Articles in Category: Imports
aluminum foil

Alex/Adobe Stock

This morning in metals news: an aluminum trade group filed anti-dumping and countervailing subsidy petitions relating to imports of aluminum foil from five countries; the consultation period for Alcoa’s San Ciprián aluminum plant ended without an agreement on a social plan for workers; and the U.S. Census Bureau released August import and export data.

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.

Trade group files anti-dumping, countervailing duty petitions

The Aluminum Association’s Foil Trade Enforcement Working Group has filed anti-dumping and countervailing duty petitions relating to imports of aluminum foil from five countries.

The countries are Armenia, Brazil, Oman, Russia and Turkey.

“We continue to see how persistent aluminum overcapacity driven by structural subsidies in China harms the entire sector,” said Tom Dobbins, president and CEO of the Aluminum Association. “While domestic aluminum foil producers were able to invest and expand following the initial targeted trade enforcement action against imports from China in 2018, those gains were short lived. As Chinese imports receded from the U.S. market, they were replaced by a surge of unfairly-traded aluminum foil imports that are injuring the U.S. industry.”

The anti-dumping petition includes all five of the countries. Meanwhile, the countervailing duty petition alleges imports from Turkey and Oman benefited from illegal government subsidies.

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steel imports

nattanan726/Adobe Stock

This morning in metals news: U.S. steel imports plunged by more than half from July to August; copper price gains Monday were capped over concerns regarding long-term prospects; and the WTI crude oil price slipped.

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U.S. steel imports fall to 1.2M metric tons

U.S. steel imports fell to 1.2 million metric tons in August, down from 2.5 million metric tons in July, the U.S. Census Bureau reported.

Through the first seven months of the year, the U.S. imported 13.7 million metric tons of steel. The import total marked a decline from the 17 million tons imported during the same period in 2019.

Copper gains capped

Meanwhile, in addition to U.S. steel imports, the copper price posted gains Monday but its rise is capped, according to a report by Reuters.

The LME copper price rose 0.6% on Monday, up to $6,584.50 per metric ton.

Concerns over copper’s long-term prospects capped gains, according to the report.

WTI crude falls

As readers of the MetalMiner Annual Outlook know, oil prices are a key factor in our metals price analysis.

The WTI crude oil price closed Friday at $40.25 per barrel, down $0.86 per barrel from the previous week. On a year-over-year basis, Friday’s closing price fell $16.16 per barrel.

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.

Shipping

enanuchit/Adobe Stock

We have written in previous posts about volatility this year in the logistics market adding to buyers’ delivery and import cost uncertainty.

At other times, we have also written about the decoupling of U.S.-China trade or supply chains.

Events in recent months, however, suggest the two combined are likely to continue to create significant cost and uncertainty for buyers through the balance of this year — and likely well into 2021.

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The U.S.-China trade relationship and rising import costs

Firstly, the aforementioned decoupling is just not happening.

A fair part of the current pressure on shipping space and costs is coming from increases in trade between Asia and the U.S.

The pandemic has spurred demand for Chinese-made goods from electricals like laptops and associated electronics to PPE equipment, including masks and gloves.

China now accounts for more than 85% of all U.S. imports in the category dominated by N-95 respirators, disposable and non-disposable face masks, surgical drapes and surgical towels, according to Forbes. The U.S.’s imports of those products have surged to multiples of previous years’ demand.

From disaster to boon

Secondly, the normal run-up to the Christmas period is hitting a brick wall.

Shipping lines are removing sailings. Initially, the measure constituted a coping mechanism during spring lockdowns. However, since then, as the success in raising freight rates became apparent, the measure became a blatant move to improve profitability.

The pandemic has evolved rapidly from being a disaster for the major shipping lines to becoming a boon.

The disruption has caused considerable challenges, including:

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steel shipment

Hor/Adobe Stock

This morning in metals news: U.S. Steel’s Q3 guidance included a $100 million loss despite improving conditions; the United States International Trade Commission (USITC) made a sunset review determination related to kitchen appliance shelving and racks; and a subsidiary of Norsk Hydro entered into a contract with Spanish aluminum company Alu Iberica.

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U.S. Steel’s Q3 guidance

U.S. Steel said it expects a loss of approximately $100 million in Q3.

“Improving market conditions experienced in June and July have accelerated through August and September,” U.S. Steel President and CEO David B. Burritt said. “Strengthening steel fundamentals and our ability to respond quickly to increasing customer demand are expected to result in significantly improved adjusted EBITDA in the third quarter. We have grown confident in the recovery that is underway in North America and Europe. While we believe this recovery is enduring, we remain relentlessly focused on what we can control, including management actions to stay nimble, reduce costs, and preserve cash.”

In addition, U.S. Steel expects a Q3 diluted loss per share of $1.45.

USITC makes determination on kitchen appliance shelving, racks

The USITC recently conducted a five-year sunset review related to existing countervailing duty and antidumping orders on kitchen appliance shelving and racks from China.

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steel

gui yong nian/Adobe Stock

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 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.

cargo trains

Oleksiy Mark/Adobe Stock

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.”

“We welcome the final decision and commend the ITC and the Commerce Department for their hard work in these cases and for vigorously enforcing U.S. trade laws,” said Alan Price, chair of Wiley’s International Trade Practice and counsel to the Rebar Trade Action Coalition.

August housing starts fall 5.1%

New housing starts in August fell 5.1% from the previous month, according to the U.S. Census Bureau and the Department of Housing and Urban Development.

Privately owned housing starts came in at a seasonally adjusted annual rate of 1,416,000 in August. The August total, however, marked a 2.8% year-over-year increase.

GM touts Ultium Drive

With Detroit automaker GM transitioning toward an electrified world, the automaker said Wednesday that “Ultium Drive” will power its future.

“General Motors’ next-generation EVs are expected to be powered by a family of five interchangeable drive units and three motors, known collectively as ‘Ultium Drive,'” the automaker said in a release.

Furthermore, Ultium Drive will help the company transition its current portfolio to “a fully electric lineup,” GM said.

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.

U.S. and Canada

ehrlif/Adobe Stock

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).”

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steel

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.

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Department of Commerce building

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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India

Zerophoto/Adobe Stock

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.