Articles in Category: Company News

A federal court in Brazil lifted one of two production embargoes on Norsk Hydro’s Alunorte alumina facility, as the Norwegian firm angles to bring the facility back to full capacity.

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In October, Brazil’s Institute of Environment and Renewable Natural Resources lifted its embargo against the refinery; however, Alunorte cannot return to full capacity until the federal courts lift their embargoes.

Currently, the refinery is operating at 50% capacity.

“I am pleased with the support from local stakeholders and our employees. We are looking forward to be able to resume operations at Alunorte and restart the full alumina value chain, which will be positive for us and the state of Pará,” said John Thuestad, executive vice president of Norsk Hydro’s Bauxite and Alumina business area.

According to the firm, the civil lawsuit related to the refinery was lifted; however, no decision has been made yet related to the bauxite residue disposal area, dubbed DRS2.

“The decision to lift the embargo came after successful trials of Hydro’s press filter technology earlier this month, in which the firm successfully demonstrated its “state of the art” — in Hydro’s words — technology could process bauxite residues to a high enough standard to satisfy SEMA, the local environmental agency in the state of Pará, that the new treatment area DRS2 would be safe,” MetalMiner’s Stuart Burns wrote in October followed the decision from the Institute of Environment and Renewable Natural Resources.

“However, the embargo on DRS2 from the federal court system remains in place; a return to 100% of production capacity cannot be resumed until that court order is lifted.”

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Norsk Hydro noted the Alunorte refinery continues to operate at 50% capacity utilizing the DRS1 system.

“As the federal court’s embargo preventing Alunorte from using its new DRS2 bauxite residue deposit area remains in force, Alunorte continues to utilize the DRS1 depository based on state-of-the-art press filter technology,” Norsk Hydro said. “Alunorte estimates a remaining lifetime of 8-18 months in DRS1, depending on production volume. Further geotechnical studies will be conducted, aiming at verifying an extended lifetime of DRS1.”

After the collapse of its deal in Europe with Thyssenkrupp AG, Tata Steel is reportedly considering several options, including a new partner for a joint venture (JV), according to Bloomberg Quint.

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A report in the Business Standard quoted Tata Steel CEO and Managing Director T.V. Narendran as saying the steel major had a Plan B. The CEO also pointed out that Tata Steel was now a more “structurally sound company.”

In a conference call May 10 after the announcement of the JV not coming through, Narendran reiterated that Tata Steel was exploring a few options, though he did not clarify further. The CEO also forecast that the firm’s U.K. operations should improve upon their performance this year. At the same time, he underlined that the units in Europe need to be cash positive.

Executive Director and CFO Koushik Chatterjee said that volumes in Europe should increase by 5% this year, although the demand outlook in the continent is dim.

Analysts here say the collapse of Tata Steel’s JV with Thyssenkrupp AG had once again turned on the spotlight on Tata’s $13 billion debt. The deal would have transferred some of the debt to the joint venture.

At March-end, the Indian group’s debt stood at $13.15 billion, which is said to be the highest among Indian steelmakers. Of this, about $2.5 billion is from its European operations. Tata was looking at the Thyssenkrupp JV to create a sustainable portfolio in Europe. The management had hoped to bring in a level of stability to the units under the JV, which would have also taken over about 15% of Tata Steel debt.

Since 2016, Tata Steel has been trying to resolve its European business to get it on the right path. It had first purchased Corus Group Plc for about U.S. $13 billion in 2017. Since then, it has been involved in a series of closing and selling of plants in the U.K.

Meanwhile, a report in moneycontrol.com said there was unease at the U.K. units of Tata Steel with unions seeking an assurance that the company’s operations not be split and sold off after the JV fell through.

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Tata Steel’s European operations include units in the U.K. and the Netherlands, employing about 20,000 people. The Netherlands-based unit is said to be among the most profitable ones in Europe. However, the U.K. operations have been constrained under high energy costs in the country and legacy issues.

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This morning in metals news, a senior Mexican official indicated the U.S. and Mexico could be nearing a solution leading toward removal of the U.S.’s Section 232 metals tariffs, British Steel is looking for financial assistance and President Donald Trump referred to the ongoing trade conflict with China as a “little squabble.”

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Is a Deal Close Regarding Metals Tariff Removal for Mexico?

According to Mexican Economy Minister Graciela Marquez, Mexico may be getting closer to negotiating the removal of the U.S.’s tariffs on steel and aluminum, as the U.S., Canada and Mexico aim to push the United States-Mexico-Canada Agreement (USMCA) across the finish line.

“We are, I think, close to negotiating the lifting of the tariffs,” she told Canadian broadcaster CBC, as quoted by Reuters. “We’re having very fruitful conversations on lifting the tariffs not only in the U.S. but also here in Toronto.”

British Steel Looking for Help

A couple of weeks after securing a £100 million loan, British Steel is still looking for financial assistance as it attempts to navigate what it sees as challenges stemming from the Brexit process.

According to the BBC, the steelmaker said “uncertainties around Brexit are posing challenges for all businesses including British Steel.”

A ‘Little Squabble’

Ongoing trade talks and hopes for a deal took a hit last week when Trump more than doubled tariffs on $200 billion in Chinese goods; China retaliated with tariffs on $60 billion in U.S. goods.

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Despite the escalation after a relatively calm period during which optimism was on the ascent, Trump referred to the economic dispute between the two countries as a “little squabble” and that talks have not collapsed.

Stuart Burns earlier today delved into the market impact of the ongoing trade war between the U.S. and China.

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This morning in metals news, Brazilian miner Vale SA has plans to invest approximately $2.5 billion over the next five years in dry iron ore processing, Rusal reported a drop in its first-quarter profits and copper prices bounced back.

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Processing Plans

Miner Vale SA announced it plans to invest approximately $2.5 billion in dry iron ore processing at its operations.

The investment will be made over the next five years. Currently, approximately 60% Vale’s production comes from dry processing; the miner aims to make dry iron ore processing account for 70% of its production.

Dry iron ore processing does not require water, which means there is no need for dams and tailing are not generated. In January, a dam collapse at Vale’s Corrego do Feijao mine in Brumadinho led to hundreds of deaths.

Rusal Profits Slide in Q1

Still feeling the bite of U.S. sanctions that were then in effect, Rusal reported its Q1 profits fell to $300 million from $531 million last year, Reuters reported.

The U.S. sanctions were removed in January; after being applied in April 2018, aluminum prices skyrocketed on fears of Rusal aluminum being taken off the market.

Copper Prices Bounce Back

After dropping to a 15-week low, the copper price picked back up Tuesday (despite the conclusion of U.S.-China trade talks last week without a deal).

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LME copper picked up 0.7% to reach $6,049.50 per ton, according to Reuters.

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This morning in metals news, President Donald Trump has instructed the United States Trade Representative to begin the process of raising tariffs on the remaining approximately $300 billion in Chinese imports, Germany’s Thyssenkrupp is looking for new partners after the planned merger of its European operations with Tata Steel fell apart and China announced retaliatory tariffs against the U.S.

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USTR to Begin Process to Raise Tariffs on All Imports from China

In a move that delivered a shock to the ongoing trade talks between the U.S. and China, President Donald Trump opted to more than double the tariffs on a previously announced set of $200 billion in Chinese goods.

As talks continued last week, Trump set a Friday, May 10 deadline for a deal, threatening to raise the tariff rate on those goods from 10% to 25%. The deadline came and went without an agreement; as such, the tariff rate increased as of 12:01 a.m. ET Friday, May 10.

However, the escalation might not be stopping there.

Trump previously said he was considering imposing tariffs on essentially all remaining imports from China, which the Office of the United States Trade Representative (USTR) confirmed in a statement.

“Earlier today, at the direction of the President, the United States increased the level of tariffs from 10 percent to 25 percent on approximately $200 billion worth of Chinese imports,” the USTR said. “The President also ordered us to begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $300 billion.”

Thyssenkrupp Moves Forward After Tata Merger Collapse

German steelmaker Thyssenkrupp is looking for new partners after its planned 50-50 joint venture with Tata Steel collapsed under scrutiny from European competition authorities, who were concerned the European JV would yield higher prices and fewer choices for consumers.

Thyssenkrupp CEO Guido Kerkhoff told the Handelsblatt business daily’s online edition that the firm is assessing consolidation options, but that he doesn’t foresee the possibility of “bigger mergers” due to the “current position of the European Commission,” Reuters reported.

China Strikes Back

On the heels of the U.S.’s tariff rate increase, China vowed last week to take “necessary countermeasures” in response.

Last year, China imposed a total of $110 billion in tariffs on imports from the U.S. in response to the U.S.’s tariffs.

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This time, China announced the imposition of an additional $60 billion in tariffs on U.S. goods, the BBC reported, including beef, tea, coffee and vegetables, among other items.

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This morning in metals news, the U.S. on Friday raised tariffs on a wide variety of imports from China, a long-considered European joint venture does not appear likely to come to fruition and March steel imports fell 7%.

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Tariff Tensions

As promised earlier this week, the U.S. today raised the tariff rate on a wide variety of Chinese imports from 10% to 25%.

Despite general sentiment in recent weeks indicating the U.S. and China were nearing a deal, President Donald Trump this week said the U.S. would raise the tariff rate on Friday if a deal was not reached.

The deadline came and went with no deal, thus seeing the increase on the duties assessed to the $200 billion in imports from China announced in September 2018.

The Chinese Ministry of Commerce said it would respond to the U.S. tariff increase with “necessary countermeasures.”

Tata-Thyssenkrupp JV Falls Apart

Tata Steel and Thyssenkrupp last year agreed to merge their European operations, forming what would be Europe’s second-largest steelmaker.

However, the proposed joint venture has been under scrutiny from Europe’s competition authorities, which launched an investigation in October 2018 over concerns the merger would result in fewer choices and higher prices for consumers.

Now, over six months later, it appears the joint venture will not come to fruition.

On Friday, Tata Steel said “the feedback from the Commission based on the market test it has undertaken suggests that it is unlikely to clear the proposal in spite of the significant remedies offered.”

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U.S. Steel Imports Fall

U.S. imports of steel totaled 2.27 million tons in March, according to the American Iron and Steel Institute (AISI), marking 6.6% decrease from the February import total. Meanwhile, the U.S imported 8.18 million tons of steel in the first quarter, down 5.9% from Q1 2018.

Steel import market share in March was an estimated 19% and 21% for the first quarter.

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This morning in metals news, President Donald Trump added sanctions on Iran targeting its metals industry, Rio Tinto is shipping more aluminum to Europe and ArcelorMittal reported its Q1 2019 financial results.

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Trump Targets Iran’s Metals Sector

A year on after withdrawing from the 2015 Iran nuclear deal, President Donald Trump took aim at Iran’s largest source of non-oil export revenue: metals.

On Wednesday, the president signed an executive order imposing sanctions on Iran’s metals industry, including exports of iron, steel, aluminum and copper.

Rio Tinto Supplying More Aluminum to Europe

According to Rio Tinto CEO Jean-Sebastien Jacques, the miner has begun to ship greater volumes of aluminum to the European market amid flagging U.S. demand, Reuters reported.

The CEO cited the ongoing U.S.-China trade conflict as a factor contributing to the decline in U.S. demand.

Although negotiations between the U.S. and China continued this week, tensions escalated as President Donald Trump has threatened to increase the rate on a previously announced $200 billion in tariffs from 10% to 25%, setting a Friday deadline for the increase. The tariffs were originally imposed in September, with the tariff rate increase scheduled for Jan. 1 before the two countries reached an agreement on a negotiating timetable.

ArcelorMittal Reports Q1 Results

Steelmaker ArcelorMittal reported EBITDA of $1.7 billion in Q1 2019, down from $2.0 billion in Q4 2018.

Steel shipments were up 7.9% from Q4 2018 “primarily due to higher steel shipments in Europe (+14.4%) due in part to the acquisition of ArcelorMittal Italia (following its consolidation from November 1, 2018) and NAFTA (+2.8%), offset in part by lower steel shipments in Brazil (-5.7%).”

“Our first quarter results reflect the challenging operating environment the industry has faced in recent months,” ArcelorMittal Chairman and CEO Lakshmi Mittal said. “Profitability has been impacted by lower steel pricing due to weaker economic activity and continued global overcapacity, as well as rising raw material costs as a result of supply-side developments in Brazil.”

Mittal also addressed high import levels, even after Europe’s approval of steel safeguard measures earlier this year.

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“We continue to face a challenge from high levels of imports, particularly in Europe, where safeguard measures introduced by the European Commission have not been fully effective,” Mittal said. “Although we are somewhat encouraged by the firmer price environment in China, this is not being reflected in Europe where in order to adapt to the current market environment we have recently announced annualized production cuts of three million tonnes in our flat steel operations. It is important there is a level playing field to address unfair competition, and this includes a green border adjustment to ensure that imports into Europe face the same carbon costs as producers in Europe.”

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This morning in metals news, Brazilian miner Vale SA reported its Q1 2019 production totals, ArcelorMittal is idling mills in Europe and U.S. Rep. Betty McCollum questioned Interior Secretary David Bernhardt regarding plans to advance copper-nickel mining in northeastern Minnesota.

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Vale SA Reports Q1 Output

Brazilian miner Vale SA reported its Q1 iron ore output and sales figures this week, showing sharp declines in both.

In late January, a dam breach at a Vale mine in Brumadinho left hundreds dead and hobbled production amid review of safety conditions at other mines; as such, the iron ore price has soared in the ensuing months.

Vale reported iron ore fines production of 72.9 million tons in Q1, down 28% from the previous quarter and down 11% from Q1 2018.

Meanwhile, iron ore fines and pellet sales volume reached 67.7 million tons, which marked a 30% drop from Q4 2018 and a 20% drop from Q1 2018.

ArcelorMittal Idles European Mills

Earlier this week, steelmaker ArcelorMittal announced plans to temporarily idle steelmaking production at its Krakow, Poland facilities and reduce production in Asturias, Spain.

“In addition, the planned increase of shipments at ArcelorMittal Italia to a six million tonne annual run-rate will be slowed down following a decision to optimise cost and quality over volume in this environment,” ArcelorMittal said.

“Together, these actions will result in a temporary annualised production reduction of around three million tonnes.”

U.S. Rep. Questions Interior Secretary Over Minnesota Mining Plans

During a budget hearing this week, U.S. Rep. Betty McCollum questioned Interior Secretary David Bernhardt over plans to advance copper-nickel mining in northeastern Minnesota, the Minneapolis Star Tribune reported.

The Minnesota Democrat raised concerns about the impacts of sulfide ore mining on public lands, referring to the proposed mining plans raise by Twin Metals Minnesota and mine owner Antofagasta.

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McCollum questioned Bernhardt about the status of documents related to the Trump administration’s reversal of an Obama administration decision to terminate Twin Metals’ federal mining leases and cancel a two-year study into the potential impacts of copper-nickel mining in the Superior National Forest on nearby wilderness areas.

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This morning in the metals news, President Donald Trump threatened to impose an additional $325 billion worth of tariffs on imports from China, SHFE steel futures are down on pessimistic news from this latest round of U.S.-China trade talks and doubts are growing about the ThyssenkruppTata Steel joint venture proposal.

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Tariff Threats

The U.S. and China continued with yet another round of trade talks last week as the two parties attempt to resolve the conflict that produced a total of $360 billion in tariffs last year.

That tariff figure could be on the rise.

Arguing that not enough progress is being made quickly enough, President Donald Trump announced the tariff rate on a previously imposed $200 billion in tariffs will rise from 10% to 25% on Friday (the increase was originally set to go into effect Jan. 1, but was delayed as negotiations began), CNBC reported.

In addition, Trump threatened to add $325 billion more in tariffs on China.

SHFE Steel Futures Drop

The developments on the trade front and Trump’s tariff announcement have impacted markets, including SHFE steel futures, which fell Monday, Reuters reported.

However, environmental measures enacted in the Chinese city of Tangshan, a major steelmaking hub, offered some price support, according to the report.

Thyssenkrupp-Tata JV in Doubt?

The proposed Thyssenkrupp-Tata Steel joint venture in Europe is under scrutiny by the European Commission — and is in danger of being blocked.

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According to a Financial Times report, the European Commission could be set to block the proposed merger unless the two firms make greater concessions. The proposed JV ultimately would create Europe’s second-largest steelmaking entity, behind only ArcelorMittal.

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This morning in metals news, U.S. Steel announced Thursday it plans to invest more than $1 billion at its Mon Valley Works facilities, Australian iron ore exports bounced back in April after being impacted by tropical cyclones in March and the zinc price fell to its lowest level in 2 1/2 months.

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U.S. Steel Announces $1B Investment

U.S. Steel announced today that it plans to invest more than $1 billion to build a “new sustainable endless casting and rolling facility” at its Edgar Thomson Plant in Braddock, Pennsylvania, and a cogeneration facility at its Clairton Plant in Clairton, Pennsylvania.

“The cutting-edge endless casting and rolling technology combines thin slab casting and hot rolled band production into one continuous process and will make Mon Valley Works the first facility of this type in the United States, and one of only a handful in the world,” the steelmaker said in a release.

First coil production is expected in 2022, the company said.

Australian Iron Ore Exports Pick Up

The Australian iron ore sector was impacted in late March by a pair of tropical cyclones that battered Western Australia, disrupting exports of the steelmaking raw material.

However, exports of iron ore from Australia did bounce back in April, Reuters reported.

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According to Reuters, exports rose 20% month over month in April, rising to 69.1 million tons of iron ore.

Zinc Price Falls

Zinc prices fell to their lowest levels since mid-March, Reuters reported, on concerns regarding demand and rising inventories.