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This morning in metals news, an NFL franchise’s new stadium project in Las Vegas is facing delays in steel deliveries, Indonesia and China have taken anti-dumping action against each other’s steel products, and Ford earlier this week announced workers in southeast Michigan will make the automaker’s first autonomous vehicles in 2021.

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Steel Deliveries Delayed at Raiders’ Las Vegas Stadium

The National Football League’s Oakland Raiders are scheduled to make the move to Las Vegas in 2020, when the franchise’s new stadium is scheduled to open.

However, completion of the stadium project — for which taxpayers are contributing $750 million — is expected to be pushed back due to recent delays in deliveries of steel components, the Associated Press reported.

Indonesia, China Take Aim at Each Other’s Steel

Sticking with steel, Reuters reported Indonesia and China have slapped anti-dumping duties on each other’s steel products.

According to the report, Indonesia opted to extend an existing 20% duty on flat-rolled steel products, which targeted imports from China and six other countries.

Ford Announces Battery Electric, Autonomous Vehicle Moves

Automakers around the world are preparing for an increasingly electrified and/or autonomous vehicle market.

In that vein, Ford Motor Co. recently announced moves related to those two next-generation vehicle segments.

Ford announced it is expanding its electric vehicle production to a second plant, its Flat Rock Assembly plant in southeast Michigan.

“We’ve taken a fresh look at the growth rates of electrified vehicles and know we need to protect additional production capacity given our accelerated plans for fully electric vehicles,” said Joe Hinrichs, Ford’s president of global operations, in a company release. “This is good news for the future of southeast Michigan, delivering more good-paying manufacturing jobs.”

In addition, Ford said it will begin production of the automaker’s first autonomous vehicles at a new production center in southeast Michigan.

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“As we ramp up AV production, this plan allows us to adjust our investment spending to accommodate the pace of growth of this exciting new technology,” Hinrichs said in the prepared statement. “This new plan combines our core strength in mass manufacturing with the agility and leanness we’ve shown with our modification centers for specialty manufacturing.”

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This morning in metals news, China’s copper imports fell in February, U.S. Steel won an award sponsored by the Department of Energy and General Motors rolled out its last Chevy Cruze this week.

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Copper Imports, Aluminum Exports Down in China

China’s February copper imports fell to their lowest level in 11 months, Reuters reported, while copper concentrate imports rose to an all-time high.

Meanwhile, China’s aluminum exports fell 37.9% in February compared to the previous month, according to the report.

U.S. Steel Wins DOE Award

U.S. Steel won an award from the High-Performance Computing for Manufacturing Program sponsored by the Department of Energy, which will allow the company to “expand the company’s manufacturing capabilities for advanced high-strength steel.”

“The goal of the winning project, drafted by researchers Evgueni Nikitenko and Susan Farjami at U. S. Steel’s Research and Technology Center in Munhall, Pa., is to enhance the company’s hot strip mill model used in creating AHSS,” a U.S. Steel release stated. “This type of steel is used by automakers to manufacture economically lightweight vehicles to meet increasing fuel efficiency requirements while maintaining exceptionally high safety standards.”

According to the release, the project research will take place at the Lawrence Livermore National Lab, which will receive $300,000 to collaborate with U.S. Steel.

End of the Cruze

Per its announcement late last year, General Motors idled its Lordtown, Ohio assembly plant earlier this week, where the automaker rolled out its last Chevy Cruze vehicle.

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According to NBC News, the closure will lead to the elimination of nearly 1,700 hourly jobs by the end of the month.

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This morning in metals, U.S. imports of steel dropped 12% year over year last year, Chile’s copper and lithium export revenue fell in February and markets react to uncertainty over the ongoing U.S.-China trade talks.

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Imports of Steel Drop 11.5%

U.S. steel imports fell 11.5% in 2018 compared with the previous year, according to an American Iron and Steel Institute (AISI) report citing U.S. Census Bureau data.

Total steel imports hit 33.7 million net tons in 2018, according to the report. Finished steel import market share for 2018 hit 23%, according to the report, and was 19% in December.

Chile’s Copper, Lithium Export Value Drops

Revenue stemming from Chile’s copper and lithium exports in February fell compared with the same month the previous year, according to a Reuters report.

Chile’s copper export revenue in February fell 19% year over year, according to the report, while lithium export revenue dropped from $76 million in February 2018 to $60 million last month.

Asian Markets Down on Trade Uncertainty

A recent uptick in optimism surrounding U.S.-China trade talks appears to have taken a hit — if Asian markets are any indication.

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According to MarketWatch, Asian markets were down Thursday. Japan’s Nikkei 225, South Korea’s Kospi and Hong Kong’s Hang Seng all slipped on Thursday, according to the report.

The Automotive Monthly Metals Index (MMI) picked up one point this month, rising for an MMI value of 93.

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U.S. Auto Sales

As noted in previous reports, General Motors last year announced a switch from monthly sales reports to quarterly reports. Fellow Big Three automaker Ford Motor Co. has followed suit, recently announcing it would also move to a quarterly reporting schedule.

“We knew that a lot of our competitors would watch to see what our experience would be and if we’d stick to our guns,” GM spokesman Jim Cain told the Detroit Free Press. “We always expected they’d follow.”

Meanwhile, most automakers continue to report on a monthly basis. Fiat Chrysler reported February sales fell 2% year over year, breaking an 11-month streak of year-over-year gains.

“The overall industry is starting off slower due in part to weather, the U.S. government shutdown and concern over tax refunds,” U.S. Head of Sales Reid Bigland said. “We still see a strong, stable economy and anticipate any lost winter sales will be made up in the spring. For us, the Ram brand was the standout in February, and Jeep Cherokee set a February record as well.”

Honda saw its total sales dip 0.4% year over year in February. However, Honda’s Acura brand posted a strong February, with Acura sales increasing 11.3% year over year.  Sales of Acura trucks increased 23.9% year over year.

Nissan’s U.S. sales dropped 12% year over year. Nissan’s ousted former CEO Carlos Ghosn was granted bail by a Tokyo court, NPR reported, as he awaits trial on corruption charges.

Subaru reported a 3.9% year-over-year sales increase, with its Forester performing well in the year to date (up 17.6% compared with January-February 2018 sales). However, earlier this month Subaru recalled 1.3 million vehicles due to brake light issues, impacting certain Forester, Impreza and Crosstrek vehicles.

Section 232 Auto Report Moves to Trump

Last month, Secretary of Commerce Wilbur Ross submitted a report to President Donald Trump related to the Trump administration’s Section 232 investigation on imports of automobiles and automotive parts.

Pursuant to Section 232 of the Trade Expansion Act of 1962, once an investigation begins the commerce secretary has 270 days by which to provide the president with a report including recommendations. This particular investigation began May 23, 2018, setting the deadline on Feb. 17.

However, some industry groups have complained because the report was not made available to the public.

“It is critical that our industry have the opportunity to review the recommendations and advise the White House on how proposed tariffs, if they are recommended, will put jobs at risk, impact consumers, and trigger a reduction in U.S. investments that could set us back decades,” the Motor and Equipment Manufacturers Association said in a prepared statement. “Secrecy around the report only increases the uncertainty and concern across the industry created by the threat of tariffs. MEMA calls for the immediate and full release of the report.”

Meanwhile, the European Automobile Manufacturers’ Association (ACEA) issued a statement, arguing European automobiles do not pose a national security threat to the United States.

“Imports of cars and auto parts from the EU clearly do not pose a national security risk to the United States,” ACEA Secretary General Erik Jonnaert said. “Any trade restrictive measures in our sector will have a serious negative impact, not only on EU manufacturers but also on US manufacturers.”

Investments and Relocation

General Motors made waves late last year when it announced plans to close several of its North American plants and cut 15% of its workforce.

GM is far from the only automaker cutting costs and shuffling production, as MetalMiner’s Stuart Burns explained last month. Ford, Jaguar Land Rover, Nissan and Honda, among others, have either cut jobs or moved production.

“The U.S. market could be due for a severe shakeup if President Donald Trump’s threat to slap import tariffs on foreign cars comes into effect,” Burns explained.

“UBS Bank reckons that the worst case — tariffs of 25% — would see the American market shrink by 12% next year.”

As for investment, while GM previously announced the shuttering of five North American plants in 2019, it recently announced new investment in other plants. The automaker plans to invest a total of $56 million in two Michigan plants, located in Romulus and Lansing.

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Actual Metal Prices and Trends

U.S. HDG steel rose 1.8% month over month to $896/st as of March 1. U.S. platinum bars rose 6.0% to $869/ounce. U.S. palladium bars rose 14.9% to $1,522/ounce.

U.S. shredded scrap steel rose 5.7% to $332/st.

Chinese primary lead rose 0.8% to $2,615.72/mt. LME copper rose 5.3% to $6,494/mt.

Korean aluminum coil fell 3.5% to $3.31/kilogram.

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Not long ago, we at MetalMiner published a white paper on the “maker-to-user” movement — that is, the rise in local sourcing here in the U.S.

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The white paper, which makes reference to the agricultural “farm-to-table” movement, investigates some of the benefits of local sourcing and incorporates the impacts of the Trump administration’s tariffs on everything from steel and aluminum to a wide variety of other goods from China.

In that vein, MetalMiner’s sister site, SpendMatters, also took a look at the issue in a guest post from Jason Middleton, vice president of sales and development for Ray Products.

“The domestic companies evaluating reshoring are slowly discovering what some of their peers and competitors have known for more than a decade: Because of hidden costs, outsourcing has never been cost-effective in the long term,” Middleton writes.

Middleton uses British automaker Aston Martin as an example of how offshoring has long-term costs.

“In 2014, after receiving complaints about broken throttle pedals in certain vehicles manufactured after 2007, the company launched an investigation,” he continued. “Their engineers quickly uncovered the issue: The faulty pedals had been made with counterfeit material rather than the company-specified, injection-molded DuPont PA6 plastic.

“How counterfeit resin ended up in these pedals is the result of a complex web of supply chain dynamics.”

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Read the whole post over at SpendMatters.

This morning in metals news, U.S. Agriculture Secretary Sonny Perdue is looking to convince President Trump to use quotas instead of standard tariffs on Canada and Mexico, Chinese steel mills are holding off on iron ore restocking amid rising price, and an Italian aluminum plant will be coming back online soon.

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Metals Tariffs Remain USMCA Sticking Point

The leaders of the U.S., Canada and Mexico last year signed the United States-Canada-Mexico Agreement (USMCA) — meant to serve as the successor to the North American Free Trade Agreement (NATFA) — during the G20 Summit in Buenos Aires.

The signing came approximately 15 months after the formal commencement of talks among the three countries, geared toward revamping and modernizing the 1994 NAFTA.

However, the countries’ legislature still need to ratify the deal if it is to go into effect. While the leaders signed off on the deal, the U.S. maintained its Section 232 tariffs on steel and aluminum vis-a-vis imports from Canada and Mexico.

The fate of the tariffs remains a critical point if the deal is going to be nudged across the finish line.

Aa reported by Reuters, U.S. Agriculture Secretary Sonny Perdue is looking to convince the president that simple quotas are the way to go with respect to steel imports from Canada and Mexico.

Shopping Around

Per another Reuters report, rising iron ore prices have Chinese steel mills holding off on procuring supply.

As noted in the report, iron ore prices surged in February, in part a result of a dam breach disrupting supply from Brazilian miner Vale SA.

Italian Aluminum Plant to Restart

An Italian aluminum plant will be getting back to business in 2020, according to S&P Global Platts.

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According to the report, Swiss company Sider Alloys will restart Alcoa’s former Portovesme aluminum smelter next year.

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

The U.S. Department of Commerce (DOC) announced this week that it had launched anti-dumping and countervailing duty investigations related to imports of fabricated structural steel from Canada, Mexico and China.

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The investigation comes on the heels of a petition filed by the Chicago-based American Institute of Steel Construction Full Member Subgroup.

The total value of imports of fabricated structural steel from the three countries in 2017 is approximately $1.9 billion, according to the DOC. By country, the values are estimated at $658.3 million for Canada, $841.7 million for China and $406.6 million for Mexico.

By quantity, the U.S. imported 213,279 tons of fabricated structural steel from Canada during the January-October 2018 period, up 10.3% from 193,412 tons for the same period in 2017. Mexico’s imports for the period were also up in 2018, at 265,700 tons, up 43.1% from 185,700 tons for the same period in 2017.

Import levels from China actually dipped in 2018, hitting 419,948 tons during the January-October 2018 period, down 2.5% from 430,899 tons in the same period in 2017.

According to the DOC, the alleged dumping margins for the three countries are:

• 30.41% for Canada
• 222.35% for China
• 30.58% for Mexico

Meanwhile, on the countervailing duty side, the DOC said there are 44 alleged subsidy programs for Canada, including “tax programs, grant programs, loan programs, export insurance programs, and equity programs.” For China, that number is 26, which include “tax programs, grant programs, debt restructuring programs, export subsidy programs, as well as the provision of goods and services for less than adequate remuneration.” Lastly, 19 subsidy programs are alleged for Mexico, including “grant programs, tax programs, export programs, and loan programs.”

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Next, the International Trade Commission will make a preliminary determination by March 21. If it rules in the affirmative — that is, that the imports are injurious to U.S. industry and its workforce — then the DOC will continue its investigations. The DOC would then be scheduled to make its preliminary determinations in the countervailing duty and anti-dumping investigations by May 1 and July 15, respectively.

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

The U.S. Department of Commerce (DOC) on Monday announced an affirmative determination in its anti-dumping and countervailing duty investigations of cast iron soil pipe imports from China.

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According to the DOC, China’s cast iron soil pipe exporters have sold the product at less than fair value in the United States at a rate of 235.93% and received countervailable subsidies at rates ranging from 14.69% to 109.27%.

The domestic petitioner in the case was the Cast Iron Soil Pipe Institute based in Mundelein, Illinois. According to the DOC, imports of cast iron soil pipe from China were valued at $11.5 million in 2017.

“In the AD investigation, Commerce assigned a dumping rate of 235.93 percent to mandatory respondent Yuncheng Jiangxian Economic Development Zone HengTong Casting Co., Ltd. (HengTong), the only responding mandatory respondent,” the DOC fact sheet for the investigation stated. “Commerce determined a dumping rate of 235.93 percent for the Chinawide entity, based entirely on a calculated rate. Commerce determined a dumping rate of 235.93 percent for all other exporters from China that Commerce found to be eligible for a separate rate.”

Meanwhile, for its countervailing duty investigation, the DOC calculated a subsidy rate of 14.69% for HengTong and 109.27% for Kingway Pipe Co., Ltd. (based on “adverse facts available”). The DOC determined a rate of 14.69% for all other Chinese producers and exporters.

The case now moves to the U.S. International Trade Commission (ITC), which will make its final injury determinations by April 8. If the ITC rules in the affirmative, the DOC will then issue anti-dumping and countervailing duty orders.

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The U.S. imported 15,695 metric tons of cast iron soil pipe from China in 2017, down 22.1% from the 20,147 metric tons imported in 2016. The value of 2017 cast iron soil pipe imports fell 15.3% from the $13.6 million in 2016 to $11.5 million in 2017.

Just before the statutory deadline, Commerce Secretary Wilbur Ross on Sunday sent President Donald Trump his report on the Section 232 automotive investigation opened last year.

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The Trump administration launched the investigation May 23, 2018, using Section 232 of the Trade Expansion Act of 1962 — the same statute used to impose tariffs of 25% and 10% on steel and aluminum imports, respectively — to determine whether imports of automobiles and automotive parts are considered injurious to national security.

Once a Section 232 probe is launched, the U.S. secretary of commerce has 270 days to send the president a report with recommendations (if any), after which the president has 90 days to make a decision (in this case making for a May 17 deadline for Trump’s decision).

While Ross did send his report just hours before the deadline Sunday, the report was not made public.

As such, industry groups have made calls for the public release of the report.

The Motor and Equipment Manufacturers Association (MEMA) in a statement said it was “alarmed and dismayed” that the report was not available to the public.

“It is critical that our industry have the opportunity to review the recommendations and advise the White House on how proposed tariffs, if they are recommended, will put jobs at risk, impact consumers, and trigger a reduction in U.S. investments that could set us back decades,” the association said in a prepared statement. “Secrecy around the report only increases the uncertainty and concern across the industry created by the threat of tariffs. MEMA calls for the immediate and full release of the report.”

MEMA also warned of a compounding negative impact if the tariffs were introduced on top of the existing Section 232 tariffs on steel and aluminum.

“If these tariffs are imposed, the first impacts will be felt by smaller suppliers,” MEMA said in the release. “Usually North American-based, smaller supplier manufacturers’ two largest costs are raw materials/inputs and salaries. These suppliers are already paying significantly more for their raw materials due to tariffs on steel and aluminum. If Section 232 tariffs are implemented, suppliers will have no choice but to lay off members of their workforce.”

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Earlier this week, Reuters reported European Commission President Jean-Claude Juncker said Trump had told him he would not impose tariffs on imported automobiles for the time being.

However, Juncker added that Europe would retaliate if the U.S. went forward with tariffs on imports of automobiles and automotive parts.

Steel imports are once again threatening India’s steel sector, spurring major steel companies to ask the government to impose steel import duties.

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In the past few months, representatives of steel companies like Tata Steel and JSW Steel have met steel ministry officers with a request that the Indian government look at the present steel import-export scenario and impose duties.

According to a Reuters report, Indian domestic producers are facing not only the issue of cheap imports from China, Japan and some Southeast Asian countries, they are also been buffeted by low domestic prices.

Now, there are reports coming in that the steel companies are seriously contemplating increasing prices, which seems like a contrarian position since consumers have the option of buying cheap, imported steel. At the start of the present financial year, India had turned into a net steel importer for the first time in two years. By June, imports had increased by as much as 15%.

JSW Steel has already hiked the prices by over $100 per ton; others are thinking of following suit.

The reason? An increase in some raw material prices and growth in international steel prices. Indian companies have explained their proposed hike was to be in sync with rising international prices.

Imports, however, are what are causing Indian steel majors a major headache.

Imports of stainless steel from Indonesia, for example, has grown by nine times, according to the Indian Stainless-Steel Development Association (ISSDA). ISSDA also feels that countries like Indonesia, Malaysia and others are allegedly abusing the Association of Southeast Asian Nations (ASEAN) free trade agreement.

The steel ministry is sympathetic to the demands of local producers, and may be contemplating some measures to curb the situation.

But it’s not clear exactly what the government plans to do.

Some reports said the new measures may be more in the nature of non-tariff measures. It’s a case of once bitten, twice shy for India on this matter. In 2016, it lost a dispute against Japan at the World Trade Organization (WTO) on charges that New Delhi unfairly imposed import duties to safeguard its steel industry.

JSW Steel’s Joint Managing Director Seshagiri Rao was quoted last month as saying there was an urgent need to raise duties on steel imports, dubbing them a “major threat” to domestic industry.

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In the first nine months, while exports from India fell by 38%, imports grew faster, Rao pointed out.