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This morning in metals news, steel production for the year through May 4 reached 33.7 million tons, Japan’s March steel exports jumped and Dalian iron ore futures made gains on supply concerns.

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U.S. Steel Production

According to the American Iron and Steel Institute (AISI), U.S. raw steel production for the week ending May 4 was 1.9 million net tons, at a capacity utilization rate of 82.3%. The week’s production marked a 6.6% increase from production for the equivalent week in 2018. 

Meanwhile, year-to-date production through May 4 hit 33.7 million tons, at a capacity utilization rate of 81.7%. 

Japan’s Steel Exports

Japan’s steel export levels surged 18.3% in March compared with the previous month, S&P Global Platts reported.

Exports, however, fell 17.9% on a year-over-year basis, according to the report.

Dalian Iron Ore Futures

Dalian iron ore futures jumped 4% Tuesday, Reuters reported, partially aided by supply-side concerns stemming from Brazilian miner Vale’s Brucutu iron ore mining complex.

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According to the report, a court order reversed a previous decision that had allowed Vale to reopen its Brucutu mine in the state of Minas Gerais.

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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.

Source: Tesla

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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• Stuart Burns on the cooling Tesla-Panasonic relationship.
• India’s steel exports to the U.S. plunged last year.
• Belinda Fuller took a look at tin prices, which have leveled off after a hot start to the year.
• The London Metal Exchange kicked off a formal consultation period on ethical sourcing principles for LME-listed brands.
• U.S. imports of Chinese aluminum foil dropped 64% last year, according to the Aluminum Association.
• The European Commission approved the sale of a number of ArcelorMittal’s European assets to Liberty House Group.
• The U.S. Department of Commerce made a preliminary affirmative determination in its anti-dumping probe of steel wheels from China.
• Burns delved into oil market trends and the ongoing attempt at balance.

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Amidst the trade tension that exists between the United States and India, now comes a report that India’s steel exports to the U.S. last year fell by a whopping 49%.

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On the other hand, exports of Indian aluminum went up by 58%.

The report by the independent Congressional Research Service (CRS), which said the value of Indian steel exports to U.S. was down to U.S. $372 million but aluminum was up to $221 million.

The U.S. had imported steel and aluminum products totaling $29.5 billion and $17.6 billion, respectively, in 2018.

Quoting from the CRS report, the Hindu Business Line said the countries to see the largest declines in the value of their steel exports to the U.S. were:

• South Korea (-$430 million, -15%)
• Turkey (-$413 million, -35%)
• India (-$372 million, -49%)

There were major increases in imports from the European Union (+$567 million, +22%), Mexico (+$508 million, +20%) and Canada (+$404 million, +19%).

According to the CSR, the countries seeing the largest declines in their export totals to the U.S. were:

• China (-$729 million, -40%)
• Russia (-$676 million, -42%)
• Canada (-$294 million, – 4%)

Major increases were from:

• the E.U. (+$ 395 million,+9%)
• India (+$ 221 million,+58%)
• Oman (+$186 million, +200%).

Last year, U.S. President Donald Trump decided to impose blanket tariffs on steel and aluminum imports, which applied to India, as well as other countries (such as China). India then proposed retaliatory tariffs against U.S. agricultural products, including apples and lentils, which experts believed would have had an adverse impact on American exports worth nearly U.S. $900 million.

However, India has continued to defer with respect to this option.

The U.S. president had given temporary exemption to several countries from the tariffs pending negotiations. Later, permanent tariff exemptions in exchange for quantitative limitations on U.S. imports were announced covering steel for Brazil and South Korea, and both steel and aluminum for Argentina.

The latest CRS report pointed out that one of the U.S.’s major concerns was overcapacity in steel and aluminum production led by China.

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The U.S. had imposed extensive anti-dumping and countervailing duties on Chinese steel imports to counter the latter’s unfair trade practices, but experts believe the size of Chinese production continues to depress prices globally, according to the CRS report.

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Stock and currency markets have been a little perkier the last week or so as expectations rise of some form of Chinese stimulus to boost demand — and, hence, global growth.

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That optimism, though, may be somewhat misplaced.

China has limited scope of debt-fueled stimulus of the type employed in the past, so a pick-up in demand resulting from fiscal measures may be more muted than some optimists hope.

Still, hopes were raised when Premier Li Keqiang closed a briefing to the National People’s Congress with a number of announcements. Beijing intends to use tools such as lowering bank reserve requirements, according to Bloomberg.

However, a promise to reduce VAT on manufactured goods from the current 16% to 13% from April 1 gave a definite fillip to traders and cast depression among hard-pressed aluminum semis manufacturers in the region. More competitively priced Chinese aluminum semi-finished product is the last thing regional aluminum producers want on their doorstep.

The measure is expected to further boost exports, which have already been running at near-record levels in 2018-19. According to Aluminium Insider, exports have risen from 517,000 tons per month last August to 552,000 tons in January to set a new record. Primary producers, who had been meeting to negotiate capacity closures in the face of slowing demand, are reportedly now likely to reverse that decision in the hope demand will pick up.

According to Aluminium Insider, the move is expected to pump in the region of CNY 600 billion (U.S. $90 billion) into the manufacturing sector, boosting the country’s gross domestic product by 0.6%. The move comes as the latest in a series of changes to the country’s tax regime conducted by Beijing, carried out to bolster the economy after manipulations of monetary policy and further debt-based spending have become increasingly difficult avenues for effecting change.

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Optimism is supported by the widespread belief that an agreement on China’s trade war with the U.S. is just a matter of weeks away — but the much-touted trade summit between President Donald Trump and Premier Li Keqiang has been postponed yet again, and may now not take place until well into April or even May.

A successful trade deal is by no means a certainty, as much as the markets will look for any deal to be better than no deal.

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This morning in metals news, Reuters reports the launch of the London Metal Exchange’s planned steel contract will likely be pushed back to 2020, China’s average daily steel output in January and February increased, and India’s imports of iron ore were up 157% during the April-December 2018 period.

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Steel Contract Delay

According to a Reuters report, the LME’s plans to launch a new steel contract could have to wait until next year.

Traders want the contract to be priced in euros rather than the dollar, according to the report.

China’s Steel Output Picks Up

According to another Reuters report, China’s average daily steel output picked up for the first two months of 2019 taken together compared with December 2018.

Average daily output for January and February combined (to account for the Lunar New Year holiday) reached 2.54 million tons, up from 2.32 million tons in December, according to the report.

India’s Iron Ore Imports Surge

India’s imports of iron ore during the April-December 2018 period jumped 157% year over year, according to the Business Standard.

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The report, citing the CARE Ratings agency, notes that India’s July 2018 iron ore import total of 1.93 million tons marked the country’s highest monthly import figure in the past five years.

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This morning in metals news, the Canadian government announced it is rolling out $100 million in funding for its domestic steel and aluminum industries, copper moves toward a seven-month high, and Vietnam’s steel exports to the U.S. increased in 2018.

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Canadian Steel, Aluminum Get a Boost

The Canadian government has announced it will offer $100 million in funding to small- and medium-sized aluminum and steel firms in the country, the CBC reported.

The U.S.’s Section 232 tariffs on steel and aluminum remain in place for NAFTA partners Canada and Mexico. Those tariffs are the primary point of contention as the successor to NAFTA — the United States-Mexico-Canada Agreement (USMCA) — still needs to be ratified by the three countries’ legislatures.

Copper Continues Hot Streak

The copper price moved toward a seven-month high on Tuesday, Reuters reported.

LME copper jumped 1% to $6,472.50 per ton, according to the report.

Vietnam Steel Sector Grows

Despite the U.S.’s aforementioned Section 232 tariffs, one southeast Asian country saw its steel exports to the U.S. rise last year.

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According to an S&P Global Platts report, Vietnam’s finished steel exports to the U.S. surged 48% in 2018 compared to 2017.

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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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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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This morning in metals, U.S. imports of steel dropped 12% year over year last year, Chile’s copper and lithium export revenue fell in February and markets react to uncertainty over the ongoing U.S.-China trade talks.

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Imports of Steel Drop 11.5%

U.S. steel imports fell 11.5% in 2018 compared with the previous year, according to an American Iron and Steel Institute (AISI) report citing U.S. Census Bureau data.

Total steel imports hit 33.7 million net tons in 2018, according to the report. Finished steel import market share for 2018 hit 23%, according to the report, and was 19% in December.

Chile’s Copper, Lithium Export Value Drops

Revenue stemming from Chile’s copper and lithium exports in February fell compared with the same month the previous year, according to a Reuters report.

Chile’s copper export revenue in February fell 19% year over year, according to the report, while lithium export revenue dropped from $76 million in February 2018 to $60 million last month.

Asian Markets Down on Trade Uncertainty

A recent uptick in optimism surrounding U.S.-China trade talks appears to have taken a hit — if Asian markets are any indication.

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According to MarketWatch, Asian markets were down Thursday. Japan’s Nikkei 225, South Korea’s Kospi and Hong Kong’s Hang Seng all slipped on Thursday, according to the report.