Articles in Category: Global Trade

judge's gavel

beeboys/Adobe Stock

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.

Read more

China story steel production

Zhao Jiankang/AdobeStock

This morning in metals news: MetalMiner’s March update to its Annual Outlook report is now available to subscribers; US steel capacity utilization reached 77.4% last week; and the United States Trade Representative announced the conclusion of WTO quota negotiations with the European Union.

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

March 2021 Annual Outlook update now available

In September, MetalMiner released its Annual Outlook forecast report, which takes detailed looks at 10 key metals and their price drivers, in addition to macroeconomic factors shaping commodities markets.

MetalMiner updates that outlook throughout the year, with the most recent update becoming available this week.

Only subscribers have access to the Annual Outlook report. For more information about the report, visit the Annual Outlook landing page.

Steel capacity reaches 77.4%

US steel capacity utilization reached 77.4% for the week ending March 6, the American Iron and Steel Institute (AISI) reported.

The rate increased from 77.2% the previous week. Furthermore, the rate for the same week in 2020 reached 76.2%.

Output last week reached 1.76 million net tons, or down 0.3% year over year but up 0.3% from the previous week.

Read more

hot rolled steel

niteenrk/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, which this week includes coverage of steel capacity utilization, the latest OPEC ministerial meeting and much more.

Overall, most base metals seem to be retracing from a late February peak. LME copper and aluminum have both been declining since late February.

The tin price’s dive has been more stark. LME three-month tin has dropped over 13% since Feb. 25. However, in the long term, the outlook for tin remains promising, particularly given its application in electronics.

The MetalMiner team will be presenting a commodity forecast for copper, aluminum, stainless and carbon steel on Wednesday, March 24, at 10:00 a.m. CDT: https://zoom.us/webinar/register/WN_6J8wAyYySfihVk3ZUH9yMA. 

Week of March 1-5 (steel capacity, oil prices and more)

Find more insight on MetalMiner’s LinkedIn.

Japan map

yukipon00/Adobe Stock

Japan’s steel sector is facing tumultuous times.

But, in the short term, there are initial signs of it pulling through in 2021.

Are you on the hook for communicating the company’s steel performance to the executive team? See what should be in that report

Pandemic impacts on Japan’s steel sector

The COVID-19 pandemic contributed to the weakening of domestic needs. Furthermore, tepid global demand, cheaper exports by China and an ambitious net-zero emission target to develop cleaner steel have all come together to negatively affect the country’s steel sector.

According to an S&P Global Platts report, Japan’s iron and steel product exports fell 4.9% year over year to 32.14 million metric tons (MT) in 2020.

Quoting from data from the Japan Iron & Steel Federation, the report noted total exports to the US fell 30.5% year over year to 890,000 MT. That marked the fourth straight year of decline since reaching 2.06 million MT in 2016.

A slight recovery in December saw exports rise by 5% from November to 2.56 million MT. Hot-rolled wide strip steel accounted for the bulk of the ordinary steel products exported.

In fact, for the first time since 2009, as the S&P Global Platts report noted, Japan’s crude steel production fell below the 100 million MT mark.

Production fell 16.2% year over year to 83.19 million MT in 2020, according to the World Steel Association.

The country’s crude steel output fell 3.9% in January this year from a year earlier.

Read more

U.S. trade

freshidea/Adobe Stock

This morning in metals news: the US international goods trade deficit moved up slightly from December to January; meanwhile, MetalMiner sister site SpendMatters took to LinkedIn for feedback on President Joe Biden’s executive order on supply chains; and, lastly, Sweden will be home to what will reportedly be the world’s largest “green hydrogen plant.”

US trade deficit rises in January

The US trade deficit in January reached $83.7 billion, the Census Bureau reported.

The trade deficit increased from $83.2 billion in December.

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

Spend Matters analyst looks at Biden administration’s supply chain executive order

Speaking of the trade deficit and trade in general, in light of President Joe Biden signing an executive order to address US supply chain problems for semiconductor chips, large-capacity batteries for electric vehicles, rare earth minerals and pharmaceuticals, Spend Matters analyst Pierre Mitchell took to LinkedIn to get a conversation started.

“Hey, if a 78-year-old guy from Scranton gets it, maybe more C-level execs will finally now get serious about supply chain risk management,” Mitchell writes. “Actually, most do, especially after the pandemic, but it’s still depressing when so many wait until they get a major disruption. Is this finally a sea change … or ‘C-change’?”

MetalMiner’s Stuart Burns recently outlined the geopolitical chess game taking place over rare earth materials.

To be a part of the conversation, engage with Mitchell’s post on LinkedIn to voice your opinions.

World’s largest ‘green hydrogen plant’

Steelmaking is a traditionally high-polluting industry. But, slowly but surely, steelmakers around the world are touting newfound green bona fides.

CNBC reported yesterday that Sweden could soon be home to the “world’s largest green hydrogen plant.”

The firm, H2 Green Steel, will aim to provide the European market with steel made with a “fossil-free manufacturing process,” CNBC reported.

Get social with us. Follow MetalMiner on LinkedIn.

tariffs headline over $100 bills

zimmytws/Adobe Stock

Whether the new Biden administration creates a more insightful or sophisticated approach to trade remains to be seen.

But, if nothing else, a new administration is a chance for a reset on policies that have not worked as intended under a previous administration.

Aluminum tariff policy

The previous administration’s Section 232 tariffs on aluminum of 10% were well intentioned. The tariffs aimed to try to reverse the decline in US domestic aluminium smelting capacity.

In recognition of aluminum’s role in defense and aerospace applications, the government viewed the growing level of imports as a threat to national security. As such, creating a barrier to imports intended to allow US smelters to operate profitably and encouraged firms to reopen idled capacity. Furthermore, the hope was that, in time, firms would open new smelters.

The previous decade had been brutal for the US aluminium smelting industry.

By 2017, capacity utilization had fallen to 37%, according to Reuters.

Many hailed the strategy as a savior for the smelting industry. However, consumers would ultimately have to pay the bill.

Are you under pressure to generate aluminum cost savings? Make sure you are following these five best practices

Flaws in the plan

But even accepting that the COVID-19 pandemic made 2020 a far from typical year, it has become clear the tariff strategy has not worked on a number of levels.

While the inflationary cost of finished goods has been minor, the aluminum content even of a can of beer is a small fraction of the total product cost. It remains true that consumers have had to foot the bill.

It was always the intention that domestic producers would raise their prices to the import plus tariff price. The corresponding uplift was what was supposed to allow them to operate profitably again, to arrest the decline and reopen idled capacity.

Annualized production rose to 1.15 million tons at the end of 2018 from 750,000 tons a year earlier. The increase, however, proved short-lived. By the end of last year, national annualized production had fallen to 920,000 tons and capacity utilization to about 50%, Reuters reported.

Equally worrying the post states, there has been no new smelting capacity. The United States remains as dependent as ever on imports of primary metal.

Aluminum tariff and Canada

Buyers will remember the spike in prices that followed the reinstatement of tariffs on Canadian aluminium predicated on the “surge in imports,” as the Trump administration claimed at the time.

The reality was Canadian-origin metal had simply made up for the absence of Russian metal following Rusal’s pivot away from the US, largely to Asian markets, following the earlier sanctions on owner Oleg Deripaska. Russian imports collapsed from 725,000 tons in 2017 to only 136,000 tons last year. Shipments from Canada simply filled the gap, rising 10% in 2019.

The previous administration seemed to accept that imports from Canada should not be considered a strategic risk. Ultimately, it removed the tariff in September 2020.

But what of potential suppliers elsewhere? Would it not be of value to the US to widen its non-tariff supply base?

Biden rescinded permission to exempt the UAE recently for what seemed like political rather than national security reasons. China has never exported primary metal, so it remains irrelevant to this policy.

The years ahead

How the US handles imports of semi-finished products going forward will be the topic of a separate post. The US has inherited a fractious trade landscape as a result of the last few years.

It does so at a time of a fundamental re-evaluation of its trade priorities. Many would argue that re-evaluation is long overdue.

That re-evaluation includes its relationship with China. In that vein, the US is better off by working in cooperation with its allies and neighbors than the unilateral policies of the previous administration that have largely failed to deliver benefits.

Sign up today for Gunpowder, MetalMiner’s free, biweekly e-newsletter featuring news, analysis and more.

rare earths loaded on cargo ship in China

tab62/Adobe Stock

Although presented as the evil machinations of an enemy state, a recent Financial Times article lays out the rare earths dilemma China faces.

Rare earths in the crosshairs

Rare earths industry executives made unofficial statements indicating Chinese government officials had asked them how badly companies in the US and Europe, including defense contractors, would be affected if China restricted rare earth exports during a bilateral dispute.

The conversations should be seen against the backdrop of moves last month by the Ministry of Industry and Information Technology.

The ministry proposed draft controls on the production and export of 17 rare earth minerals from China. Although China doesn’t control the world supply of mined ores, it does dominate the refining into useable salts and metals, controlling about 80% of global supply.

Nonetheless, the country itself remains at risk to unstable ore supplies from countries like Myanmar. That may help explain Beijing’s tacit support for the recent military coup there.

The US even sends its ores to China for refining. That’s not because it doesn’t have the technical knowhow; the US simply lacks the facilities. Furthermore, China is more willing to tolerate the environmental damage from the dreadfully polluting refining process.

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

Rare earths supply dependence

This lack of refining capacity leaves the US and most of its Western allies horribly exposed.

Read more

US and UAE flags

Oleksii/Adobe Stock

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 the Biden administration reimposing a tariff on aluminum from the UAE, copper demand and much more.

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 Feb. 8-12 (Biden administration reinstates UAE aluminum tariff, copper demand and more)

Stop obsessing about the actual forecasted aluminum price. It’s more important to spot the trend.

import tariff

Dmitry/Adobe Stock

This morning in metals news: the Coalition of American Metal Manufacturers and Users called on the Biden administration to rescind the Section 232 steel and aluminum tariffs; meanwhile, the Energy Information Administration forecasts US energy-related CO2 emissions to rise after the mid-2030s; and, lastly, US President Joe Biden spoke this week with Chinese President Xi Jinping.

CAMMU urges Biden to ends Section 232 tariffs

The Coalition of American Metal Manufacturers and Users (CAMMU) sent President Joe Biden a letter Wednesday urging him remove the Section 232 tariffs on steel and aluminum.

In 2018, former President Donald Trump imposed the tariffs of 25% for steel and 10% for aluminum.

“By taking action to terminate the Trump tariffs, your Administration can prevent U.S. manufacturers from shutting down production lines, laying off workers, and potentially even closing their doors,” CAMMU said in the letter. “By contrast, the ripple effects of allowing these Section 232 tariffs to remain are substantial. Our member companies report not only record steel prices, but also delivery times stretching 12-16 weeks, causing significant disruptions.”

As we noted previously, however, Biden reversed Trump’s decision to rescind the tariff on aluminum from the UAE (a move he made on his final day in office).

See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your aluminum buy.

Read more

judge's gavel

beeboys/Adobe Stock

This morning in metals news: the United States Court of International Trade issued a ruling on the Section 232 steel tariff; meanwhile, the Biden administration has reversed a Trump administration decision regarding tariffs on aluminum from the United Arab Emirates; and, lastly, new orders for manufacturing goods rose for an eighth consecutive month in December.

USCIT dismisses Section 232 steel tariff challenge

In early 2018, former President Donald Trump imposed tariffs on imported steel and aluminum. Using Section 232 of the Trade Expansion Act of 1962, Trump imposed tariffs of 25% for steel and 10% for aluminum.

It is unclear if the new Biden administration will ultimately rescind the tariffs in a blanket sense (more on that shortly).

However, a trade court has shot down a legal challenge from domestic businesses.

Universal Steel Products, Inc., PSK Steel Corporation, The Jordan International Company, Dayton Parts, LLC, and Borusan Mannesman Pipe U.S. Inc. challenged the steel tariff, claiming injury from the duty.

The plaintiffs argued procedural deficiency behind the Section 232 implementation process. In addition, they claimed the president and then-Secretary of Commerce Wilbur Ross did not identify an “impending threat” when imposing the tariffs. They also claimed Trump violated provisions of Section 232 by not setting a duration for the action.

However, the three-judge panel on the United States Court of International Trade opted to dismiss the plaintiffs’ cross-motion for partial summary judgment.

“There have been proposals put forward suggesting greater Congressional oversight, including hearings, or statutory amendments which would expand Congress’s role in the implementation and review of tariffs,” Judge Gary S. Katzmann said in his opinion. “Ultimately, of course, these are policy matters that fall within the province of the legislative branch; it is not the role of the court to opine about them.”

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

Biden to reverse Trump course on UAE aluminum tariff

In other tariff news, Trump — in his final hours as president — moved to rescind the Section 232 aluminum tariff of 10% for imports from the UAE.

Read more

1 2 3 4 5 6 249