Articles in Category: Metal Fabricated Parts

China is planning a bailout of sorts for Bohai Steel Group and standards organization ASTM International wants to develop certifications for commercial space flight.

A New Lifeline for Bohai Steel

Financial authorities in Tianjin, China, plan to convert a portion of debt-stricken Bohai Steel Group‘s liabilities into bonds, according to rescue plans drawn up recently, the online financial magazine Caixin reported on Monday.

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According to the plan, high-quality assets from Bohai Steel will be restructured to form a new company, which will take on 50 billion Chinese yuan of the total debt. Officials met last week to discuss a comprehensive restructuring plan for the firm, which has liabilities of $28.78 billion (192 billion yuan) from 105 creditors.

ASTM Seeks To Develop Private Space Travel Standards

ASTM International will host an organizational meeting to potentially create a new technical committee that develops voluntary consensus standards for commercial spaceflight.

Free Download: The September 2016 MMI Report

This meeting comes in part as a result of the updated U.S. Commercial Space Launch Competitiveness Act of 2015 (SPACE Act). The U.S. Federal Aviation Administration’s Commercial Space Transportation Advisory Committee (COMSTAC) Standards Working Group is recommending the organization of the new group.

Yesterday, Commerce Department placed initial countervailing duty tariffs on imports of circular welded carbon-quality steel pipe from Pakistan.

Free Download: The March 2016 MMI Report

For the purpose of countervailing duty investigations, a countervailable subsidy is financial assistance from foreign governments that benefits the production of goods from foreign companies and is limited to specific enterprises or industries, or is contingent either upon export performance or upon the use of domestic goods over imported goods.

Commerce calculated a preliminary subsidy rate of 64.81% for the mandatory respondent, International Industries Limited. The preliminary subsidy rate is based on facts available and adverse inferences following Commerce’s preliminary determination that the mandatory respondent and the Government of Pakistan had not fully cooperated in the investigation. All other exporters/producers in Pakistan have also been assigned a preliminary subsidy rate of 64.81%.

drillpipe stacked near rig

The investigation covers welded, carbon-quality steel pipes and tube, of circular cross-section, with an outside diameter not more than nominal 16 inches imported from Pakistan. Source: Adobe Stock/ pavelyudin.

Commerce will instruct U.S. Customs and Border Protection to require cash deposits based on these preliminary rates.

The petitioners in this investigation are Bull Moose Tube Company, EXLTUBE, Wheatland Tube, and Western Tube & Conduit.

Free Sample Report: Our April Metal Buying Outlook

The investigation covers welded, carbon-quality steel pipes and tube, of circular cross-section, with an outside diameter of not more than nominal 16 inches, regardless of wall thickness, surface finish, end finish, or industry specification, generally known as standard pipe, fence pipe and tube, sprinkler pipe, and structural pipe.

The Occupational Safety and Health Administration announced last week its final rule to improve protections for workers exposed to respirable silica dust.

Free Download: The March 2016 MMI Report

OSHA says the rule will help prevent lung cancer, silicosis, chronic obstructive pulmonary disease, and kidney disease in workers by limiting their exposure to crystalline silica, which can cause all of the above diseases and disorders when inhaled. The final rule is written as two standards, one for construction and one for general industry and maritime.

This pile of white silica sand is now being more tightly regulated by OSHA. Source: Adobe Stock/Coprid.

This pile of white silica sand is now being more tightly regulated by OSHA. Source: Adobe Stock/Coprid.

Construction companies have until June 23, 2017 to comply with most of the new requirements, such as:

  • Reducing the permissible exposure limit for crystalline silica to 50 micrograms per cubic meter of air, averaged over an eight-hour shift.
  • Mandating employers to use engineering controls (such as water or ventilation) and provide respiratory protection when controls are not able to limit exposures to the permissible level.
  • Limiting access to high exposure areas .
    Training workers to recognize exposures.
  • Provide medical exams to highly exposed workers.
  • OSHA says the new regulations, which replace ones established in 1971, provide greater certainty and ease of compliance to construction employers — including many small employers — by including a table of specified controls they can follow to be in compliance without having to monitor exposures.

Free Sample Report: Our March Metal Buying Outlook

As we’ve mentioned before, the new rules are the culmination of 45 years of debate and consideration of a new silica rule. Regulators have sought to strengthen the 1971 since its inception as silica, in its natural sand state, is pretty much everywhere on construction sites.

Our Stainless MMI remained steady at 51 points. However, we currently see some factors that could lift prices in the short term.

Stainless Anti-dumping Case

On March 4, the U.S. Commerce Department launched an anti-dumping and countervailing duty investigation into Chinese imports of stainless steel sheet and strip, for possible illegal subsidies and selling prices at below cost to illegally gain market share. A preliminary determination of injury to U.S producers is scheduled by March 28.


China’s Ministry of Commerce didn’t respond well to the this new case, arguing that simply restoring prices via protectionist means is not the solution. Chinese steel firms have already been impacted by trade cases. Recently the Commerce Department had imposed 266% preliminary duties on imports of cold-rolled steel from China, punishing Chinese steel makers for dumping or selling below cost. In December, China received a dumping margin of 266% on corrosion-resistant steel products.

Compare Prices With The February 2016 MMI Report

These tariffs have helped U.S. imports come down this year. That led to lower inventory levels here and have given U.S. mills the ability to rise prices. Steel prices climbed over the past few weeks, and stainless prices could follow. With the threat of anti-dumping lawsuits looming, the volume of imported stainless sheet and strip had already been diminishing, which should be seen in the upcoming months. The lack of imports has already pushed out domestic lead times and could create a supply shortage once service center restocking starts. However, it’s still questionable whether prices will hold just on import tariffs alone. Low international prices will add downside pressure if stainless domestic prices rise, especially since China is the only named party. Read more

The Commerce Department placed tariffs on imports of Indian welded stainless pressure pipe and the Aluminum Association is sharpening its statements about imports of Chinese aluminum.

Anti-Dumping Duties for Indian Welded Stainless Pipe

The Commerce Department continued its recent trend of finding initial anti-dumping claims valid and has placed preliminary tariffs on Indian producers of welded stainless pressure pipe.

Free Download: The February 2016 MMI Report

Commerce calculated a preliminary subsidy rate of 2.96% and 6.21% for mandatory respondents Steamline Industries Limited and Sunrise Stainless Private Limited, Sun Mark Stainless Pvt. Ltd., and Shah Foils Ltd., respectively. All other producers/exporters in India have been assigned a preliminary subsidy rate of 4.55%.

As a result of the preliminary affirmative determination, Commerce will instruct U.S. Customs and Border Protection to require cash deposits based on these preliminary rates. The petitioners for the investigation are Bristol Metals, LLC; Felker Brothers Corporation; Outokumpu Stainless Pipe, Inc.; and Marcegaglia USA Inc.

Aluminum Association Speaks

The U.S. aluminum industry has stepped up efforts to work through multiple channels to address China’s production overcapacity and resulting glut in the global market, Politico reported. The “China Trade Task Force,” a cooperative effort between smelter Century Aluminum and the United Steelworkers union, have been working to slow imports of cheap Chinese product for some time, but now the industry trade group the Aluminum Association is speaking out more forcefully.

The association said in October that it would work with its Chinese counterparts to curtail overproduction there, but now the group is talking more stridently about the imports and Chinese authorities’ inaction to this point

China is “not slowing down their run-up in capacity,” Charles Johnson, the association’s vice president for policy, told Pro Trade in an interview. “We believe we have to get to the underlying issue.” The group is working toward the overall goal having the U.S. negotiate an agreement with Beijing to cut back production for which there is no demand.”

Free Sample Report: Our March Metal Buying Outlook

Politico reported that the industry association also persuaded Customs and Border Protection to reverse tariff reclassifications that Chinese producers use to conceal exports of minimally processed primary aluminum in order to avoid a 15% tariff and capture a Chinese value-added tax rebate.

Our Construction MMI stopped its slide this month and gained 5% this month as products such as rebar and H-beam steel saw significant price increases.

Free Download: The February 2016 MMI Report

Construction product prices had to, eventually, increase as the US industry has remained strong and demand for new buildings continues to outpace the regular economy. Post-recession construction activity reached a new high in 2015, with office space under construction peaking at 92.8 million square feet, according to professional services and investment management company Jones Lang LaSalle (JLL).


The American Institute of Architects‘ Architecture Billings Index showed positive growth for eight of the 12 months of 2015, as well. With such robust building and spending, why didn’t construction product prices increase sooner?

Oversupplied Side

Like many industries, US construction is a supply side business. With so much rebar, steel, aluminum sheet, copper wire and other product readily available in all locales no critical mass of demand formed during 2015 and prices actually fell as cheap transportation costs — thanks to the low price of oil — conspired with the surplus to deliver record low construction costs. Labor, on the other hand, was a different story as skilled construction laborers enjoyed high demand as fewer of them were available in the robust market — due to retirement and the wealth of projects to work on — and they could demand top dollar.

That’s one of three trends predicted to effect construction later this year, JLL said: The upcoming election’s effect on consumer behavior, the Federal Reserve increasing interest rates and the aforementioned labor shortage of trained construction employees, especially in trade positions.

Other factors might also play a role in pricing. The recent cold-rolled steel tariffs will hit China particularly hard after imports were hit with 256% tariffs. Cold-rolled steel is thought of as a manufacturing product more than for its use in construction, but it is widely used for cold-rolled structures such as frames and joists.

Free Sample Report: Our February Metal Buying Outlook

With all of this being said, the overall commodity picture is still quite bleak and — as oil prices remain weak and most metals continue their bear runs — there is little to suggest that this is a true market bottom. Construction products could have much further to fall before anything close to market equilibrium is reached. Buyers should remain cautious and continue to watch regional prices of products such as rebar and H-beam steel.

Actual Construction MMI Prices

Chinese rebar increased to $306.72 per metric ton this month from $294.95 per mt in February, a one-month jump of 3.8%. Chinese H-beam steel increased to $302.14 per mt this month after coming in at $299.49 per mt in February, a price hike of .9%. Chinese aluminum bar checked in at $1,834.20 per mt in March, a leap of 6% over its $1,731.88 per mt price in February.


It was a third flat month in a row for the Automotive MMI as strong sales in the US and surprisingly resilient ones in China paced end-user markets, but still couldn’t increase the prices of automotive metals as oversupply still plagues global markets.

Free Download: The February 2016 MMI Report

Here in the US, Ford Motor Co. sold 20.2% more new vehicles in February than a year earlier. Fiat Chrysler Automobiles posted a 12% gain, while General Motors sales fell 1.5% as it cut back on fleet sales.


Toyota Motor Corp. sales rose 4.1% on strong sales of its RAV4 compact SUV (up 16%), the 4Runner midsize SUV (up 32%) and the Tacoma midsize pickup truck (up 14.5%). The Lexus luxury brand was up 1%. Read more

A recent report by professional services and investment management company Jones Lang LaSalle (JLL) predicts U.S. construction growth will outpace the regular economy, partially due to activity in cities such as Atlanta, Austin, Texas; Chicago, and Charlotte, N.C. However, rising labor costs are still a concern.

Free Download: The February 2016 MMI Report

Post-recession construction activity was high in 2015, with office space under construction peaking at 92.8 million square feet. Construction costs are up in primary markets due to rising wages, while materials prices remain relatively low in the short term.


U.S. Construction activity is expected to increase in 2016 even above the healthy market levels of 2015. Image: Jeff Yoders.

Construction will continue its growth trajectory, but it will slow, JLL says, along with economic growth nationwide. Three trends are leading to a softer 2016: The upcoming election’s effect on consumer behavior, the Federal Reserve increasing interest rates and a labor shortage of trained construction employees, especially in trade positions. However, demand from downstream markets will bolster the industry and construction profit margins should continue to rise, keeping construction growing at a faster rate than the overall economy.

Free Sample Report: Our February Metal Buying Outlook

The national construction backlog in Q3 of 2015 was around eight-and-a-half months, down for every region but the south.

The Raw Steels MMI held steady at 47 this month. Although international steel prices remained depressed in January, domestic prices drew a different picture.

US Mills Increase Prices

US steel mills began raising prices in December, leading to higher domestic prices in January. Domestic supply had declined significantly in 2015, with capacity utilization close to 60%.


At the same time, with the uncertainty regarding anti-dumping actions, finished steel imports have slowed.

Free Sample Report: Our February Metal Buying Outlook

Finally, steel companies’ shipments were impacted over the past few months as service centers focused on destocking and now that inventory has finally come down, service centers will finally need to start restocking activity. This combination of factors left US mills in a sweet spot in 2016 to increase prices.

Sustainable Increase?

Domestic prices might continue to rise in the coming weeks. After the huge price slump in 2016, domestic prices deserve a bounce in Q1. However, mills won’t likely succeed in raising prices for too long. Read more

Gather round, folks, dead-cat bounces for all

Free Sample Report: Our January Metal Buying Outlook

And this month’s Global Precious Metals MMI was no exception – after hitting yet another all-time low of 68 last month, the sub-index bounced back up to 70 for our January reading.


As for the dead-cat bounce, the Aluminum MMI had what looked like one, my colleague Raul writes:

“Aluminum has declined more than 30% on the year-to-date. A 3% increase after such a price slump means nothing. Indeed, aluminum producers should be worried that prices are not able to make a decent rally from these low levels. That only means that investors are only interested in selling, not buying.”

The steel markets, too:

“Although steel prices took a break from their year-long fall in December, there are still many factors weighing down prices. It seems too early to bet on a recovery in prices. For corrosion-resistant steel buyers, the effects of the new import duties are certainly something to watch.”

And even the Copper MMI had a tiny one too, (stay tuned for that story, coming next week).

So, alongside the baby-sized Fed interest rate hike came a bit of a bounce for our precious metals price index. Welcome to the party. Read more

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