling another major expansion by the British-owned Liberty Steel.

Zerophoto/Adobe Stock

This morning in metals news, China’s October steel output hit a record high, workers and management at U.S. Steel have reached an agreement on a four-year labor deal and the Aluminum Association in a letter criticized the Department of Commerce’s tariff exclusion process.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Steel Output Jumps Ahead of Cuts

According to a Reuters report, steel output in China surged in October before winter cuts take hold.

China’s steel output hit 82.55 million tons in October, according to the report, up from 72.36 million tons in October 2017.

MetalMiner’s Take: China’s record production output and low capacity utilization rates will continue to put price pressure on global steel markets. Historically, the winter production curbs really don’t dent the glut of excess steel produced by China. MetalMiner pays careful attention to Chinese steel prices, which have largely weakened.

Excess capacity and sluggish demand suggest a weaker global steel price environment. Buying organizations will want to pay careful attention to actual emissions cuts to see if Chinese prices will rise.

Steelworkers OK Four-Year Contract at U.S. Steel

Steelworkers at U.S. Steel have agreed on a four-year labor deal, the Pittsburgh Post-Gazette reported.

According to the report, the contract covers 16,000 workers and includes a 14% wage increase over the four years.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

Aluminum Association Says Exclusion Process ‘Undermines’ Domestic Industry

The Aluminum Association penned a letter this week in which it criticizes the now much-maligned tariff exclusion process, saying it “undermines” the domestic aluminum industry.

The letter — addressed to Hillary Hess, director of the Bureau of Industry and Security’s Regulatory Policy Division — says the “inherent uncertainty of the product exclusion process is actually adding an unnecessarily prolonged cost burden to our members and their customers and chilling investment in the aluminum industry, rather than promoting domestic production.”

“The status quo is therefore undermining the intent and the underlying national security rationale of the Section 232 remedy,” it continues.

khunkorn/Adobe Stock

Tata Steel on Tuesday released its financial results for the quarter ending Sept. 30.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Tata Steel reported profit after tax (PAT) of 31.16 billion rupees (USD $430.8 million) in the quarter, more than triple that of Q2 2017, when it hit 10.18 billion rupees (USD $140.7 million).

“Tata Steel Group has delivered extremely strong results this quarter driven by robust operational performance and favorable business conditions in India,” CEO and Managing Director T.V. Narendran said in a release. “This quarter, despite a seasonally weaker period, we sold 4.32 million tons across Tata Steel Standalone and Bhushan Steel. This demonstrates our strong customer relationships and the strength of our marketing franchise.

“We continue to work on our strategy of increasing our Indian footprint as we ramp up operations at Bhushan Steel and implement our 5 mtpa expansion at Tata Steel Kalinganagar.”

In May, Tata announced the acquisition of a 72.65% stake in Bhushan Steel via India’s Corporate Insolvency Resolution Process. According to the quarterly earnings report, Bhushan’s deliveries jumped 34% quarter over quarter, up to 1.14 million tons, with Tata citing “improved marketing strategy” in reduction of inventory.

“The integration of Bhushan Steel is progressing well; our focus is on improving maintenance and safety practices at the plants which will improve plant reliability and help ramp up volumes,” the earnings release states.

Earlier this week, MetalMiner’s Sohrab Darabshaw reported on Tata’s efforts toward unifying its brand amid its acquisitions, which this year also included Usha Martin, a producer of steel wire rope based in Kolkata.

“Tata Steel signed definitive agreement to acquire Usha Martin Limited’s steel business comprising 1 MTPA long products manufacturing capacity, an operating iron-ore mine, an underdevelopment thermal coal mine and captive power plants,” Tata’s earnings release states. “This acquisition provides a rich basket of long products comprising wire rods, specialty bars, and blooms. Tata Sponge Iron Limited, a subsidiary of Tata Steel, is carrying out this acquisition.”

In other developments, Tata’s planned joint venture in Europe with German firm Thyssenkrupp is under review by Europe’s competition authorities, as MetalMiner’s Lisa Reisman noted Monday.

In a release, the European Commission stated it is analyzing concerns that the merger “may reduce competition in the supply of various high-end steels.” The release makes specific mention of automotive steel, metallic coated steel for packaging and grain-oriented electrical steel.

“Steel is a crucial input for many of the goods we use in our everyday life, and competitive steel prices are vital for the European economy,” Commissioner Margrethe Vestager said in the prepared statement. “Industries dependent on steel employ over 30 million people in Europe and we must be able to compete in global markets. This is why we will carefully investigate the impact of the planned combination of Tata Steel’s and ThyssenKrupp’s steel businesses on effective competition in the steel markets.”

The European Commission has until March 19, 2019, to make a decision with respect to competition concerns stemming from the merger.

For more efficient carbon steel buying strategies, take a free trial of MetalMiner’s Monthly Outlook!

The merged European operation would become the second-largest steelmaking entity in Europe, behind only ArcelorMittal.

Amid rising trade tensions this year, automotive sales in China have been trending downward, a point emphasized by Ford Motor Co.’s recently released China sales figures for October.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

The Detroit automaker on Tuesday released its October sales numbers for the Chinese market, showing total sales of 58,204 units. The October sales total marked a 45% year-over-year decline.

The October marked marked the second-straight month of sales dropping in excess of 40% year over year (sales fell 43% year over year in September). August sales dropped 36% year over year.

“As part of our 2025 Plan, Ford is rolling out its first wave of our exciting new vehicles, designed especially to meet the needs of Chinese customers,” said Anning Chen, president and CEO of Ford Greater China, in a release. “The all-new Ford Focus and new Escort hit showrooms this month and the all-new Territory will follow soon. We believe our future product line-up will help us to regain our sales momentum in this important market and serve as a testament to our commitment to China.”

The down October sales total continued what has been a down year in the Chinese market.

In the year to date, the automaker has sold 642,593 units, marking a 31% decline from the January-October 2017 period.

Broken down further, the Changan Ford Automobile brand — a 50:50 joint venture between Ford and Changan Automobile — saw its October sales fall 58% year over year and drop 43% in the year to date. Jiangling Motors Co. saw its October sales fall 17% year over year and 8% in the year to date.

Meanwhile, the Lincoln brand, while down in October, has come in on the positive side of the ledger for Ford this year.

Lincoln sales were down 6% year over year in October, but are up 3% in the year to date. Earlier this year, Reuters reported Ford’s Lincoln brand plans to build as many as five new vehicles in China by 2022.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

Last month, Reuters reported automotive sales in China fell in September by the greatest amount in nearly seven years. September sales in China fell 11.6% year over year, according to the report.

Alexander Chudaev/Adobe Stock

This morning in metals news, Novelis Inc. announced a $175 million investment in its aluminum recycling and production capabilities in aluminum, Chinese steel prices fell, and U.S. CRC and HDG prices dropped to start the week.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Novelis Announces $175M Investment

Aluminum roller and recycler Novelis announced it is investing $150 million in its Brazilian aluminum rolling and recycling operations.

The investment will seek to expand its Pindamonhangaba facility.

“This investment in additional rolling and recycling capacity further strengthens our commitment to the South American region and better positions us to meet our customers’ needs,” President and CEO Steve Fisher said in a release. “Our focus on establishing another reliable water source also helps us further deliver on our purpose of shaping a sustainable world together.”

Chinese Steel Prices Drop

Prices of Chinese steel fell to multimonth lows, Reuters reported, as a result of concerns regarding demand in the country.

Rebar hit a 3 1/2-month low Monday but gained 0.3% Tuesday, according to the report.

MetalMiner’s Take: SHFE Chinese rebar prices this week fell back to April levels, when prices started to increase.

The pullback in prices is not only driven by a slower Chinese economy, but also by a slower demand. Chinese steel prices also started to decrease at this point of the year last year. Readers may want to study last year’s price levels and formulate a strategy based on them.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

U.S. HDG, CRC Prices Fall

Prices of U.S. cold-rolled coil and hot-dipped galvanized steel sheet have continued to drop this week, S&P Global Platts reported.

The much-publicized joint venture between Tata Steel and Thyssenkrupp will now go under the magnifying glass of the European Commission due to “preliminary competition concerns” around steel for automotive applications, metallic coated steel for packaging and grain-oriented electrical steel (GOES).

According to a press release from the European Commission, the commission has concerns about reduced choice of suppliers and higher prices impacting buying organizations.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

The commission has until March 19, 2019 to make a decision on the planned venture.

The concerns remain valid, as GOES remains a highly concentrated supply market (as well as buying market). Any reduction in the number of European players will add pricing power to producers.

ABB, AK Steel Battle on Exclusion Request

Tracking the exemption requests from Section 232 steel tariffs remains a challenge.

MetalMiner missed the fact that ABB had initially received an exclusion from the Department of Commerce for GOES this summer. That exclusion request was granted and then denied once AK Steel filed an objection.

As we reported last month, ABB challenged AK’s objection. In a series of rebuttals, AK recently filed another comment challenging ABB’s arguments that AK material does not meet its performance and quality requirements around “white edge,” that AK’s material is, “more prone to creating holes than the process employed by Nippon.”

AK took issue with these assertions by filing a comment challenging the fact that no country standard or other customer has a requirement or references “white edge” and that, therefore, the argument appears arbitrary.

However, ABB will likely respond with the regulatory threshold argument required for making exclusion requests: “Specifically, ABB used the BIS standard for exclusion requests regarding product substitution, “a ‘substitute product’ must meet “quality (e.g., … internal company quality controls or standards) … or testing standards, in order for the U.S. produced steel to be used in that business activity in the United States by that end user” (83 Fed. Reg.46026, 46058).

In addition, as MetalMiner reported previously, ABB argued that the actual data from 2016-2018 certified test reports using ASTM A804 test standards did not meet iron loss and core loss requirements.

The parties have until Nov. 12 to submit additional comments.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

Exact GOES Coil Price This Month

The U.S. grain-oriented electrical steel (GOES) M3 coil price held relatively flat moving from $2,421/mt to $2,434/mt.

The GOES Monthly Metals Index (MMI) moved one point from 175 to 176. MetalMiner received additional data after last month’s publication that lowered the GOES M3 MMI from 182 to 175.

The GOES MMI® collects and weights 1 global grain-oriented electrical steel price point to provide a unique view into price trends over a 30-day period. For more information on the GOES MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.