Articles in Category: Imports

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This morning in metals news, China spared U.S. soybeans and pork imports from tariffs, copper prices gained on the current tenor of trade news and Chinese iron ore rose to a five-week high.

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China Exempts Pork, Soybeans from Tariffs

China announced it will exempt imports of U.S. soybeans and pork from tariffs, MarketWatch reported, as the two countries aim to move toward a resolution to their long-simmering trade differences.

Trade talks between the countries are scheduled to resume in early October.

Copper Prices Rise

Copper prices made gains to close the week amid the latest seemingly positive news coming out of the ongoing U.S.-China trade saga.

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LME three-month copper was bid up 1.1% on Friday, reaching $5,895 per ton, Reuters reported.

Iron Ore Rises to 5-Week High

Chinese iron ore prices surged to a five-week high, the Hellenic Shipping News reported, supported by restocking demand ahead of holidays in the country.

Iron ore futures on the Dalian Commodity Exchange rose as much as 3.9% on Thursday, up to 681 yuan ($96.08) per ton, according to the report.

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This morning in metals news, China’s trade activity with respect to aluminum and copper slowed in August, Nucor announced Chairman and CEO John Ferriola will be retiring at the end of the calendar year and residents of an Arizona town expressed staunch opposition to a proposed aluminum recycling plant.

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China’s Aluminum Exports, Copper Imports Fall

China’s imports of copper and exports of aluminum fell in August as the trade war with the U.S. escalated with the most recent exchange of tariffs.

China’s copper imports fell 3.8% in August compared with the previous month, Reuters reported, while aluminum exports fell 4.3% compared with July totals.

Nucor CEO to Retire

Nucor Chairman and CEO John Ferriola will retire at the end of this year, the company reported.

Ferriola has served as chairman since 2014 and CEO since 2013.

Nucor’s Board of Directors elected Leon J. Topalian, 51, to be president and chief operating officer, effective Sept. 5, 2019. Topalian will succeed Ferriola as CEO on Jan. 1, 2020.

Residents Oppose Proposed Arizona Aluminum Recycling Plant

Locals in the Arizona farming town of Wenden have come out in opposition to an aluminum recycling plant proposed for the town, azcentral.com reported.

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According to the report, residents urged officials from the Arizona Department of Environmental Quality not to grant an air-quality permit for the proposed Alliance Metals plant.

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

This morning in metals news, the U.S. Department of Commerce issued affirmative determinations in its anti-dumping investigation of fabricated structural steel imports, Turkey’s largest industrial group will halt steel production and a U.S. Department of Justice lawsuit poses a roadblock for Novelis‘ bid to buy Aleris.

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U.S. DOC Rules on Fabricated Structural Steel Imports

The Department of Commerce has made affirmative preliminary determinations in its anti-dumping probe of imports of fabricated structural steel from Mexico and China.

The DOC found dumping margins for China and Mexico ranging from 0.00% to 141.38% and 0.00% to 30.58%, respectively.

Meanwhile, the DOC issued a negative determination with respect to imports from Canada.

Turkey’s Largest Industrial Group to Pause Steel Production

According to a report by Ahval, Turkey’s largest industrial group plans to halt steel production due to challenging market conditions.

According to the report, Koç Holding’s Koç Çelik unit will halt production from September until the end of January.

Novelis-Aleris Deal

Novelis‘ planned purchase of Aleris is under scrutiny.

The U.S. Department of Justice filed a lawsuit to prevent the move, citing concerns over potentially higher prices for automotive aluminum sheet.

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The $2.6 billion purchase was initially announced in July 2018.

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

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The Canadian government recently announced policy and regulation changes that it argues “will help improve Canada’s trade remedy system for all sectors.”

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Earlier this month, Canada announced changes to its anti-dumping policy, in addition to the establishment of a new aluminum import monitoring and a pledge to strengthen its existing steel import monitoring system.

“Amendments are being made to the Special Import Measures Regulations to ensure that an appropriate level of anti-dumping duties can be applied to goods that are dumped into Canada,” the Department of Finance said in a release.

“This will provide greater flexibility to the Canada Border Services Agency (CBSA) to address situations where there may be distortions in the price of the goods in the country of export. It clarifies alternative methods to calculate the costs of production of the imported goods, in cases where the price of inputs is distorted because of purchases made between affiliated companies or because of a particular market situation.”

Anti-dumping policy changes will also help the CBSA in its attempts to determine whether a product has been dumped.

“This will make it easier for the CBSA to compare the price of the goods imported into Canada with the price of the goods sold by the same exporter to a different country, to find whether there is dumping,” the Department of Finance said. “Changes will also allow the CBSA to better identify dumping that occurs in targeted patterns and is hidden by high prices.”

In addition, as of Sept. 1, 2019, certain aluminum products will be added to the Import Control List.

“Aluminum importers will be required to cite the GIP on CBSA import declarations in order to import the products into Canada,” the Department of Finance continued. “As a direct result of these changes, the industry and the Government will have access to more timely aluminum import data—making it easier to quickly identify whether global oversupply of aluminum is making its way to Canada.”

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Meanwhile, the Aluminum Association in the U.S. applauded the Canadian government’s announced reforms.

“Strong trade enforcement is absolutely essential to a fair, rules-based global trading system,” said Lauren Wilk, the Aluminum Association’s vice president for policy. “Including aluminum products in Canada’s import monitoring system will help government officials and the industry to identify trends in trade flows and address aluminum misclassification, transshipment and evasion of duties.

“The Aluminum Association has been a strong advocate for the creation of an aluminum import monitoring system in the United States to address similar issues in our country, and we look forward to working with the U.S. government to develop a program that will help ensure U.S. aluminum producers can compete on a level playing field within North America.”

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This morning in metals news, U.S. imports of steel are down 10.6% for the first seven months of the year, U.S. Steel plans to idle its East Chicago plant, and China will raise tariffs on imports of copper scrap and aluminum scrap from the U.S.

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Steel Imports Down 10.6%

U.S. imports of steel dropped 11% during the first seven months of the year compared with the first seven months of 2018, the American Iron and Steel Institute (AISI) reported.

The U.S. imported an estimated 3.03 million tons of steel in July, which marked a 48.3% increase from the previous month.

For the first seven months of the year, imports totaled 18.67 million tons, down 10.6% from import levels for the first seven months of 2018.

U.S. Steel to Idle East Chicago Plant

U.S. Steel announced it will idle its East Chicago plant by mid-November, CNBC reported, which could lead to 150 layoffs.

Shares of U.S. Steel fell 5.3% on Friday, according to the report.

China to Raise Tariffs on Copper, Aluminum Scrap

As trade tensions between the U.S. and China drag on with no apparent end in sight, China announced it will raise its tariffs on imports of U.S. copper scrap and aluminum scrap, Reuters reported.

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China will add an extra 5% to existing tariffs on the scrap metals effective Dec. 15, according to Reuters.

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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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All indicators seem to show that India may end up being a net importer of steel for the second consecutive year in fiscal year 2020, according to sector experts and ratings agencies.

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The reasons underpinning this development are many.

In a desperate attempt to quell the import tide, the Indian government is said to be actively looking at imposing even more safeguard duties on steel imports. These are reported to be at an advanced stage at India’s Directorate General of Trade Remedies (DGTR), the government body in charge of recommending safeguard duties. In addition, the government is being pressured by the Indian steel lobby (which is led by the large representative body of steel companies, the Indian Steel Association).

The first signs of India continuing to be a net importer this year, too, came from figures out for the April-July period of this fiscal year.

A report by CARE Ratings showed the imports of finished steel products exceeded exports by 1 million tons, according to the Business Standard. Steel exports from India in the period under review declined by 23.4% to 1.5 million tons. Despite a 6% fall, imports of finished steel products remained high at 2.5 million tons, per the Business Standard.

According to another research agency, India Ratings and Research (IRR), the fundamentals of the domestic steel sector are likely to weaken in the current 2019-20 fiscal year (ending March 31, 2020), which includes the risk of softening of prices, elevated raw material prices and weak demand, Argus reported.

Experts say additional safeguard measures imposed on imported steel products by the European Union (E.U.) have dented Indian exports to the trading bloc. E.U. nations like Italy, Belgium and Spain accounted for 5-12% share in India’s total finished steel exports in fiscal year 2019.

In fiscal year 2019, India imported around 3.1 million tons of steel from the Republic of South Korea, followed by 1.8 million tons from China and 1.2 million tons from Japan.

One more worry for Indian steel companies is the plummeting of global iron ore prices. From a five-year high of $121 per ton in July, spot iron ore prices have fallen to $93; iron ore prices are expected to fall further.

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According to the IRR, one area to watch out for is the auction of local ore mines scheduled for March 2020. If there is any delay in the auction schedule, it would lead to a disruption of local steel production.

On April 19, 2018, the U.S. Department of Commerce issued anti-dumping and countervailing duty orders on certain types of aluminum foil from China.

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Chinese producers appealed the decision, but the U.S. Court of International Trade this month opted to uphold the Commerce Department’s determination.

The Chinese plaintiffs lodging the appeal were: Jiangsu Zhongji Lamination Materials Co., (HK) Ltd., Jiangsu Zhongji Lamination Materials Co., Jiangsu Zhongji Lamination Materials Stock Co. Ltd., and Jiangsu Huafeng Aluminium Industry Co., Ltd.

Zhongji’s appeal focused on five aspects of the Commerce Department’s decision, including: the use of South Africa as the primary surrogate country in the case; using Descartes instead of Xeneta data to value international freight; valuing Zhongji’s aluminum scrap using the incorrect HTS classification; calculating Zhongji’s VAT adjustment “based on the wrong transaction”; and the deferment of the Commerce Department’s decision past the statutory deadline.

Zhongji argued the selection of South Africa as a surrogate country for comparison was not appropriate, claiming South African aluminum foil exports were distorted by subsidies and that Bulgaria’s aluminum foil values were more closely aligned with those of Zhongji.

The court, however, said Zhongji’s arguments did not meet the necessary legal standard.

“The subsidies alleged by Zhongji do not meet the ‘reason to believe or suspect’ standard,” the court stated in its case summary. “When there is evidence of a potential subsidy but Commerce has not previously found the specific program to be countervailable, Commerce does not per se reject the data in question and requires evidence of distortion before it will reject it.”

The court acknowledged that the Commerce Department did in fact submit its determination after both the 140- and 190-day statutory deadlines (the latter used for “extraordinarily complicated” cases).

“All parties agree that Commerce violated even the later deadline, which fell on October 4, 2017, by publishing its preliminary determination in the Federal Register on November 2, 2017,” the court summary states. “However, Commerce’s late filing of a preliminary determination does not preclude it from issuing an affirmative preliminary determination, as precedent dictates that statutory deadlines are not mandatory in the absence of an express statement of consequences from Congress.

“In light of this precedent, the court affirms Commerce’s affirmative preliminary determination and collection of duty deposits notwithstanding the missed deadline.”

Ultimately, Judge Gary S. Katzmann ruled in favor of the Commerce Department.

“The court affirms Commerce’s selection of primary surrogate country and data to value Zhongji’s aluminum foil inputs, as Commerce was within its discretion under 19 U.S.C. § 1677b and Policy Bulletin 04.1 in making those selections based on the evidence in the record,” Katzmann wrote. “Additionally, the court grants Commerce’s request for a remand to recalculate its VAT adjustment using the correct sale price. Finally, the court affirms Commerce’s preliminary determination and collection of duty deposits notwithstanding its violation of the statutory deadline.”

The Commerce Department now must file with the court and provide to the parties a revised determination of its VAT calculation within 90 days.

After the requisite determination is filed and provided to the relevant parties, “the parties shall have 30 days to submit briefs addressing the revised final determination to the court and the parties shall have 15 days thereafter to file reply briefs with the court.”

The Aluminum Association expressed its support for the court’s ruling.

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“The Aluminum Association was pleased that the U.S. Court of International Trade affirmed the bulk of the Department of Commerce’s final antidumping determination on certain aluminum foil from China,” said Lauren Wilk, the Aluminum Association’s vice president for policy and international trade. “The court’s decision reinforces the critical role rules play in a functioning global trading system. Targeted trade enforcement – as we’ve seen successfully deployed in the U.S. markets for aluminum foil and common alloy sheet– can have a meaningful and positive impact on U.S. manufacturers.

“The association and its member companies are determined to vigorously defend these orders and are committed to trade enforcement as a tool to address the symptoms of persistent Chinese overcapacity in the aluminum industry, which is impacting the entire value chain.”

The U.S. imported 13% less steel in the first half of 2019 compared with the first half of 2018, the American Iron and Steel Institute (AISI) reported recently.

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Through the first six months of the year, U.S. total steel imports reached 15.62 million net tons, down 12.7% on a year-over-year basis. Meanwhile, finished steel imports reached 11.68 million net tons, down 16.7% year over year.

Total steel imports in June reached 2.02 million tons, down 2.5% from the May total. June finished steel imports reached 1.71 million net tons, down 8.3% from May.

Finished steel import market share hit 20%, continuing the general flatlining of the figure since market share spiked at 25% in January. Estimated import market share for the first six months of the year is 21%.

By product type, several products experienced big import increases in May compared with April: sheets and strip all other metallic coatings (up 100%); heavy structural shapes (up 98%); reinforcing bars (up 56%); hot rolled bars (up 17%); and standard pipe (up 15%).

In addition, line pipe imports in the year to date increased 11% compared with the same period in 2018.

South Korea led the way in terms of offshore exports to the U.S.

Offshore imports came in at:

  • South Korea (163,000 NT, down 44% from May)
  • Japan (112,000 NT, down 9%)
  • Germany (100,000 NT, up 56%)
  • Taiwan (86,000 NT, up 7%)
  • Vietnam (59,000 NT, down 3%)

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Import totals for the first six months of the year were:

  • South Korea (1.45 million NT, down 17% vs. the same period in 2018)
  • Japan (723,000 NT, down 2%)
  • Germany (617,000 NT, down 7%)
  • Taiwan (522,000 NT, down 7%)
  • Vietnam (427,000 NT, down 16%)