Articles in Category: Company News

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This morning in metals, Shell’s chief executive says $80 oil is good for energy infrastructure investment, China’s Baowu is reportedly in talks to acquire a rival and base metals prices dropped on Tuesday.

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$80 Oil? Shell CEO Says It’s Not Unreasonable

In a CNBC interview, Shell CEO Ben van Beurden said $80 oil would not be unreasonable and would support energy infrastructure investment.

Van Beurden added some of the Trump administration’s quotas on steel imports have impacted the company’s construction projects.

MetalMiner’s Take: Shell is probably right in estimating the world can afford $80/barrel oil prices without harming growth; certainly, the U.S. economy is testament to that at the moment.

But rising steel costs due to import tariffs are causing oil companies headaches when funding new infrastructure projects, projects the industry desperately needs to overcome transportation bottlenecks and meet rising refined product demand overseas.

Outside of the U.S., oil majors are pushing ahead with large investments in a buoyant refining market. Exxon just announced a half-billion-dollar upgrade to its giant Fawley refinery in the U.K. to meet rising demand, surely a sign the oil price and demand trump construction costs.

Baowu Eyeing Rival Firm

According to a Reuters report, the Chinese steelmaking heavyweight China Baowu Steel Group is in talks to acquire rival Magang Group.

Per the report, the combined output of Baowu and Magang last year surpassed total U.S. production.

Metals Prices Drop

Base metal prices struggled on Tuesday, according to a Reuters report, on the heels of a one-day closure of Chinese markets.

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After surging Friday, LME copper dropped 0.8% on Tuesday.

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This morning in metals news, copper prices approached a 10-week high, trade tensions continue to rise between the U.S. and China, and an Australian coal miner boasts a $4.4 billion IPO.

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Copper Prices Hover Near 10-Week High

Even with trade tensions weighing on markets, copper prices reached nearly a 10-week high, according to Reuters, despite dropping on Monday.

The U.S. recently announced a new batch of tariffs on Chinese goods amounting to $200 billion, while China responded with $60 billion in tariffs on U.S. goods.

China Says U.S. is Acting Like a Trade Bully

As trade tensions took a big leap forward in recent weeks, China has accused the U.S. of trade bullying, according to a BBC report.

The U.S.’s $200 billion in tariffs and China’s retaliatory $60 billion in tariffs went into effect today.

Coal Miner Has $4.4B IPO

An Australian coal miner, Coronado Coal, boasted a $4.4 billion IPO listing, the highest since the mining boom, according to The Sydney Morning Herald.

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The company expects earnings before interest, taxes, depreciation and amortization (EBITDA) of $578 million for 2018, according to the report.

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

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This morning in metals news, contract talks between United Steelworkers and U.S. Steel have been “frustrating,” China’s scrap usage increased during the first six months of the year and Thyssenkrupp’s CEO says the firm will forge on with plans to merge its European operations with those of Tata Steel

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Negotiations Continue

Contract talks between U.S. Steel and United Steelworkers continue to drag on, with the union referring to the dialogue as “frustrating,” according to a report by the Times of Northwest Indiana.

The union’s contract expired Sept. 1, but union members have stayed on the job. Earlier this month, the union voted to authorize a strike at U.S. Steel.

“These workers have made a number of sacrifices over the past several years – including three years with a wage freeze – to put this company back on track,” USW International President Leo W. Gerard said in a prepared statement Sept. 10. “Now that U.S. Steel is expecting to make a profit of nearly $2 billion this year, it is time for the workers to share in the success U.S. Steel is seeing now.”

Scrap Usage on the Rise in China

According to S&P Global Platts, China’s scrap usage in the first half of 2018 increased.

Per the report, 87.72 million mt of scrap was used by steel mills in the first half of 2018, while 148 million mt was used in all of 2017.

Thyssenkrupp CEO Says Tata Deal Still On

The interim chief executive of Thyssenkrupp says the German firm’s previously agreed upon deal to merge its European operations with those of Tata Steel will continue as planned, according to a Reuters report.

Heinrich Hiesinger, the previous CEO, stepped down in July, forcing the German firm to replace the chief executive who helped bring the Tata deal to fruition. Guido Kerkhoff has served as interim CEO following Hiesinger’s departure.

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The merged operations would combined to create Europe’s second-largest steelmaker, behind only ArcelorMittal.

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This morning in metals news, India is considering upping its steel import duty, China’s spending on subways could assist its steel sector and an update in the Rusal sanctions saga.

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Supporting the Rupee

In order to give support to its currency, the Indian government is considering increasing its import duty on some steel products, according to a Reuters report.

Current duties range from 5% to 12.5%, according to the report, while the government is considering raising the duty to 15%.

Steel and Subways

China’s push toward subway investment could be a boon for its steel sector, Reuters reported.

Last month, the cities of Suzhou and Changchun announced plans to spend the equivalent of billions of dollars to add approximately 1,000 miles to their underground subway systems, according to the report.

A Little Leeway

With the Oct. 23 deadline approaching, many are wondering if the U.S. will in fact rescind the sanctions imposed back in April on Russian companies (including aluminum giant Rusal).

Even so, a new development could help to mitigate the type of market reaction seen in April, when aluminum prices skyrocketed on the news of the sanctions.

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According to Bloomberg, the U.S. Treasury Department is allowing Rusal’s existing customers to negotiate new contracts.

The aluminum market is facing much more uncertainty now than it was in February 2018 when Norsk Hydro agreed with Rio Tinto to buy the 205,000-ton-per-year capacity ISAL aluminum smelter, located in Hafnarfjörður, Iceland.

According to the Financial Times, that deal included the balance 53.3% share in the Aluchemie anode plant in the Netherlands that Hydro does not own and a 50% share in the aluminum fluoride plant in Sweden, from Rio Tinto.

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The transaction to acquire Rio’s last remaining aluminum assets in Europe was initially expected to be finalized in the second quarter of 2018 following the surprise agreement by Rio to sell its aluminum Dunkerque smelter in France to Liberty House for U.S. $500 million in June.

The announcement of sanctions on Oleg Deripaska in April this year — and by extension En+ and Rusal, the largest aluminum producer outside of China — has cast some doubts on alumina supplies for European smelters, as Rio sources some of the alumina for its ISAL plant from the Russian company’s Aughinish refinery in Ireland.

But Rio seemed quite confident it could source alumina from elsewhere and Norsk Hydro certainly has enough alumina supply options around the world that raw material supply should not be a major issue.

No, the main reason the firm pulled out seems to be the initial feedback from the E.U. competitions authority, which was raising concerns about market domination reducing competition in Europe if the deal had gone through.

Norsk Hydro makes around 2.1 million tons of primary aluminum a year and ISAL would further consolidate its position as the largest primary supplier in the European market. However, competition authorities may still have had one eye on the Rusal situation.

If, as some are now beginning to question, the sanctions are not lifted in October when the current extension expires, primary metal supply will become very tight in Europe again.

Rusal produced some 3.7 million tons last year according to its annual accounts. While a proportion is consumed domestically, some 0.9 million tons, a significant percentage is exported to the European market, usually under annual supply agreements. If that tonnage is denied the European market due to sanctions, competitions authorities may worry the remaining suppliers will have too much influence to ensure an open and competitive marketplace.

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Fortunately, Rio is making good profits out of its aluminum business, the Financial Times reports — some U.S. $1.58 billion last year — so it is hardly desperate for a sale.

Still, investors were not heartened by the news. Rio’s share price dropped $0.14 on the news, down nearly 16% from its 2018 high of $86.75 in May of this year.

Source: wto.org

This morning in metals news, China went to the World Trade Organization to file a complaint regarding the U.S.’s $200 billion worth of tariffs announced Monday, Nucor resumes operations in the Carolinas following Hurricane Florence and copper prices rally.

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China Goes to the WTO

Following the U.S.’s announcement Monday of its intention to slap $200 billion worth of tariffs on imports from China as of Sept. 24, China has gone to the World Trade Organization (WTO) to file a complaint, Reuters reported.

The U.S. announced plans to impose a 10% tariff on $200 billion worth of Chinese imports on Monday.

Nucor Operations Restart in North Carolina, South Carolina

After halting its operations in the Carolinas last week ahead of Hurricane Florence, Nucor’s plants in the two states are back up and running, S&P Global Platts reported.

Copper Prices Rise

Despite an escalation in trade tensions between the U.S. and China, the price of copper rallied Tuesday, Reuters reported.

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LME copper jumped 1.4% Tuesday, according to the report.

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This morning in metals news, President Donald Trump again expressed support for imposing tariffs on imports (as the U.S. considers further tariffs on Chinese goods), shares of the Chinese aluminum giant China Hongqiao fell, and base metals prices are down on the prospect of escalating tariffs between China and the U.S.

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Tweeting for Tariffs

On Monday morning, President Trump expressed support yet again for his administration’s strategy of tariffs:

Tariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country – and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be “Tariffed!”

He also made direct reference to the steel industry:

Our Steel Industry is the talk of the World. It has been given new life, and is thriving. Billions of Dollars is being spent on new plants all around the country!

The U.S. has already slapped a total of $50 billion worth of tariffs on Chinese goods, and, according to The New York Times, the president is expected to announce an additional $200 billion in tariffs on Chinese goods this week, which would mark a significant escalation in tensions between the two countries.

China Hongqiao Shares Fall

Shares in Chinese aluminum maker China Hongqiao dropped on the news of new fees announced by Shandong province, Reuters reported.

Shares fell by as much as 8.5% Monday after falling nearly 16% Friday, according to the report.

Base Metals Prices Drop

Speaking of trade tensions, said tensions have had a depressive effect on base metals prices, according to Reuters.

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Base metals prices fell across the board Monday in anticipation of an expected announcement this week from the U.S. regarding an additional $200 billion in tariffs on Chinese goods.

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This morning in metals news, the United Steelworkers union is reportedly not happy with U.S. Steel’s latest contract proposal, Vice President Mike Pence touts a steel resurgence in Michigan and South Korean firms seek an exemption from the E.U. steel safeguards.

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Union Not Happy with U.S. Steel Proposal

Contract talks are ongoing between U.S. Steel and the union representing its workers, United Steelworkers. However, according to a report by the Times of Northwest Indiana, the firm’s latest proposal wasn’t met positively by the union.

Pence Visits Michigan, Talks Steel Comeback

In a visit to a steel processing facility in Grand Rapids, Michigan, Vice President Mike Pence touted the administration’s steel tariff and its role in aiding the steel industry, the Detroit News reported.

“Get ready to get even busier,” the vice president told company officials and hard-hat workers during a speech at the steel processing facility, according to the report.

South Korea Seeks Exemptions

South Korean steel producers are looking to win exemptions on provisional steel safeguards imposed by Europe, S&P Global Platts reported.

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Steel product exports from South Korea into Europe amount to 3.24 million mt per year, according to the report.

Nucor Suspends Operations at Two Mills Ahead of Hurricane Florence

Nucor halted operations at two of its mills in the Carolinas ahead of the expected impact of Hurricane Florence on Thursday, according to an Argus report.

The plants in question are Nucor’s Berkeley, South Carolina sheet mill and its Hertford, North Carolina plate mill.

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This morning in metals news, Nucor announced plans late last week to invest $650 million in its Kentucky sheet mill, ArcelorMittal put in a revised bid for Essar Steel and China warns it will retaliate if the U.S. imposes further tariffs.

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A Big Investment

The Nucor Corporation announced Friday that it planned to invest $650 million in to expand the production capability of Nucor Steel Gallatin, its flat-rolled sheet steel mill in Ghent, Kentucky.

“This investment is another major component of our planned strategy for long-term profitable growth,” said John Ferriola, chairman, CEO and president of Nucor. “Together with the new galvanizing line, this expansion increases our presence in the important Midwest market, specifically in the automotive, agriculture, heavy equipment, and energy pipe and tube sectors.”

According to the release, Nucor acquired the former Gallatin Steel Company in late 2014 for approximately $780 million.

ArcelorMittal Revises Essar Bid

ArcelorMittal submitted a higher bid for the bankrupted Essar Steel, the Economic Times reported.

According to the report, the new bid is higher than the bid submitted by another suitor, Numetal.

China Warns of Tariff Retaliation

As the U.S. mulls whether to impose tariffs on Chinese goods worth approximately $200 billion, China warned it would retaliate against additional tariffs, ABC News reported.

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In addition, President Donald Trump indicated Friday he was considering tariffs on an additional $267 billion worth of goods (in addition to the aforementioned $200 billion currently under review).