Articles in Category: Global Trade

This morning in metals news: US steel capacity utilization picked up to 78.7% last week; the US Census Bureau reported US goods and services trade figures for March; and Ford released its April sales totals.

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US steel capacity utilization reaches 78.7%

steel arrow up

Pavel Ignatov/Adobe Stock

US steel capacity utilization for the week ending May 1 reached 78.7%, the American Iron and Steel Institute reported.

The rate increased from 78.4% the week before and from 55.2% during the same week in 2020.

Output last week totaled 1,788,000 net tons, or up 44.4% year over year.

US goods and services deficit rises

The US goods and services trade deficit picked up by $3.9 billion in March from the previous month, reaching $74.4 billion.

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Ford logo

Tobias Arhelger/Adobe Stock

This morning in metals news: Ford Motor Co. announced its new global battery center called Ford Ion Park; meanwhile, OPEC nations met via teleconference on Tuesday; and, lastly, the US goods trade deficit rose by 4% in March.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Ford aims to accelerate battery R&D with Ford Ion Park

On Tuesday, automaker Ford announced a new global battery center dedicated to battery research and development.

“Ford Ion Park will use state-of-the-art equipment to pilot new manufacturing techniques that will allow Ford to quickly scale breakthrough battery cell designs with novel materials once the company vertically integrates battery cells and batteries,” Ford said in a release.

Ford Ion Park is located in southeast Michigan, where a team has already been working. The facility includes a $185 million collaborate learning lab, which will open late next year, Ford said. Work at the lab will include developing, testing and building vehicle battery cells and cell arrays.

The move is illustrative of increasing competitiveness in the electric vehicle space. Legacy automakers, like Ford, are pouring significant resources into electrification and closing the gap with Tesla. General Motors, for example, has said it plans to offer 30 new electric vehicle models by 2025.

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Suez Canal

MenaraGrafis/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, including the Suez Canal blockage, the April 2021 MMO, Western European hot rolled coil prices and much more:

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Week of March 29-April 2 (Suez Canal retrospective, HRC in Western Europe, April MMO report and more)

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The weeklong blockage of the Suez Canal — coming as it does on top of a year of escalating ocean freight rates for the Asia-European trade, port congestion in both regions and shipping delays — has inevitably prompted debate about alternatives.

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Suez Canal, then and now

Suez Canal

MenaraGrafis/Adobe Stock

Not that you would imagine there were many other options. The Suez Canal was first dug in the late 1860s. The canal officially opened Nov. 17, 1869, at huge expense and effort. Because the alternative route around the Horn of Africa took so much longer, the canal was, in today’s parlance, a no-brainer.

Nevertheless, some vessels — those approaching the back of a very long queue in the Indian Ocean at the weekend — did set off south around Africa. However, they will probably add some two weeks to their voyage in the process. That means emissions of thousands of tons of CO2 and the cost of thousands of tons of bunker fuel.

But, like taking a detour to avoid a traffic jam, you at least feel like you are moving, even if you have to detour five times the distance.

Shipping alternatives

The alternatives, though, sound at first sight even more outlandish.

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Before we head into the weekend, let’s take a look back at the week that was and the metals storylines here on MetalMiner, including coverage of the semiconductor shortage, the Midwest Premium and more.

A fire at a Japanese chip-making plant last week has slammed automotive operations. General Motors, Ford and many other automakers have announced idling of production as a result of the shortage.

Meanwhile, on the supply side, Intel announced plans to invest $20 billion to build two new Arizona plants. Furthermore, Intel said it aims to “serve the incredible global demand for semiconductor manufacturing.”

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Week of March 22-26 (semiconductor shortage, Midwest Premium and more)

semiconductor and automobile

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This morning in metals news: Ford Motor Co. will idle production of its F-150 truck at its Dearborn plant until Sunday; the blockage of the Suez Canal by container vessel Ever Given is having a massive impact on global trade; and, lastly, the UK government is looking at all options to prevent the collapse of Liberty Steel. 

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Ford to temporarily idle F-150 plant

Ford logo

Tobias Arhelger/Adobe Stock

Ford Motor Co. yesterday said it will idle production of the F-150 at its plant in Dearborn, Michigan, through Sunday, Reuters reported.

The move is yet another idling stemming from the global semiconductor shortage. The shortage has been exacerbated by a fire that damaged a major chip-producing plant in Japan last week.

Intel announced plans to invest $20 billion to build two new factories for the manufacture of chips.

Suez Canal blockage continues

The blockage of the Suez Canal by massive container vessel Ever Given this week is exerting a widespread impact on global commerce.

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Tangshan steel plant

junrong/Adobe Stock

The recent curbs on steel making by the local government in one of China’s largest steel-producing cities, Tangshan, may have a cascading effect on steel procurement & demand, as well on iron ore supplies, some experts believe.

The Tangshan restrictions are in effect from March 20 to Dec. 31, 2021. Among other things, the restrictions penalize steel mills there that fail to meet emission control regulations.

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Tangshan part of countrywide effort

The curbs are in line with China’s fresh efforts to cut emissions meet carbon-neutrality targets. China aims to reach carbon neutrality by 2060.

Already, iron ore prices felt effects from the restrictions. Meanwhile, the long-term effect on the import-export of steel from China remains to be seen.

Daily iron ore consumption in Tangshan is also likely to drop drastically. The restrictions had led to the drop in iron ore futures but boosted hot-rolled coil (HRC) futures.

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construction site

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This morning in metals news: the US Chamber of Commerce’s Commercial Construction Index revealed some optimism among contractors; meanwhile, the Senate confirmed Katherine Tai as the next United States Trade Representative; and, lastly, the nickel price has appeared to stabilize after a sharp drop.

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US Chamber of Commerce’s Commercial Construction Index

The US Chamber of Commerce’s Commercial Construction Index reveals optimism among contractors in the US.

The data reveal contractors are growing more optimistic, “mostly driven by a rise in revenue expectations.”

Furthermore, this quarter, 36% of contractors said they expect their revenues to increase over the next year. That percentage is up from 25% the previous quarter.

“As vaccines continue to roll out, contractors are expecting to hire more workers and anticipating good times ahead. The industry still has a way to go to return to pre-pandemic levels, but rising optimism in the commercial construction industry is a positive sign for the broader economy,” said Neil Bradley, U.S. Chamber of Commerce executive vice president and chief policy officer. “However, finding skilled workers was a critical issue before the pandemic, and while it has remained a chronic problem over the last year, heightened concern may be emerging again as contractors look to hire.”

Senate confirms Tai as USTR

The Senate on Wednesday voted to confirm Katherine Tai as the next top trade official, succeeding the Trump administration’s Robert Lighthizer.

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tariffs headline over $100 bills

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Despite howls of protest from consumers, the Biden administration has doubled down on the Trump administration’s trade barriers with its latest move on aluminum tariffs.

The administration recently slapped semi-finished flat rolled aluminium anti-dumping duties on 18 countries supplying the US market.

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Aluminum tariffs

Previous administrations’ focus on China — first on extrusions in 2011 and then foil and sheet in 2018 — succeeded in bringing down imports from 620,000 metric tons in 2017 to 170,000 tons last year, Reuters reported.

However, the wider Section 232 10% tariff is so riddled with exclusions and special exemptions that imports from the rest of the world have continued to make up a significant proportion of the market supply landscape.

Imports of sheet, plate and strip totaled 1.3 million metric tons in 2019. That represented about 62% of total aluminum product imports that year, according to Reuters. Although volumes shrunk sharply to 836,000 tons last year, this was due to the broader COVID-19 disruption to the U.S. manufacturing sector.

Total semis imports last year fell by 20%. Domestic shipments dropped by only 13% through November, suggesting the imposition of preliminary duties in October was already impacting buyers’ decisions.

According to Reuters, the new duties hit seven of last year’s top 10 product suppliers to the U.S. market, including South Korea, Germany and Turkey.

Canada, Saudi Arabia avoid aluminum tariff

The duties spared Canada, however, from which imports increased by 17%. They also spared Saudi Arabia, where Alcoa retains a close relationship with the Ma’aden smelter and rolling mill, despite having divested its 25.1% shareholding in 2019.

That Alcoa and its Saudi partner should essentially get an exemption comes as no surprise.

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judge's gavel

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This morning in metals news: the US Court of International Trade rejected a tariff exclusion process challenge; meanwhile, a metals trader ordered 10,000 tons of copper blister and got something else; and, finally, aluminum is gaining popularity as a material for outdoor living products.

Grab your coffee and hear MetalMiner’s latest forecast for aluminum, copper, stainless and carbon steel. The webinar is on Wednesday, March 24, at 10 a.m. CDT: https://zoom.us/webinar/register/WN_6J8wAyYySfihVk3ZUH9yMA.

US Court of International Trade rules on Section 232 tariff exclusion process

Michigan-based metals supplier Thyssenkrupp Materials NA, Inc., challenged the Section 232 tariff exclusion process, arguing it leads to “exclusions on an application basis to specific requestors and not automatically to all importers of a particular article, creates a non-uniform tax across the United States in violation of the Uniformity Clause of the Constitution.”

Former President Donald Trump used Section 232 of the Trade Expansion Act of 1962 to impose tariffs in 2018. Trump imposed tariffs of 10% on imported aluminum and 25% on imported steel.

In addition, US importers could apply for exclusions to the tariffs through the Department of Commerce.

Thyssenkrupp Materials NA asked for two forms of relief. They asked for refunds on duties already paid, plus interest, for any good that any requestor has received an exclusion. Furthermore, the importer asked for an injunction preventing Customs and Border Protection from collecting duties on any product that has been granted an exclusion by any requestor.

The government, meanwhile, argued the importer did not make a claim for an exclusion that had been denied. As a result, it argued the importer had not received injury from the process.

The three-judge panel sided with the government in the case.

“Because the exclusion process promulgated by Commerce does not violate the Uniformity Clause of the Constitution and does not reflect an improper construction of the President’s Proclamations, the Government’s motion to dismiss is granted,” the judges concluded.

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