Articles in Category: Company News

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This morning in metals news, U.S. Trade Representative Robert Lighthizer on Tuesday said the U.S. is working on a “practical solution” to lift the steel and aluminum tariffs on Canada and Mexico, China is expected to have a 2.65-million-ton copper deficit this year, and a preliminary report on iron ore miner BHP’s train derailment in November said operators mistakenly applied brakes on the wrong train.

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USTR: U.S. Aims to Remove Steel, Aluminum Tariffs on Canada, Mexico While Preserving Gains for U.S. Industry

The United States-Mexico-Canada Agreement (USMCA), the successor to NAFTA, still must be ratified by the legislatures of the three countries.

A hangup toward that end is the fact that the U.S.’s Section 232 tariffs on steel and aluminum remain in effect for Canada and Mexico. The two countries have indicated they would not approve the deal without removal of the tariffs. Likewise, some U.S. politicians have argued for the removal of the tariffs for the U.S.’s northern and southern neighbors.

On Tuesday before the Senate Finance Committee, U.S. Trade Representative Robert Lighthizer said the U.S. is working on a “practical solution” to remove the tariffs while preserving gains the U.S. steel and aluminum industries have made in the last year.

“What I’m trying to do is a have a practical solution to a real problem … get rid of tariffs on these two, let them maintain their historic access to the U.S. market which I think will allow us to still maintain the benefit of the steel and aluminum program,” he was quoted by Reuters as saying.

China’s Copper Deficit

China is expected to post a copper deficit of 2.65 million metric tons this year, S&P Global Platts reported.

The report, citing data from a Beijing Antaike Information forecast, said copper demand is expected to rise 3% to 11.5 million metric tons, with production at 8.85 million metric tons.

Preliminary Report: Brakes Applied on Wrong Train in BHP Train Derailment

According to a preliminary report investigating the derailment of a BHP iron ore train in November, operators applied the brakes to the wrong train, Reuters reported.

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Per the report, the Australian Transport Safety Bureau will release a final report on the incident later this year.

The Renewables Monthly Metals Index (MMI) fell one point this month for an MMI reading of 103.

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The Hunt for Cobalt

As noted routinely in this installment of the MMI series, cobalt is a coveted material for its use in a wide variety of high-tech applications, from cellphones to laptops and much more.

A majority of the world’s cobalt is mined in the Democratic Republic of the Congo, where political instability and the government’s revision of its mining code (increasing royalty rates for cobalt and other materials) have posed business challenges to miners.

As such, it’s not surprising that some are looking for new sources of cobalt.

According to a Bloomberg report, a new startup powered by a coalition of billionaires, including Bill Gates, is seeking to do just that.

The startup, KoBold Metals, aims to create a “Google Maps for the Earth’s crust,” according to the report, in an effort to locate new sources of cobalt.

“KoBold Metals applies statistical modeling, big data aggregation, and basic science to materially improve the pace and efficacy of natural resources exploration,” KoBold’s website states. “We are applying our proprietary platform, Machine Prospector, to explore for new sources of ethical cobalt from reliable jurisdictions.”

The approach would also offer more specific focus to cobalt, as opposed to mining of the material as a byproduct of copper or nickel, as is typically the case.

“People just haven’t looked for the stuff,” KoBold CEO Kurt House told Bloomberg. “There’s very limited history of exploration at all outside of piggybacking on nickel and copper deposits.”

Cobalt Price Slides

Sticking with the cobalt theme, the price of the coveted material plunged throughout the second half of 2018 — and a recovery is not expected in the near term.

According to Reuters, the cobalt price fell to a two-year low of $32,000 per ton, down from $100,000 per ton in the first half of 2018.

What contributed to the plunge? According to the report, high prices led to an uptick in supply. However, cobalt demand is expected to exceed supply in the long term, according to the report.

GOES Prices Fall

The price of grain-oriented electrical steel (GOES) fell 4.1% month over month to $2,360/mt as of March 1.

The GOES MMI fell 8.2% for a March value of 168.

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Actual Metal Prices and Trends

Japanese steel plate fell 2.3% month over month to $772.30/mt as of March 1. Korean steel plate rose 1.9% to $586.67/mt. Chinese steel plate increased 3.8% to $642.72/mt.

U.S. steel plate fell 1.8% to $997/st.

The Chinese neodymium price fell 1.8% to $58,29.10/mt. Chinese silicon rose 0.2% to $1,539.54/mt, while Chinese cobalt cathodes jumped 0.2% to $99,397.20/mt.

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This morning in metals news, China’s export levels fell last month, White House economic adviser Larry Kudlow is optimistic about a U.S.-China trade deal and an Australian gold miner is buying a Canadian copper and gold mine for $806.5 million.

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China’s Exports Take a Dip in February

According to CNBC, China’s exports fell more than 20% in February.

Previous media reports indicated the U.S. and China could be set to ink a deal later this month that could end the current state of trade tensions.

According to the report, China’s February trade balance of $4.12 billion came in well short of economists’ expectation of a balance of $26.38 billion.

Kudlow ‘Bullish’ on China Deal

Speaking of U.S.-China trade talks, White House economic adviser on Sunday said he is still “bullish” on the prospects of a deal with China, Politico reported.

“Across the board, the deal has to be good for the United States and for our workers, and our farmers, and our manufacturing,” Kudlow told “Fox News Sunday,” according to the report. “It’s got to be good. It’s got to be fair and reciprocal and it’s got to be enforceable.”

Newcrest to Buy Canadian Mine for $806.5M

Australian miner Newcrest Mining Ltd. is set to buy a Canadian copper and gold mine for $806.5 million, Reuters reported.

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Newcrest announced it is aiming to purchase a 70% joint-venture interest in the mine, located in British Columbia, from Imperial Metals Corp.

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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 storylines here on MetalMiner:

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This morning in metals news, China’s copper imports fell in February, U.S. Steel won an award sponsored by the Department of Energy and General Motors rolled out its last Chevy Cruze this week.

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Copper Imports, Aluminum Exports Down in China

China’s February copper imports fell to their lowest level in 11 months, Reuters reported, while copper concentrate imports rose to an all-time high.

Meanwhile, China’s aluminum exports fell 37.9% in February compared to the previous month, according to the report.

U.S. Steel Wins DOE Award

U.S. Steel won an award from the High-Performance Computing for Manufacturing Program sponsored by the Department of Energy, which will allow the company to “expand the company’s manufacturing capabilities for advanced high-strength steel.”

“The goal of the winning project, drafted by researchers Evgueni Nikitenko and Susan Farjami at U. S. Steel’s Research and Technology Center in Munhall, Pa., is to enhance the company’s hot strip mill model used in creating AHSS,” a U.S. Steel release stated. “This type of steel is used by automakers to manufacture economically lightweight vehicles to meet increasing fuel efficiency requirements while maintaining exceptionally high safety standards.”

According to the release, the project research will take place at the Lawrence Livermore National Lab, which will receive $300,000 to collaborate with U.S. Steel.

End of the Cruze

Per its announcement late last year, General Motors idled its Lordtown, Ohio assembly plant earlier this week, where the automaker rolled out its last Chevy Cruze vehicle.

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According to NBC News, the closure will lead to the elimination of nearly 1,700 hourly jobs by the end of the month.

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In what’s been dubbed as a rather unique agreement for an Indian steel company, JSW Steel this week signed a payment and supply deal with Duferco International Trading Holding (DITH) for U.S. $700 million.

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According to reports, the five-year agreement provides DITH with supplies of various steel products over the agreement term. For JSW, on the other hand, it confirms a steady flow of funds for its growth plans.

JSW Steel, one of India’s largest steelmakers, recently received a letter of intent in the auction of the insolvent Bhushan Power & Steel Ltd., taking it one step closer to acquisition of Bhushan. Also, late last year JSW Steel announced a multimillion-dollar plan to strengthen its downstream manufacturing capacity.

The new arrangement with DITH entails a financing structure that will provide JSW long-term funding to complement its plans for future growth, secured by committed exports of steel products to DITH, the company said in a statement.

This is not the first time that JSW and DITH have entered into a deal; there have been smaller agreements in the past 15 years. The deal, according to reports, was “the largest trade finance facility” to have been arranged in the Indian steel sector.

According to the company, the deal has been arranged and financed by a number of global banks:  BNP Paribas, Citibank, Credit Suisse, ING, Mashreqbank, Natixis, Societe Generale, with Standard Chartered Bank acting as mandated lead arrangers and bookrunners.

JSW Steel is the flagship company of the U.S. $13 billion JSW Group. The company has about 50,000 customers in 108 countries, and a recorded turnover of U.S. $7 billion, with sales of 12 million tons per annum.

Going by JSW’s plans, Moody’s Investors Service recently revised the outlook on JSW Steel to positive from stable, citing an improved credit situation.

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Moody’s also affirmed JSW Steel’s Ba2 corporate family rating (CFR) and the Ba2 rating on the company’s senior unsecured notes.

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This morning in metals news, the U.S.’s trade deficit with China reached an all-time high in 2018, one analyst says there’s a 35% chance U.S.-China trade talks will break down and aluminum maker Norsk Hydro’s technology pilot is up for a Green Award in the category of Innovation of the Year.

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U.S. Notches Record Trade Deficit with China

Among President Donald Trump’s oft-stated goals vis-a-vis trade talks with China is the reduction of the U.S. trade deficit with China.

However, despite a series of tariffs aimed at Chinese goods (the U.S. imposed a total of $250 billion worth of tariffs on goods from China last year), the deficit reached an all-time high in 2018.

According to U.S. Census Bureau data, the trade deficit rose from $375.6 billion in 2017 to $419.2 billion in 2018.

Communication Breakdown

Optimistic reports have come out of the White House of late with respect to the ongoing trade talks with China, with some media reports indicating a trade deal could be reached by the end of this month.

However, according to one analyst, there’s still a sizable chance talks could break down.

According to Eurasia Group analyst Jeff Wright, there is a 35% chance the talks will break down before a deal can be reached, Yahoo Finance reported.

“The current momentum behind a deal does not reduce the risk of major frictions once the two sides turn towards implementation,” Wright told Yahoo Finance.

In addition to the trade deficit, the U.S. has raised a bevy of allegations related to what it deems as China’s unfair trade practices, from intellectual property theft to forced technology transfer, among other complaints.

In August 2017, the United States Trade Representative, at the direction of the president, opened a Section 301 investigation into China’s trade practices; the investigation ultimately yielded the total $250 billion worth of tariffs imposed last year.

Norsk Hydro Nominated for Green Award

Aluminum maker Norsk Hydro was nominated for a Green Award in the category of innovation for its technology pilot in Karmøy, Norway.

“A lot of Hydro people have put so much effort into making the technology pilot a reality. They deserve this award,” said Thorvald Mellerud, head of technology in Hydro Primary Metal.

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The operation in Karmøy has been fully operational since June 2018 and “aims to verify at an industrial scale the world’s most energy and climate-efficient technology for aluminium production,” Norsk Hydro said in a release, adding that energy consumption will be reduced by 15%.

The Automotive Monthly Metals Index (MMI) picked up one point this month, rising for an MMI value of 93.

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U.S. Auto Sales

As noted in previous reports, General Motors last year announced a switch from monthly sales reports to quarterly reports. Fellow Big Three automaker Ford Motor Co. has followed suit, recently announcing it would also move to a quarterly reporting schedule.

“We knew that a lot of our competitors would watch to see what our experience would be and if we’d stick to our guns,” GM spokesman Jim Cain told the Detroit Free Press. “We always expected they’d follow.”

Meanwhile, most automakers continue to report on a monthly basis. Fiat Chrysler reported February sales fell 2% year over year, breaking an 11-month streak of year-over-year gains.

“The overall industry is starting off slower due in part to weather, the U.S. government shutdown and concern over tax refunds,” U.S. Head of Sales Reid Bigland said. “We still see a strong, stable economy and anticipate any lost winter sales will be made up in the spring. For us, the Ram brand was the standout in February, and Jeep Cherokee set a February record as well.”

Honda saw its total sales dip 0.4% year over year in February. However, Honda’s Acura brand posted a strong February, with Acura sales increasing 11.3% year over year.  Sales of Acura trucks increased 23.9% year over year.

Nissan’s U.S. sales dropped 12% year over year. Nissan’s ousted former CEO Carlos Ghosn was granted bail by a Tokyo court, NPR reported, as he awaits trial on corruption charges.

Subaru reported a 3.9% year-over-year sales increase, with its Forester performing well in the year to date (up 17.6% compared with January-February 2018 sales). However, earlier this month Subaru recalled 1.3 million vehicles due to brake light issues, impacting certain Forester, Impreza and Crosstrek vehicles.

Section 232 Auto Report Moves to Trump

Last month, Secretary of Commerce Wilbur Ross submitted a report to President Donald Trump related to the Trump administration’s Section 232 investigation on imports of automobiles and automotive parts.

Pursuant to Section 232 of the Trade Expansion Act of 1962, once an investigation begins the commerce secretary has 270 days by which to provide the president with a report including recommendations. This particular investigation began May 23, 2018, setting the deadline on Feb. 17.

However, some industry groups have complained because the report was not made available to the public.

“It is critical that our industry have the opportunity to review the recommendations and advise the White House on how proposed tariffs, if they are recommended, will put jobs at risk, impact consumers, and trigger a reduction in U.S. investments that could set us back decades,” the Motor and Equipment Manufacturers Association said in a prepared statement. “Secrecy around the report only increases the uncertainty and concern across the industry created by the threat of tariffs. MEMA calls for the immediate and full release of the report.”

Meanwhile, the European Automobile Manufacturers’ Association (ACEA) issued a statement, arguing European automobiles do not pose a national security threat to the United States.

“Imports of cars and auto parts from the EU clearly do not pose a national security risk to the United States,” ACEA Secretary General Erik Jonnaert said. “Any trade restrictive measures in our sector will have a serious negative impact, not only on EU manufacturers but also on US manufacturers.”

Investments and Relocation

General Motors made waves late last year when it announced plans to close several of its North American plants and cut 15% of its workforce.

GM is far from the only automaker cutting costs and shuffling production, as MetalMiner’s Stuart Burns explained last month. Ford, Jaguar Land Rover, Nissan and Honda, among others, have either cut jobs or moved production.

“The U.S. market could be due for a severe shakeup if President Donald Trump’s threat to slap import tariffs on foreign cars comes into effect,” Burns explained.

“UBS Bank reckons that the worst case — tariffs of 25% — would see the American market shrink by 12% next year.”

As for investment, while GM previously announced the shuttering of five North American plants in 2019, it recently announced new investment in other plants. The automaker plans to invest a total of $56 million in two Michigan plants, located in Romulus and Lansing.

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Actual Metal Prices and Trends

U.S. HDG steel rose 1.8% month over month to $896/st as of March 1. U.S. platinum bars rose 6.0% to $869/ounce. U.S. palladium bars rose 14.9% to $1,522/ounce.

U.S. shredded scrap steel rose 5.7% to $332/st.

Chinese primary lead rose 0.8% to $2,615.72/mt. LME copper rose 5.3% to $6,494/mt.

Korean aluminum coil fell 3.5% to $3.31/kilogram.

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This morning in metals news, the copper price picked up steam, the U.S. terminated the status of India and Turkey as beneficiaries of the Generalized System of Preferences (GSP) program, and Vale SA shares fell as the Brazilian miner’s CEO and other executives resigned over the weekend.

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Copper Price Rises on China News

The copper price made gains Tuesday, Reuters reported, after China announced new stimulus measures that included tax cuts and infrastructure spending.

Benchmark LME copper was bid up 1.2% to $6,487 per ton, according to the report.

U.S. Removes GSP Designation from Turkey, India

The Office of the United States Trade Representative (USTR) announced Monday that it is terminating the status of India and Turkey as beneficiaries of the GSP program.

The GSP program allows some products to come into the U.S. duty-free if the exporting countries meet certain eligibility criteria, including maintaining efforts to combat child labor and protect intellectual property rights, among others.

“India’s termination from GSP follows its failure to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors,” a USTR release stated. “Turkey’s termination from GSP follows a finding that it is sufficiently economically developed and should no longer benefit from preferential market access to the United States market.”

Vale CEO Resigns

The CEO of Brazilian miner Vale SA resigned over the weekend, CBC reported, sending shares down as the company struggles in the wake of a dam breach at its Corrego do Feijao mine in January that left more than 300 dead.

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“Vale informs that, at the end of Friday, March 1st 2019, its Board of Directors received from the Federal Public Prosecution Office (Ministério Público Federal), the Public Prosecution Office of the State of Minas Gerais (Ministério Público do Estado de Minas Gerais), the Federal Police and the Civil Police of Minas Gerais the Recommendation Nº 11/2019 with considerations and recommendations on the dismissal of some executives and employees at various levels of the company,” Vale said in a release.

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This morning in metals news, the Wall Street Journal reports the U.S. and China are approaching a deal to roll back tariffs imposed over the last year, the Steel Authority of India Ltd. (SAIL) boosted iron ore production last month and iron ore prices are on the rise.

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A Trade Resolution?

Global markets have followed every twist and turn in the ongoing U.S.-China trade talks with bated breath.

The two countries have imposed a total of $310 billion worth of tariffs on each other’s goods since last summer, injecting uncertainty into markets and raising concerns about the moves’ impact on growth.

However, this weekend the Wall Street Journal reported the two countries might be nearing a deal to roll back the tariffs, Reuters reported. According to a source cited in the report, the countries may ink the deal during a summit later this month.

SAIL’s Iron Ore Production Soars

The Economic Times reported SAIL’s February iron ore production jumped 11.62% year over year.

The state-owned steelmaker posted an all-time record in daily average output, producing 66,620 tons per day.

Iron Ore Prices

Iron ore prices are surging, Business Insider Australia reported, partially on policy news from China’s biggest steelmaking city.

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According to the report, the city of Tangshan issued a smog alert that curbed industrial activity, which thus offered price support to higher grades of iron ore.