Articles in Category: Global Trade

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This morning in metals news, the U.S. and China will resume trade talks, Tokyo Steel announced its first steel price cuts in nearly three years and Rio Tinto recently celebrated the launch of its automated heavy-haul rail network.

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Trade Talks

After last month’s tariffs fireworks, President Donald Trump indicated the U.S. and China will restart trade talks before this month’s G20 summit in Japan, Reuters reported.

Talks fell apart last month after Trump raised tariffs on $200 billion in Chinese goods, to which China responded with tariffs on $60 billion in U.S. goods.

The G20 summit is scheduled for June 28-29.

Tokyo Steel Announces Price Cuts

Japanese steelmaker Tokyo Steel announced it would cut prices for its steel products in July — marking the first price cut in 33 months, Reuters reported.

According to Reuters, the steelmaker is reducing all prices of steel bars by 7.8%, down to $591 per ton.

Rio Tinto Hails Automated Rail Network

Miner Rio Tinto recently celebrated the deployment of its long-distance rail network, AutoHaul, which it calls the “world’s first automated heavy-haul long distance rail network.”

The rail network will serve to move the miner’s supplies of iron ore through Western Australia.

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“The success of AutoHaul™ would not have been possible without the expertise, collaboration and dedication of teams within Rio Tinto and our numerous partners,” said Ivan Vella, Rio Tinto’s iron ore managing director of rail, port and core services. “I’d also like to commend our train driving workforce for their support and professionalism during the transition period.

“This project has cemented Western Australia as a leader in the heavy-haul rail industry and has attracted interest from around the world. The successful deployment of the world’s first heavy-haul long distance rail network demonstrates the potential for significant further improvement in such operations with others around the world looking to replicate.”

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This morning in metals news, China’s May steel output surged, Thyssenkrupp named a new chairman of the executive board of its steel business and President Donald Trump continues to push for approval of the United States-Mexico-Canada Agreement (USMCA).

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China’s Steel Output Soars

China’s May steel output surged to a record high, Reuters reported, up to 89.09 million tons.

The May output marked an increase from the 81.13 million tons produced in May 2018.

Thyssenkrupp Names New Steel Business Chairman

On the heels of the cancelation of a proposed joint venture of the European steel operations of Thyssenkrupp and Tata Steel, the former had named a new chairman of its steel business.

The German firm announced Premal Desai will take over as chairman of the executive board of Steel Europe AG.

USMCA Update

The USMCA remains pending, as the trade agreement requires ratification by the legislatures of the U.S., Canada and Mexico.

On Thursday, President Donald Trump said approval of the deal is up to the U.S.

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Referring to Congress, Trump was quoted by Reuters as saying, “Hopefully they can act quickly because we could have that done very, very fast if we can get support from, really, the Democrats in Congress, (House Speaker) Nancy Pelosi, they have to put the bill forward.”

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This morning in metals news, ArcelorMittal’s CEO urged the E.U. to do more to combat the effects of the U.S.’s Section 232 steel tariff, April steel shipments fell 1.4% and China’s Ministry of Commerce said the U.S. is not being taken advantage of on trade.

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ArcelorMittal Urges More Action from E.U. on Steel

The E.U. imposed steel safeguards earlier this year, but ArcelorMittal CEO Lakshmi Mittal think they haven’t been enough.

The safeguards were imposed to combat rising imports into the E.U., which came about as a result of diverted supply from the U.S. (on the heels of its Section 232 tariffs on steel and aluminum).

However, Mittal told a German newspaper the safeguards haven’t been effective, Reuters reported.

U.S. Steel Shipments Fall 1.4%

U.S. steel shipments in April fell 1.4% from the previous month, according to the American Iron and Steel Institute (AISI).

April shipments reached 8.21 million net tons, down from 8.33 million net tons in March. However, shipments through the first four months of the year were up 3.5% compared with the same period last year.

MOFCOM: China Not Taking Advantage of the U.S.

A frequent talking point used by President Donald Trump is the concept that other countries are taking advantage of the U.S. when it comes to trade.

China’s Ministry of Commerce recently released a report, titled “US Gains from the China-US Trade and Economic Cooperation,” outlining the ways in which it argues the U.S. benefits from the two countries’ trade relationship.

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“The trade deficit with China results from both artificially-imposed restrictions, such as export control, and market forces,” the Ministry of Commerce said in a release. “Multiple factors are at play, including industrial competitiveness, economic structure, trade policies, the position of the US dollar as reserve currency, etc. The US has not been taken advantage of.”

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This morning in metals, the London Metal Exchange announced a new partnership that aims to promote “market uptake of a transparent and representative global lithium price,” President Donald Trump backs off imposing a 5% tariff on all imports from Mexico and China’s May copper imports dropped. 

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LME Announces New Partnership

The LME announced its latest steps toward creation of an LME lithium contract.

“Over the past 18 months the London Metal Exchange (LME) has been working closely with the global lithium industry to meet the need for transparent and robust reference prices,” an LME release stated. “Following extensive market engagement, the LME is announcing today that it is partnering with price reporting agency Fastmarkets to promote market uptake of a transparent and representative global lithium price. Continued adoption of reference pricing across the industry will pave the way for launch of a LME lithium futures contract.”

Among other uses, lithium is coveted for its use in electric vehicle batteries.

“In recent years there has been unprecedented price volatility in the lithium market, driven particularly by explosive electric vehicle (EV) battery demand,” said Robin Martin, LME head of market development.The LME has been approached by a number of industry players, including producers, end users and several leading automotive firms, to develop effective lithium price-risk management tools. We are delighted to be announcing the next step in that process today.”

No Mexico Tariffs … For Now

Late Friday, the Trump administration announced it had reached a deal with the Mexican government and, as such, the U.S. would not impose a previously mentioned 5% tariff on all imports from Mexico.

Trump said last month that the U.S. would impose an escalating tariff, beginning at 5%, as of June 10 if the two countries could not reach a deal that addressed the flow of migrants to the U.S.

However, the threat of tariffs still looms.

In a tweet Monday morning, Trump said if the immigration deal does not receive approval by Mexico’s legislature, “tariffs will be reinstated.”

China Copper Imports Down

China’s imports of unwrought copper dropped 10.9% in May from the previous month, Reuters reported.

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Among other metals, China is the world’s top consumer of copper. The country’s imports of copper reached 361,000 tons in May, according to Reuters.

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This morning in metals news, the LME copper price continued its tumble this week, U.S. imports from countries like Vietnam have increased and the June 10 Mexico tariff deadline draws near.

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Copper Down for Eighth Straight Week

The copper price is set to fall for the eighth consecutive week this week, Reuters reported.

LME copper fell 1% Friday and was down 1.4% for the week, according to Reuters.

Rising Imports

Amid ongoing trade tensions with China, the U.S. has seen import levels from other countries rise.

Citing Census Bureau data, CNN reported the U.S.’s imports from Vietnam increased 38% over the first four months of this year. Imports during that period from Taiwan (22%), South Korea (17%) and Bangladesh (13%) were also up.

Tariffs on the Horizon

Vice President Mike Pence said the U.S. is still planning to slap tariffs on imports from Mexico next week, Bloomberg reported.

President Donald Trump has threatened to impose an escalating tariff, beginning at 5%, on all imports from Mexico if the two countries can’t reach a deal to stem the flow of migrants into the U.S.

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According to Mexican Foreign Minister Marcelo Ebrard, talks to reach a deal and avoid tariffs continued Friday.

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This morning in metals news, U.S. steel import permit applications dropped last month, the Trump administration’s Section 232 aluminum tariff left its mark on operations at the Port of Oswego and the Trump administration released a new strategy that aims to ensure a reliable supply of critical minerals.

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Steel Import Permit Applications Drop in May

Steel import permit applications fell 10.8% in May compared with April, the American Iron and Steel Institute (AISI) reported.

By country, the largest finished steel import permit applications for offshore countries were: South Korea (296,000 NT, up 8% from April preliminary), Japan (123,000 NT, down 22%), Germany (77,000 NT, down 46%), Taiwan (76,000 NT, up 8%) and Vietnam (60,000 NT, down 24%).

Oswego Impact

Last month, the Trump administration lifted its Section 232 tariffs with respect to imports of steel and aluminum from Canada and Mexico — but the impact of the tariffs was still felt throughout the year since their implementation.

One such community that felt the impact was Oswego, New York, and its port, WRVO Public Media reported. According to the report, aluminum shipments into the port are down 50% this year, resulting in job cuts at the port, according to the director of the Oswego Port Authority.

Critical Minerals Strategy

This week, the Trump administration unveiled a report titled “A Federal Strategy to Ensure a Reliable Supply of Critical Minerals.

“The strategy directs the U.S. Department of the Interior (DOI) to locate domestic supplies of those minerals, ensure access to information necessary for the study and production of minerals, and expedite permitting for minerals projects,” a Department of the Interior release states.

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Last year, the DOI released a list of 35 minerals deemed critical to U.S. economy and security. According to the DOI, the U.S. relies on other counties for more than a dozen minerals, used in cellphones, automobiles, airplanes, ships and computers, the release states.

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This morning in metals news, U.S. steel executives are concerned about the impact of proposed tariffs on Mexican goods, bidders are looking at the liquidated British Steel in parts and Norsk Hydro released its Q1 2019 financial results.

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U.S. Steel Executives Express Concern About Mexico Tariffs Impact

Recently, President Donald Trump threatened to impose a 5% tariff on all goods imported from Mexico; according to Bloomberg, executives of the biggest U.S. steel companies aren’t too keen on the proposed duties, particularly as the United States-Mexico-Canada Agreement (USMCA) still hangs in the balance.

According to the report, executives from AK Steel, Nucor and Steel Dynamics spoke at an industry conference Tuesday, expressing concerns regarding the potential tariffs’ impact on the USMCA talks carrying on among the U.S., Canada and Mexico.

“Our reaction was surprise,” Nucor CEO John Ferriola was quoted by Bloomberg as saying. “We hope it does not impact the USMCA — we think that’s a good thing for the steel industry and manufacturing in general in the U.S. and the economy as a whole.”

Piece by Piece

After the U.K.’s second-largest steelmaker, British Steel, was ordered liquidated last month, the race has been on to save the company from the brink.

With a deadline fast approaching, bidders have been making offers for the firm; however, they’ve been doing so in parts.

According to Reuters, none of the bidders are interested in buying the entirety of British Steel due to the capital expenditures that would be required.

Norsk Hydro Releases Q1 Financials

The first quarter of 2019 was a challenging one for Norsk Hydro, as the firm dealt with a cyber attack and the ongoing ramifications of production curtailment at its Alunorte refinery (where it recently got the green light from Brazilian authorities to resume full production).

“I am pleased that the production embargoes at Alunorte have been lifted, so that we can focus our efforts on safely returning Alunorte, Paragominas and Albras towards normal operations,” President and CEO Hilde Merete Aasheim said in a company release. “Our Brazilian operations are a fundament for Hydro’s overall agenda and our ambition to lift profitability.”

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Hydro reported underlying earnings before financial items and tax of NOK 559 million (USD $64.0 million) in Q1 2019, down from NOK 3,147 million (USD $360.7 million) in Q1 2018, due to lower aluminum prices, higher raw material costs and the production curtailment at Alunorte.

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This morning in metals news, European steel sector leaders are asking the E.U. for action in the face of rising imports, the U.S. says China is playing the “blame game” and U.S. Commerce Secretary Wilbur Ross met with Mexico’s Secretary of Economy Graciela Márquez Colín.

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European Steel Sector Looks for Help

Amid challenging times for the European steel sector, steel chiefs there are asking the E.U. for help.

European steel sector leaders sent a letter to the E.U. asking it act, arguing the U.S.’s Section 232 steel tariff has resulted in an influx of diverted steel to the E.U., Reuters reported.

According to the steel sector leaders, E.U. steel imports have doubled since 2013.

Playing the ‘Blame Game’

The U.S. accused China of playing the so-called “blame game” in the two countries’ ongoing trade talks.

Despite auspicious signs, trade talks took a hit last month when President Donald Trump opted to raise tariffs on $200 billion in Chinese goods, after which China retaliated with tariffs on $60 billion in U.S. goods.

“The United States is disappointed that the Chinese have chosen in the ‘White Paper’ issued yesterday and recent public statements to pursue a blame game misrepresenting the nature and history of trade negotiations between the two countries,” the Office of the United States Trade Representative said in a release. “To understand where the parties are and where they can go, it is necessary to understand the history that has led to the current impasse.”

Another Front

Elsewhere, President Donald Trump recently threatened to impose an escalating tariff on all Mexican goods, beginning at 5%.

U.S. Commerce Secretary Wilbur Ross met with Mexico’s Economy Secretary Graciela Márquez Colín to discuss the issue.

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“Today, I met with Mexico’s Minister of Economy, Graciela Marquez, to discuss bilateral trade and United States’ upcoming plan to tariff Mexican goods at 5%,” Ross said in a release. “We also discussed next steps for the U.S.-Mexico-Canada Agreement. I reiterated the President’s message that Mexico needs to do more to help the U.S. address immigration across our shared border.”

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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.

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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.

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

Norsk Hydro’s Alunorte refinery. Source: Norsk Hydro

Before we head into the weekend, let’s take a look at the week that was and some of the metals storylines here on MetalMiner:

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