For the year as of July 20, the U.S. steel sector notched a capacity utilization rate of 81.1%, up from 77.0% for the same period in 2018, according to the U.S. steel production report released by the American Iron and Steel Institute (AISI).

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Year-to-date production reached 54.2 million tons, up 5.0% from the 51.6 million tons produced during the same period in 2018.

Meanwhile, for the week ending July 20, U.S. steel production reached 1.9 million tons at a capacity utilization rate of 80.4%. The weekly production total marked a 1.8% from production during the same week in 2018, when production hit 1.8 million tons at a capacity utilization rate of 78.4%.

Production for the week ending July 20, 2019, was up 0.3% from the previous week, when the capacity utilization rate reached 80.2%, according to AISI.

By region, production for the week ending July 20, 2019, reached:

• Northeast: 205,000 tons
• Great Lakes: 685,000 tons
• Midwest: 204,000 tons
• Southern: 697,000 tons
• Western: 81,000 tons

According to another AISI report released late last month, U.S. imports of steel for the first five months of the year reached 13.6 million tons, down 11.7% on a year-over-year basis. Finished steel imports for the same period reached 10.0 million tons, marking an 18.1% decrease from the same period in 2018.

Finished steel import market share came in at an estimated 19% in May, according to AISI, and 21% for the January-May 2019 period.

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In other recent steel news, the U.S. Department of Commerce recently announced it found evidence of dumping and countervailable subsidies with respect to imports of steel racks from China.

According to the Department of Commerce, imports of the steel racks from China were valued at $200 million in 2017. From 2016 to 2017, imports of the steel racks from China increased by 15.7%

The Department of Commerce calculate dumping rates ranging from 18.06% to 144.50% and countervailable subsidies ranging from 1.50% to 102.23%.

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

The U.S. Department of Commerce announced late last week that it found evidence of dumping and countervailable subsidization of steel racks from China.

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According to the DOC, imports of the steel racks from China were dumped into the U.S. at less than fair value at rates ranging from 18.06% to 144.50%.

The DOC also determined the steel racks benefited from countervailable subsidies ranging from 1.50% to 102.23%.

According to the Department of Commerce, imports of steel racks from China were valued at $200 million in 2017.

The case is spurred by a petition from the Coalition for Fair Rack Imports filed in June 2018. The coalition’s members are: Bulldog Rack Company (Weirton, West Virginia), Hannibal Industries, Inc. (Los Angeles, California), Husky Rack and Wire (Denver, North Carolina), Ridg-U-Rak, Inc. (North East, Pennsylvania), SpaceRak (Marysville, Michigan), Speedrack Products Group, Ltd. (Sparta, Michigan), Steel King Industries, Inc. (Stevens Point, Wisconsin), Tri-Boro Shelving & Partition Corp. (Farmville, Virginia), and UNARCO Material Handling, Inc. (Springfield, Tennessee).

The U.S. International Trade Commission will make its final determinations in the case by Sept. 3. If the USITC rules in the affirmative, the Department of Commerce will issue anti-dumping and countervailing duty orders.

The DOC applied the 18.06% dumping rate for Nanjing Dongsheng Shelf Manufacturing Co., Ltd., while the China-wide entity was assessed at a 144.50% dumping rate.

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As for countervailing subsidies, the DOC said Nanjing Dongsheng Shelf Manufacturing Co., Ltd. benefited from countervailable subsidies at a rate of 1.50%, while adverse facts available led to a rate of 102.23% for other companies.

From 2016 to 2017, imports of steel racks by tonnage increased 15.7%, up to 371,082 tons in 2017.

Recently, the European Steel Association (EUROFER) argued that a series of factors, including rising imports and slowing economic growth, are posing an existential threat to the E.U.’s steel industry.

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Earlier this year, the E.U. imposed steel safeguards in an attempt to protect the bloc’s steel industry on the heels of the U.S.’s Section 232 tariff. However, amid an incremental rise in the steel quota under the safeguards, Europe’s steel sector argues the measures are not effective.

Late last week, the European Steel Association released its 2019-2020 steel outlook.

“The manufacturing sector in the EU may have not seen the worst yet: a deepening escalation of the trade war between the US and several of its main trading partners and a no-deal Brexit would severely impact global trade conditions, trigger a further deterioration in business sentiment and lower investment growth,” EUROFER said in a release. “In that scenario, the EU steel sector would suffer badly because at the same time the risk of import distortions increases due to the expansion of the size of the safeguard measures’ quota both this year and next.”

Axel Eggert, director general of EUROFER, sounded the alarm regarding scheduled increases in the quota under the steel safeguards.

“Given these economic and market conditions the European Commission needs to act now to adapt the steel safeguard measures to reflect these circumstances,” Eggert said. “The repeated rises in the size of the quota this year and next are completely out of step with the sluggish steel market.”

According to the EUROFER report, E.U. apparent steel consumption fell 2.5% in the first quarter of 2019 on a year-over-year basis. EUROFER argues the decline in demand has primarily impacted E.U. steel producers; deliveries from E.U. mills within the E.U. market fell 4% in the first quarter on a year-over-year basis, according to EUROFER.

“The EU steel market is facing severe challenges which are expected to have a negative impact on apparent steel consumption,” EUROFER states. “Following a decline in the first quarter of 2019, real steel consumption is, on balance, expected to stabilise around the year earlier level in the remainder of the year, leading to a total reduction in final steel use by 0.4% over the whole year. Meanwhile, flaws in the design and functioning of the current safeguard measures do not reflect the reality of an EU steel market.”

EUROFER forecasts apparent steel consumption will increase 1.4% in 2020. In addition, the association forecasts output in steel-using sectors will rise 1.1% this year and 1.4% in 2020.

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On a macroscopic level, EUROFER expressed pessimism regarding the bloc’s economic outlook, particularly vis-a-vis exposure to the ongoing U.S.-China trade war.

“The likelihood of increasing economic fragility in the two largest economies of the world – the US and China – do not bode well for global economic growth and trade conditions in the second half of 2019 and in 2020,” EUROFER said. “Given its relative sensitivity to global economic trends, the EU economy is expected to enter a period of below-trend growth. However, growth of domestic demand is forecast to remain sufficiently resilient to prevent the EU economy from sliding into recession.”

The association forecast GDP growth in the third quarter of 1.4% and 1.5% in 2020.

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Much hope was pinned on the latest round of trade talks between the United States and India.

In the end, however, the talks that concluded late last week were inconclusive.

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The Indian government said the countries agreed to continue their discussions for “addressing mutual trade concerns,” Reuters reported.

This round of meetings was supposed to chart the course ahead on trade between the two countries, particularly in the wake of the exchange of tariffs and counter-tariffs.

Yet, many of the questions on agricultural commodities, e-commerce, and steel and aluminum have been put off, according to the report.

Talks will now resume when India’s Commerce and Industry Minister Piyush Goyal goes to Washington next month for talks with United States Trade Representative Robert Lighthizer, Reuters reported.

“The meeting was cordial and aimed at providing a new impetus to bilateral trade and commercial ties, in line with the mandate given by Prime Minister Narendra Modi and the US President Donald Trump during their meeting at Osaka, Japan on June 28, 2019,” Goyal said, according to The Asian Age. “Both sides discussed the broad contours of bilateral trade and commercial ties and agreed to continue their discussions for achieving mutually beneficial outcomes aimed at further growing the economic relationship and addressing mutual trade concerns.”

The U.S. delegation, led by Assistant United States Trade Representative (AUSTR) Christopher Wilson, aimed to explore potential for enhanced bilateral trade and economic engagement with India under the new government, The Asian Age reported. The Indian delegation was led by Sanjay Chadha, additional secretary in India’s ministry of commerce and industry, and also included senior officials from other Indian government ministries.

After delaying the imposition of tariffs on U.S. goods, the Indian government recently opted to levy tariffs on 28 U.S. goods in response to the U.S.’s decision to rescind India’s preferential status under the Generalized System of Preferences (GSP). President Donald Trump announced his intention to remove India’s preferential status in March.

The GSP affords duty-free tariff treatment “to certain U.S. imports from eligible developing countries to support their economic development.” According to the Congressional Research Service (CRS), U.S. imports from India covered by GSP accounted for 11% of U.S. imports from India, checking in at a value of $6.3 billion.

The U.S. was India’s second-largest export market — behind only the E.U. — in 2017, according to the CRS.

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The U.S. goods targeted for tariffs by India included almonds, apples, chemicals, flat-rolled stainless steel products, other alloy steel, tube, pipe fittings, screws, bolts and rivets.

In a July 9 tweet, Trump said “India has long had a field day putting Tariffs on American products,” adding the situation was “no longer acceptable.”

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This morning in metals news, China’s copper import levels fell in June, the U.S.-China trade war saw China’s imports of U.S. goods plunge in June and BHP has long-term designs on mine expansion over the next century.

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China Copper Imports Fall

Imports of copper in China fell 27% on a year-over-year basis, Reuters reported.

In addition, unwrought imports in 1H 2019 fell 12.5% compared with the same period in 2018.

Trade War Slows U.S.-China Trade

Unsurprisingly, ongoing trade tensions between the U.S. and China have seen trade between the two countries slow considerably.

Citing Chinese customs data, the Associated Press reported China’s imports of U.S. goods fell 31.4% in June on a year-over-year basis. Meanwhile, Chinese exports to the U.S. in June fell 7.8%.

Miner BHP Could Expand Significantly

According to Bloomberg, miner BHP Billiton says it could build as many as 11 more iron ore mines in Australia’s Pilbara region over the next 50-100 years.

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Iron ore prices have surged this year to five-year highs amid supply disruptions in Brazil and Australia.

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

This morning in metals news, the U.S. Department of Commerce made affirmative determinations in two of three countervailing duty investigations regarding fabricated structural steel, Chinese copper smelters inked deals with Chile’s Antofagasta and India is investigating dumping claims vis-a-vis flat-rolled steel imports from 15 countries.

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DOC Rules on Possible CVD

The Department of Commerce issued affirmative determinations in its countervailing duty probes of fabricated structural steel imports from China and Mexico.

The DOC found imports of the products from China and Mexico benefited from countervailable subsidies at rates ranging from 30.30-177.43% and 0.01 (de minimis)-74.01%, respectively.

Meanwhile, the DOC made a negative determination vis-a-vis Canada, finding that exporters received countervailable subsidies at de minimis levels ranging from 0.12-0.45%.

Chinese Smelters Sign Antofagasta Deals

China’s top two copper smelters have inked concentrate supply deals with Chilean miner Antofagasta, Reuters reported.

According to the report, Jiangxi Copper Co and Tongling Nonferrous Metals Group inked the contracts earlier than usual on account of tightness in the copper concentrate market.

India to Investigate Anti-Dumping Claims

India will investigate dumping claims with respect to imports of flat-rolled steel from 15 countries, including China, the U.S. and Japan, the Economic Times reported.

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Domestic entities Indian Stainless Steel Development Association, Jindal Stainless, Jindal Stainless (Hisar) and Jindal Stainless Steelway filed petitions with India’s Directorate General of Trade Remedies (DGTR) alleging dumping of flat-rolled steel from the 15 countries.

That the news is all about trade makes a change for us business folks from the tittle-tattle around the private lives of politicians or celebrities, as trade is topic that actually touches all of us (whether we are immediately aware or not).

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That President Donald Trump has made trade dispute a central plank of his first presidency is no surprise.

Throughout his presidential campaign, Trump frequently made reference to what he sees as unfair trade terms enjoyed by America’s trade partners and his intention to use whatever means he could to right the perceived wrong. “Trade wars are good,” he famously said on the campaign trail — he has certainly followed through with that in office.

Just as there appears to be a thaw — or at least a renewed willingness to talk — between the U.S. and China following the G20 summit in Japan, the president has renewed his previous spat with Europe, which ranges across a number of topics.

In addition to the general argument that the U.S. exports less to Europe than Europe does to the U.S., there are specific grievances over automobiles. The U.S. applies a lower rate of duty on European sedans than Europe does on U.S. cars and the company-specific case of subsidies to Airbus, the administration claims, are unfair.

This last one has been the subject of a flare-up this month. The U.S. threatened fresh tariffs on $4 billion covering 89 European products, The Guardian reports, including olives, Italian and Dutch cheese, Scotch whiskey, Irish whiskey, pasta, coffee, and ham. These items join products worth $21 billion that were announced as potential targets for tariffs in April, the paper reports, which included Roquefort cheese, wine, champagne, olive oil and seafood (such as oysters).

The latest list notably also includes a number of copper products, metal consumers should note, including bars, plate, strip and foil (the full list can be found here). The rights and wrongs of the case can be argued with equal validity on both sides, the E.U. claims — and has done since 2004 — that Boeing receives illegal subsidies. Meanwhile, U.S. claims Airbus does.

The reality is both receive state support in one form or another and the WTO has upheld cases in favor of both parties against the other.

So what are you left with?

Read more

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This morning in metals news, India is likely to remain a net steel importer for at least the next two years, residents of Scunthorpe are concerned about the future of their town should British Steel close down and the copper price retreated to a one-week low.

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India to Remain Net Steel Importer

As steel imports continue to flow into the country, India is likely to remain a net steel importer over the next two years, Bloomberg reported citing Fitch Ratings Ltd.’s local unit.

India’s annual steel consumption is nearing 100 million tons, according to the report.

Worrying About the Future

A recent bid deadline came and went for the liquidated British Steel, based in Scunthorpe, England.

Media reports indicate there have been at least nine interested buyers, but it remains unclear if a buyer would be willing to take on the entirety of the business, as opposed to individual parts.

With the plant’s future in limbo, the BBC reported residents of Scunthorpe are concerned about a potential shuttering of the plant and the impact it would have on the town.

“If the worst comes to worst, and the steelworks does actually shut, it will be devastating for so many people here,” one resident is quoted as saying.

“People will probably have to move away.”

Copper Slides

On the heels of the weekend’s G20 Summit in Japan, the copper price fell to a one-week low Tuesday, Reuters reported.

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Copper prices soared to a six-week high on Monday. The LME copper price traded down 0.5% Tuesday, according to the report, down to $5,925 per ton, on weak global manufacturing data.

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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:

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• Belinda Fuller touched on the U.S. dollar’s impact on precious metals prices.
• Sticking with currency issues, Stuart Burns delved into some upcoming decisions that could impact U.S.-E.U. relations.
• Global crude steel production jumped 5.4% in May on a year-over-year basis.
• Steel mills in China are battling rising iron ore prices.
• Global aluminum production hit 5.43 million tons in May.
• U.S. imports of steel are down 12% through the first five months of the year.
• MetalMiner’s new Trade Resource Center is live, available for perusal by navigating to the site’s Research tab or visiting trade.metalminer.com.
• Burns looked into the impact of a strike at Codelco’s Chuquicamata copper mine (labor unions at the mine later voted Thursday to accept the company’s latest contract offer).
• Burns on the decline of the U.K. automotive sector.

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Through the first five months of 2019, U.S. steel imports were down 12% compared with the equivalent period in 2018, the American Iron and Steel Institute (AISI) reported Tuesday.

According to AISI — citing Census Bureau data — the U.S. imported 2.06 million net tons of steel in May 2019, which marked a 38.2% decrease from the April import total.

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Meanwhile, for the first five months of the year, total and finished steel imports reached 13.58 million net tons and 9.95 million net tons, marking decreases of 11.7% and 18.1%, respectively, compared with the first five months of 2018.

Finished steel import market share reached an estimated 19% in May, according to AISI, after reaching 21% in April. For the first five months of the year, import market share is estimated at 21%. In January, import market share reached the 2019 monthly high of 25%.

By product type, several registered notable jumps in import levels from April to May:

• sheets and strip all other metallic coatings (up 100%)
• heavy structural shapes (up 98%)
• reinforcing bars (up 56%)
• hot rolled bars (up 17%)
• standard pipe (up 15%)

By country, the biggest offshore exports of finished steel to the U.S. were: South Korea (290,000 net tons, up 5% from April), Japan (124,000 net tons, down 22%), Taiwan (81,000 net tons, up 13%), Germany (64,000 net tons, down 56%) and Vietnam (61,000 net tons, down 23%).

Meanwhile, country data for the first five months of the year also had South Korea on top, with 1.29 million net tons exported to the U.S., marking a 16% decline from the same period in 2018. South Korea was followed by: Japan (611,000 net tons, flat compared with the same period in 2018), Germany (517,000 net tons, down 6%), Taiwan (436,000 net tons, down 7%) and Vietnam (368,000 net tons, down 5%).

Last month, President Donald Trump removed the Section 232 tariffs on steel and aluminum with respect to imports of the metals from Canada and Mexico. After implementation of the tariffs in 2018, Canada, Mexico and the E.U. won temporary exemptions; however, the exemptions were allowed to expire as of June 1, 2018.

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The removal of the tariffs marked a step forward in the approval process for the United States-Mexico-Canada Agreement (USMCA), which would succeed the North American Free Trade Agreement (NAFTA) as the three countries’ trade agreement. Recently, Mexico became the first of the three countries to secure legislative approval of the USMCA.