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This week’s coverage included coverage ranging from the announced update to SIMA, iron ore price movements and the U.S.’s decision to rescind the recently reimposed 10% Canadian aluminum tariff.

Before we head into the weekend, let’s take a look back at the week that was and all the metals storylines here on MetalMiner.

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Week in Review, Sept. 14-18 (SIMA, steel prices and more)

• The Department of Commerce will release an updated, modernized Steel Import Monitoring and Analysis (SIMA) system.
• MetalMiner’s Stuart Burns on the Tata Group’s struggles in the U.K. and talks over a potential bailout.
• Maria Rosa Gobitz on the last month in aluminum market movements.
• Supply fears and strong Chinese demand have supported the copper price.
• The U.S. steel sector’s capacity utilization rose to 65.1% last week.
• The Renminbi has gained strength against the U.S. dollar.
• China is looking to strengthen its cobalt stockpile.
• U.S. steel prices ticked upward this past month.
• Just over a month after reimposing it, the U.S. this week removed the 10% tariff on some non-alloyed, unwrought Canadian aluminum.
• The silver price posted gains this summer but started to flatten out in the second half of August.
• Stainless steel surcharges moved up for the fourth month in a row.
• The United States International Trade Commission opted to maintain existing duties on steel rebar imported from Mexico and Turkey.
• The iron ore price has skyrocketed this year, but its ascent has slowed of late.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

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This morning in metals news: the USITC voted to maintain existing duties on steel rebar from Mexico and Turkey; the U.S. Census Bureau released the latest housing starts data; and General Motors released more information on its next-generation electric vehicle models.

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USITC maintains rebar duties on Mexico, Turkey

The United States International Trade Commission this week voted to maintain existing anti-dumping and countervailing duties on steel rebar from Mexico and Turkey.

In its five-year sunset review, the USITC determined revoking the duties would likely lead to material injury “within a reasonably foreseeable time.”

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This morning in metals news: the United States Trade Representative announced it would remove the 10% tariff on some Canadian aluminum products; China’s steel producers foresee growing demand throughout the remainder of the year; and iron ore prices are surging.

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

USTR reverses course on Canadian aluminum tariff

Add yet another twist to the story of the U.S.’s 10% tariff on Canadian aluminum.

After reimposing the 10% tariff on some Canadian aluminum in early August, the United States Trade Representative announced Tuesday it is once again removing the tariff.

The U.S. originally imposed the tariff via Section 232 in early 2018, albeit initially exempting Canada (and Mexico). However, after the initial exemption period expired, the U.S. began slapping the tariff on imports from Canada.

In May 2019, the U.S. rescinded the tariff as part of ongoing negotiations over the successor to NAFTA. That agreement eventually came to be the United States-Mexico-Canada Agreement (USMCA), which went into effect July 1.

Last month, the U.S. announced it would reimpose the 10% tariff on unwrought, non-alloyed Canadian aluminum — or P1020. The administration cited a rise in imports when announcing the reimposition.

“After consultations with the Canadian government, the United States has determined that trade in non-alloyed, unwrought aluminum is likely to normalize in the last four months of 2020, with imports declining sharply from the surges experienced earlier in the year,” the USTR said in a release Tuesday. “Average monthly imports are expected to decline 50 percent from the monthly average in the period of January through July.”

The U.S.’s Aluminum Association applauded the reversal.

“Removing these disruptive and unnecessary tariffs on Canadian aluminum was the right decision for the U.S. aluminum industry and its 162,000 workers,” said Tom Dobbins, Aluminum Association CEO and president. “The Aluminum Association and its members support tariff and quota free trade within North America consistent with the recently implemented U.S.-Mexico-Canada Agreement (USMCA).”

Read more

gui yong nian/Adobe Stock

This morning in metals news: U.S. steel capacity utilization reached 65.1% for the week ending Sept. 12, the World Trade Organization released a report covering the U.S.’s Section 301 tariffs on Chinese goods; and the copper price approached a two-year high.

Does your company have an aluminum buying strategy based on current steel price trends?

U.S. steel capacity utilization rises to 65.1%

The U.S. steel sector’s capacity utilization rate reached 65.1% for the week ending Sept. 12, the American Iron and Steel Institute (AISI) reported.

Production during the week totaled 1.46 million net tons, down 19% year over year but up 2.2% from the previous week. Capacity utilization for the week ending Sept. 5 reached 63.7%.

However, production for the same week in 2019 reached 1.80 million net tons.

WTO releases report on U.S.’s China tariffs

The WTO this week released a report of its findings related to the U.S.’s Section 301 tariffs on Chinese goods, which amounted to hundreds of billions of dollars.

The report comes more than two years after China requested consultations — in April 2018 — related to the U.S. tariffs.

Read more

The U.S. Department of Commerce. qingwa/Adobe Stock

This morning in metals news: the Department of Commerce on Friday announced the rollout of an updated Steel Import Monitoring and Analysis (SIMA) system; Rio Tinto’s chief executive will step down; and, lastly, China’s steel exports are facing a growing number of anti-dumping probes.

Do you know the five best practices of sourcing metals including aluminum?

DOC to release updated Steel Import Monitoring and Analysis System

On Friday, the DOC announced the adoption of a rule to modernize its system for the monitoring of steel imports (SIMA).

The DOC will release the updated platform Oct. 13, 2020.

According to a DOC statement, the regulatory changes adopted by the final rule will:

1. “require steel import license applicants to identify not only the country of origin, but also the country where steel used in the manufacture of the imported product was melted and poured, as defined in the final rule”
2. “expand the scope of steel products subject to the import licensing requirement to include all products subject to Section 232 tariffs”
3. “extend the SIMA system indefinitely”
4. “codify the existing low-value license requirement for certain steel entries up to $5,000. Commerce received public comments on these regulatory changes, as published in a March 2020 proposed rule”

Executive shakeup at Rio Tinto

The fallout from Rio Tinto’s destruction of Juukan Gorge in May 2020 finally reached the executive level late last week.

The miner’s operations led to the destruction of rockshelters at Juukan Gorge, including two Aboriginal caves considered sacred. The destruction of the area was part of a mine expansion project.

As a result, CEO J-S Jacques will step down. Jacques will remain in the role until March 31, 2021, or until Rio Tinto finds a successor (whichever is earlier). Jacques has occupied the position since 2016.

“What happened at Juukan was wrong and we are determined to ensure that the destruction of a heritage site of such exceptional archaeological and cultural significance never occurs again at a Rio Tinto operation,” Rio Tinto chairman Simon Thompson said. “We are also determined to regain the trust of the Puutu Kunti Kurrama and Pinikura people and other Traditional Owners.”

Furthermore, Chris Salisbury will step down as chief executive of Rio’s iron ore division. In addition, Simone Niven will step down as group executive for corporate relations.

“We have listened to our stakeholders’ concerns that a lack of individual accountability undermines the Group’s ability to rebuild that trust and to move forward to implement the changes identified in the Board Review,” Thompson continued.

Countries take aim at Chinese steel exports

China’s steel exports are facing a rising number of anti-dumping inquiries around the world, the South China Morning Post reported.

There were 15 new anti-dumping investigations related to Chinese steel during the first nine months of 2020. Meanwhile, there were 13 such investigations in 2019.

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This morning in metals news: India is looking to curb its imports of copper and aluminum; Rio Tinto and Turquoise Hill reached a financing agreement for the Oyu Tolgoi underground mine project; and Germany’s steel industry needs state aid.

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India targets copper, aluminum imports

India is looking to curb its imports of copper and aluminum, Reuters reported.

Per the report, India is particularly targeting imports from China and other Asian countries. Among the proposed measures is a requirement for importers to register with the government.

Rio Tinto, Turquoise Hill reach financing deal

Miner Rio Tinto and Turquoise Hill have reached a financing deal toward the completion of the Oyu Tolgoi underground mine in Mongolia.

“The MOU agreed today with TRQ provides a clear funding pathway for the completion of the Oyu Tolgoi Underground Project,” said Arnaud Soirat, Rio Tinto’s chief executive of copper and diamonds. “We will continue working with TRQ and the Government of Mongolia to progress the underground project, which has the potential to unlock the most valuable part of the mine for the benefit of all stakeholders.”

Rio Tinto has a 50.8% stake in Turquoise Hill.

With the current development schedule, Turquoise Hill expects the massive copper-gold mine will be the world’s third-largest copper producer at peak metal production in 2025.

IG Metall head says German steelmakers need state aid

2020 has been a difficult year for Europe’s steelmakers.

Already battling imports, European steelmakers have struggled on the heels of the coronavirus pandemic and its resulting impact on demand.

In Germany, IG Metall head Joerg Hofmann said the country’s steelmakers need state aid, Reuters reported. In addition, German steelmakers need to form alliances in order the facilitate the transition to greener fuels for blast furnaces, Hofmann argued.

Are you prepared for your annual steel contract negotiations? Be sure to check out our five best practices. 

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This morning in metals news: the U.S.’s levels of exports and imports were approximately equal in May, according to the Energy Information Administration; Vale offered an update on emergency protocols at two of its dikes; and the U.S. has seen elevated levels of imports of standard pipe and tin plate in recent months.

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Energy exports, imports even in May

Per the Energy Information Administration, the U.S.’s energy exports and imports came in approximately even in May.

“The United States had been a net exporter of energy in several months of the past year,” the EIA reported. “Changes in domestic production and declines in global demand for energy since mid-March in response to COVID-19 have shifted energy trade balances back in the direction of net imports, especially for U.S. crude oil and petroleum products.”

Vale updates on Paracatu, Patrimônio dikes

Brazilian miner Vale offered updates on ongoing emergency protocols related to two of its dikes.

The Paracatu and Patrimônio dikes, it reported, both received negative Stability Condition Declarations.

Furthermore, Vale reported negative declarations for four other sites.

Standard pipe from Thailand up 378%

According to steel import trends reported by the Steel Import Monitoring and Analysis system, U.S. imports of several steel products have surged over the May-July 2020 period.

Imports of standard pipe from Thailand, for example, jumped 378% during the May-July period compared with the August 2019-April 2020 period.

In addition, tin plate imports from China jumped 365%.

Does your company have a steel buying strategy based on current steel price trends?

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This morning in metals news: MetalMiner’s September Monthly Metal Outlook (MMO) is now available; a Peruvian official says copper mining in the country has recovered after disruptions related to the COVID-19 pandemic; Finnish stainless steel producer Outokumpu announced a leadership change; and the U.S. Department of Commerce recently issued an affirmative final determination in a countervailing duty investigation covering steel cylinders from China.

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September MMO now available

It is a crucial time of the year for metals buyers who are busy setting their short-, medium- and longer-term spend strategies.

Buyers should make sure to equip themselves with the knowledge to source smartly in what has been a volatile year.

In that vein, the MetalMiner Monthly Metal Outlook (MMO) report for the month of September is now available. Readers will find news, analysis and much more covering copper, aluminum, nickel, tin, lead, zinc, HRC, CRC, HDG and plate.

Don’t miss out on the MMO report’s invaluable insights — learn more today.

Reuters: Peruvian government official says mining has almost completely recovered

Despite disruptions this year related to the global pandemic, the mining sector has almost completely recovered in Peru, a government official said, according to Reuters.

Peru is the No. 2 copper producer in the world.

“In Peru, stoppages resulting from the COVID-19 pandemic, combined with operational issues/adverse weather that affected a few major mines, led to a 23% decline in mine output over the first five months, with April and May registering declines of 33% and 41%, respectively,” the International Copper Study Group recently reported.

Leadership change at Outokumpu

Outokumpu, Europe’s largest stainless steel producer, announced the departure of its executive vice president for communications, marketing and investor relations, Reeta Kaukiainen.

Kaukiainen will continue in the role through the end of September, the firm said in a release.

DOC makes preliminary determination on steel cylinder imports

The Department of Commerce last week announced an affirmative preliminary determination in its countervailing duty probe related to imports of non-refillable steel cylinders from China.

The DOC calculated subsidy rates for Chinese exporters ranging from 22.97-190.67%.

Imports of the cylinders were valued at $71.8 million in 2019.

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This morning in metals news: President Donald Trump this Monday took aim at steel imports from Mexico and Brazil; the American Iron and Steel Institute responded to the development; and copper price surged to a two-year high.

5 Mistakes Buyers Can Make When Sourcing Steel. 

Trump targets steel from Brazil, Mexico

The Trump administration took aim at steel imports from Brazil and Mexico on Monday.

For the former, U.S. has opted to cut Brazil’s semi-finished steel quota for the remainder of the year.

“In light of recent deterioration in market conditions brought on by the COVID-19 pandemic affecting domestic steel producers, the United States has deemed it necessary to reduce the remaining quota for Brazilian semi-finished steel products for the remainder of 2020 to 60,000 metric tons, down from 350,000, but will maintain existing quotas for other steel products,” the United States Trade Representative said in a release.

Meanwhile, consultations with Mexico will lead to increased supervision of its export levels of certain products. Mexico will institute a monitoring system to track export levels for standard pipe, mechanical tubing and semi-finished products, the USTR said.

AISI responds

Kevin Dempsey, interim president and CEO of AISI, issued a statement in response to the Trump administration’s moves vis-a-vis Mexican and Brazilian steel.

“While we are seeing some modest recent improvement in market conditions, the industry continues to face significant challenges due to the sharp drop in demand this year as a result of the pandemic,” Dempsey said. “So far in 2020, raw steel production is down 20 percent compared to the same period last year and steelmaking capacity utilization has only averaged approximately 66 percent this year so far, compared to nearly 81 percent during the same period last year.  These difficult conditions make the industry even more vulnerable to surges in imports.”

Copper price hits two-year high

Elsewhere, the copper price surged to a two-year high Tuesday, Reuters reported.

LME copper rose 1.5% to $6,770/mt after earlier reaching $6,830/mt — the highest since June 2018, per the report.

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

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This morning in metals news: iron ore prices continue to rise; the United States International Trade Commission (USITC) voted to continue investigations related to imports of seamless standard, line and pressure pipe; and Rio Tinto’s Kennecott mine is the first to receive the Copper Mark award.

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Iron ore on the rise

On the back of recovering Chinese demand, the price of the steelmaking raw material iron ore has surged to a six-year high, Yahoo Finance reported.

Per the report, iron ore has gained 34% in the year to date. Furthermore, the iron ore price moved above $125 per ton for the first time since 2014.

USITC continues pipe investigations

The USITC recently voted to continue investigations into imports of seamless standard, line and pressure pipe.

“The United States International Trade Commission (USITC) today determined that there is a reasonable indication that a U.S. industry is materially injured by reason of imports of seamless standard, line, and pressure pipe from Czechia, Korea, Russia, and Ukraine that are allegedly sold in the United States at less than fair value and subsidized by the governments of Korea and Russia,” the USITC said in a prepared statement.

Rio Tinto mine wins Copper Mark distinction

Rio Tinto’s Kennecott mine is the first to win the Copper Mark award, created to honor responsible production.

Kennecott has demonstrated it meets “over 30 criteria for responsible environmental, social and governance practices,” Rio Tinto said.

“The Copper Mark is the first and only programme for responsible production in the copper industry,” the firm added. “Originally developed by the International Copper Association with input from a broad range of stakeholders including customers, NGOs and producers, the Copper Mark is now an independent entity with a multi-stakeholder council.”