freshidea/Adobe Stock

This morning in metals news, the United States Trade Representative USTR once again dished up criticism of the World Trade Organization’s (WTO) Appellate Court, China aims to mitigate the impact of rising iron ore prices on its steelmakers and India’s steel exports have plunged over the last year.

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

‘Determined to Take All Necessary Steps’

The USTR took aim Tuesday at a WTO Appellate Court ruling on China’s countervailable subsidies.

“Today’s appellate report recognizes that the United States has proved that China uses State-Owned Enterprises (SOEs) to subsidize and distort its economy,” the USTR said in a prepared statement. “Nonetheless, the majority in the report says that the United States must use distorted Chinese prices to measure subsidies, unless the U.S. provides even more analysis than the hundreds of pages in these investigations.  This conclusion ignores the findings of the World Bank, OECD working papers, economic surveys, and other objective evidence, all cited by the United States.”

The Trump administration has often criticized the WTO; the USTR said the recent report “also illustrates the concerns the United States has been raising about the Appellate Body’s functioning.”

“The United States is determined to take all necessary steps to ensure a level playing field so that China and its SOEs stop injuring U.S. workers and businesses,” the USTR concluded.

China’s Steelmakers and Rising Iron Ore Prices

Steelmakers in China have been feeling the pressure this year amid a surge in iron ore prices.

The Chinese government hopes it can do something to reverse the upward trend in the steelmaking material’s cost.

According to Reuters, in a government meeting with steelmakers, the former promised to keep “order” vis-a-vis the iron ore market.

Indian Steel Exports Down

India’s steel exports fell 34% in 2018-2019 compared with the previous fiscal year, the Hellenic Shipping News reported.

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

Exports fell to 6.36 million tons during fiscal year 2018-2019, according to the report.

niyazz/Adobe Stock

Much hope was pinned on the latest round of trade talks between the United States and India.

In the end, however, the talks that concluded late last week were inconclusive.

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

The Indian government said the countries agreed to continue their discussions for “addressing mutual trade concerns,” Reuters reported.

This round of meetings was supposed to chart the course ahead on trade between the two countries, particularly in the wake of the exchange of tariffs and counter-tariffs.

Yet, many of the questions on agricultural commodities, e-commerce, and steel and aluminum have been put off, according to the report.

Talks will now resume when India’s Commerce and Industry Minister Piyush Goyal goes to Washington next month for talks with United States Trade Representative Robert Lighthizer, Reuters reported.

“The meeting was cordial and aimed at providing a new impetus to bilateral trade and commercial ties, in line with the mandate given by Prime Minister Narendra Modi and the US President Donald Trump during their meeting at Osaka, Japan on June 28, 2019,” Goyal said, according to The Asian Age. “Both sides discussed the broad contours of bilateral trade and commercial ties and agreed to continue their discussions for achieving mutually beneficial outcomes aimed at further growing the economic relationship and addressing mutual trade concerns.”

The U.S. delegation, led by Assistant United States Trade Representative (AUSTR) Christopher Wilson, aimed to explore potential for enhanced bilateral trade and economic engagement with India under the new government, The Asian Age reported. The Indian delegation was led by Sanjay Chadha, additional secretary in India’s ministry of commerce and industry, and also included senior officials from other Indian government ministries.

After delaying the imposition of tariffs on U.S. goods, the Indian government recently opted to levy tariffs on 28 U.S. goods in response to the U.S.’s decision to rescind India’s preferential status under the Generalized System of Preferences (GSP). President Donald Trump announced his intention to remove India’s preferential status in March.

The GSP affords duty-free tariff treatment “to certain U.S. imports from eligible developing countries to support their economic development.” According to the Congressional Research Service (CRS), U.S. imports from India covered by GSP accounted for 11% of U.S. imports from India, checking in at a value of $6.3 billion.

The U.S. was India’s second-largest export market — behind only the E.U. — in 2017, according to the CRS.

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

The U.S. goods targeted for tariffs by India included almonds, apples, chemicals, flat-rolled stainless steel products, other alloy steel, tube, pipe fittings, screws, bolts and rivets.

In a July 9 tweet, Trump said “India has long had a field day putting Tariffs on American products,” adding the situation was “no longer acceptable.”

Zerophoto/Adobe Stock

This morning in metals news, the Chinese steelmaking province of Hebei has moved up its target date for plant relocation and capacity cuts, miners in the Democratic Republic of the Congo are moving to copper as a result of dropping cobalt prices, and Chile’s copper exports fell in June.

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

Hebei Moves Up Capacity Cut Target Date

China’s steelmaking province of Hebei is moving up a target date for planned capacity cuts and production relocation, Reuters reported.

According to the report, the province is moving the target date by two months, up to the end of October.

Cobalt to Copper

With cobalt prices on the decline, miners in the DRC are switching to copper, Bloomberg reported.

The country produces a majority of the world’s cobalt, which is used in electric vehicles and smartphones, among other high-tech uses.

The report cities Andries Gerbens, a cobalt specialist at Darton Commodities, who said output by artisanal miners in the country could decline by 70% this year.

Chile’s Copper Exports Fall

Chile’s exports of copper declined in June, Reuters reported.

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

According to Chile’s central bank, the country’s copper exports fell 14% in June on a year-over-year basis, down to a value of $2.628 billion.

That the news is all about trade makes a change for us business folks from the tittle-tattle around the private lives of politicians or celebrities, as trade is topic that actually touches all of us (whether we are immediately aware or not).

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

That President Donald Trump has made trade dispute a central plank of his first presidency is no surprise.

Throughout his presidential campaign, Trump frequently made reference to what he sees as unfair trade terms enjoyed by America’s trade partners and his intention to use whatever means he could to right the perceived wrong. “Trade wars are good,” he famously said on the campaign trail — he has certainly followed through with that in office.

Just as there appears to be a thaw — or at least a renewed willingness to talk — between the U.S. and China following the G20 summit in Japan, the president has renewed his previous spat with Europe, which ranges across a number of topics.

In addition to the general argument that the U.S. exports less to Europe than Europe does to the U.S., there are specific grievances over automobiles. The U.S. applies a lower rate of duty on European sedans than Europe does on U.S. cars and the company-specific case of subsidies to Airbus, the administration claims, are unfair.

This last one has been the subject of a flare-up this month. The U.S. threatened fresh tariffs on $4 billion covering 89 European products, The Guardian reports, including olives, Italian and Dutch cheese, Scotch whiskey, Irish whiskey, pasta, coffee, and ham. These items join products worth $21 billion that were announced as potential targets for tariffs in April, the paper reports, which included Roquefort cheese, wine, champagne, olive oil and seafood (such as oysters).

The latest list notably also includes a number of copper products, metal consumers should note, including bars, plate, strip and foil (the full list can be found here). The rights and wrongs of the case can be argued with equal validity on both sides, the E.U. claims — and has done since 2004 — that Boeing receives illegal subsidies. Meanwhile, U.S. claims Airbus does.

The reality is both receive state support in one form or another and the WTO has upheld cases in favor of both parties against the other.

So what are you left with?

Read more

byrdyak/Adobe Stock

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

• In case you missed it, MetalMiner’s June 2019 Monthly Metals Index report is out.
• MetalMiner’s Belinda Fuller delved into Chinese steel prices and trends in a two-part series earlier this week (Part 1, Part 2).
• U.S. steel production is up 5.9% through the first 5 1/2 months of the year compared with the equivalent period in 2018.
• U.S. housing starts declined in May.
• MetalMiner’s Stuart Burns surveyed the state of the U.S. Midwest Premium — that is, why it remains so high.
• MetalMiner’s Sohrab Darabshaw on India’s retaliatory tariffs on U.S. goods and what they mean for future relations between the U.S. and India.
• Burns on gold’s boost from Federal Reserve news this week.
• Earlier this week, Mexico became the first of the three NAFTA countries to ratify the United States-Mexico-Canada Agreement (USMCA).

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

Zerophoto/Adobe Stock

This morning in metals news, Australian Prime Minister Scott Morrison said the country’s aluminum exports to the U.S. are fair, China’s Baowu Steel is acquiring a majority stake in rival Magang and the USTR announced an extension related to duties imposed on Chinese goods.

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

Australia Abiding by Export Deal

Australian Prime Minister Scott Morrison said his country is sticking to its deal with the U.S. over aluminum exports, Reuters reported. The assurance comes on the heels of a report by The New York Times stating President Donald Trump considered imposing new tariffs on Australia.

Australia received exemptions from the U.S.’s Section 232 steel and aluminum tariffs imposed last year.

Baowu to Buy Majority Stake in Rival

Chinese steel giant Baowu Steel Group is buying a majority stake in rival steelmaker Magang Group Holding Co Ltd, Reuters reported.

Baowu ranked as the world’s second-largest steelmaker in 2017, according to World Steel Association data cited in the report.

Section 301 Notice

The United States Trade Representative released a notice Friday that it would release a notice on the Federal Register related to an extension for the time Chinese goods have to enter the U.S. before they are subject to a tariff rate increase (from 10% to 25%).

“Covered products that were exported from China to the United States prior to May 10, 2019 will remain subject to an additional 10 percent tariff if they enter into the U.S. before June 15, 2019, the USTR said in the release. “Originally, the deadline to enter the U.S. before the goods would be subject to an additional 25 percent tariff was June 1, 2019.

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

“This limited extension will further account for customs enforcement factors and the transit time between China and the United States by sea.”

Pavel Ignatov/Adobe Stock

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.

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

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.

Want to see an Aluminum Price forecast? Take a free trial!

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.

buhanovskiy/AdobeStock

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.

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

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.

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

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:

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

• 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.

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

Zerophoto/Adobe Stock

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%.

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

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.

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

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.