Articles in Category: Public Policy

This morning in metals news: the US Court of International Trade issued a Section 232-related ruling; General Motors announced the manufacturing locations of its first-ever Chevrolet Silverado electric pickup and GMC Hummer EV SUV; and, lastly, top copper producer Chile closed borders.

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USCIT rules in favor of plaintiff in Section 232 derivatives case

judge's gavel

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The US Court of International Trade (USCIT) has typically rejected challenges to former President Donald Trump’s Section 232 tariffs.

This week, however, the court ruled in favor of a plaintiff who contested Trump’s expansion of the tariffs to cover steel and aluminum derivatives.

With Proclamation 9980 on Jan. 24, 2020, Trump expanded the Section 232 duties to cover steel and aluminum derivatives.

In this case, PrimeSource Building Products Inc. contested the duties.

“To declare Proclamation 9980 invalid, we must find ‘a clear misconstruction of the governing statute, a significant procedural violation, or action outside delegated authority,'” the USCIT explained. “Because the President issued Proclamation 9980 after the congressionally-delegated authority to adjust imports of the  products addressed in that proclamation had expired, Proclamation 9980 was action outside of delegated authority.”

The USCIT awarded summary judgment to PrimeSource on the second count of its complaint.

“As relief on this claim, we will declare Proclamation 9980 invalid as contrary to law and, on that basis, direct that the entries affected by this litigation be liquidated without the assessment of duties pursuant to Proclamation 9980, with refund of any deposits for such duty liability that may have been collected pursuant to Proclamation 9980,” the court stated in its conclusion.

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wind and solar electricity generation

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This morning in metals news: US energy consumption fell by 7% in 2020; the United Steelworkers union commented on the details of President Joe Biden’s American Jobs Plan; and the aluminum price retraced last week.

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US energy consumption down 7% in 2020

Amid the impact of the COVID-19 pandemic, US energy consumption fell by 7% in 2020, the Energy Information Administration (EIA) reported.

“Last year marked the largest annual decrease in U.S. energy consumption in both percentage and absolute terms in our consumption data series that dates back to 1949,” the EIA said. “Much of the 2020 decrease in energy use is attributable to economic responses to the COVID-19 pandemic that began in the United States during the spring of 2020.”

USW on American Jobs Plan

As we noted last week, the United Steelworkers union last week announced a strike at nine Allegheny Technologies Inc. facilities. The move could have significant ramifications for stainless steel buyers, should it linger.

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E.U. flag

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The European steel industry faces three major challenges, following the impacts of the COVID-19 global and the 2008-09 financial crisis, management consultancy McKinsey & Company stated.

“European steel producers should consider making a series of short-term operational and medium- to long- term strategic moves to ensure economic and environmental sustainability going forward,”
McKinsey said in its March 15 report, “The future of the European steel industry.”

“These strategic moves could encompass restructuring steps aimed at capacity reduction, steps toward strengthening the position of steel companies by diversifying their capabilities and sustainability moves toward low- and no-carbon steel,” McKinsey added.

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European steel needs to address overcapacity

The first move the sector needs to address is the increase in structural overcapacity. That is particularly true after a demand loss of between 5 million and 10 million metric tons demand loss as a result of the pandemic, the group stated.

“European steel players need to adjust overcapacity to be in sync with next normal steel demand,” McKinsey said.

Adjusting for a greener future

Steelmakers also need a short-term response to compensate for higher costs with profitability improvements and incremental measures that will reduce CO2 emissions. For example, they can do so by increasing the scrap rate, the report added.

Meanwhile, producers need to make investments with a view to medium- and long-term decarbonizing of the steel industry. In short, they should tailor long-term plans and technology choices towards CO2 neutrality, McKinsey noted.

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infrastructure

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President Joe Biden released details of the so-called American Jobs Plan, which among its stated goals aims to modernize infrastructure, revitalize manufacturing and create what it says will be “millions” of jobs.

The proposal will include an investment of approximately $2 trillion over the next 15 years, the White House said Wednesday.

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Aluminum in infrastructure

On the heels of the announcement, domestic metals associations weighed in on the Biden administration’s wide-ranging proposal.

The Aluminum Association applauded the news in general terms, emphasizing aluminum’s role in infrastructure development.

“We are pleased to see the Biden administration and the Congress focusing on infrastructure investment as the national priority that it is,” Aluminum Association President and CEO Tom Dobbins said. “Aluminum is an essential element to America’s infrastructure future – used widely in the electric grid, solar panels, electric vehicle charging stations and buildings of all kinds. Major investment will also provide a once-in-a-generation opportunity to modernize the nation’s recycling infrastructure, vital to shoring up domestic aluminum supply chains and increasing manufacturing self-sufficiency.”

Dobbins added the Aluminum Association “stands ready to work with” the Biden administration and Congress on “investments that work for America’s vital aluminum manufacturing base.”

AISI supportive, but disagrees with funding

Meanwhile, in its own statement, the American Iron and Steel Institute (AISI) also praised the administration’s focus on infrastructure.

However, the industry group expressed its disagreement with the funding mechanisms in the proposal.

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American jobs

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This morning in metals news: President Joe Biden unveiled details of the $2 trillion investment toward the American Jobs Plan; meanwhile, J.D. Power and LMC Automotive recently released their automotive sales forecast for March; and, lastly, Ford yesterday announced its first-ever integrated sustainability and financial report.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Biden reveals details of American Jobs Plan

This week, President Joe Biden unveiled details of his American Jobs Plan, which will include an investment of $2 trillion.

Furthermore, the plan seeks to revitalize the manufacturing sector, improve US infrastructure, and modernize water delivery systems and electrical grids, among other goals.

“The American Jobs Plan is an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China,” the White House said. “Public domestic investment as a share of the economy has fallen by more than 40 percent since the 1960s. The American Jobs Plan will invest in America in a way we have not invested since we built the interstate highways and won the Space Race.”

We have covered the various supply chain and shipping issues that have hampered operations over the last year. Part of the Biden plan calls for improvement of US ports, waterways and airports, including $25 billion for airports.

J.D. Power, LMC Automotive release March sales forecast

Automotive intelligence firms J.D. Power and LMC Automotive recently forecast US automotive retail sales in March would finish up 70.7% compared with March 2020. Furthermore, sales would be up 9.2% compared with March 2019.

In addition, the firms forecast new-vehicle retail sales in Q1 2021 would reach 3.16 million units. That figure would mark an increase of 20.5% from Q1 2020 and 4.7% from Q1 2019.

Ford releases first integrated financial, sustainability report

As electrification continues, many automakers are touting steps taken along the way.

This week, Ford Motor Co. announced the release of its first-ever integrated financial and sustainability report.

Furthermore, the automaker also announced new “science-based targets” toward its goal of carbon neutrality by 2050.

“The targets – to reduce Scope 1 and 2 greenhouse gas emissions from operations 76% from 2017, and Scope 3 GHGs from use of the company’s products 50% from 2019, both by 2035 – were recently approved by the Science Based Targets initiative,” Ford said in a release.

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Before we head into the weekend, let’s take a look back at the week that was and the metals storylines here on MetalMiner, including coverage of the semiconductor shortage, the Midwest Premium and more.

A fire at a Japanese chip-making plant last week has slammed automotive operations. General Motors, Ford and many other automakers have announced idling of production as a result of the shortage.

Meanwhile, on the supply side, Intel announced plans to invest $20 billion to build two new Arizona plants. Furthermore, Intel said it aims to “serve the incredible global demand for semiconductor manufacturing.”

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Week of March 22-26 (semiconductor shortage, Midwest Premium and more)

semiconductor and automobile

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electric vehicle charging

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Most carmakers had a pretty torrid first half of 2020, with factories disrupted, show rooms closed and consumers bunkered down in their homes. Sales plummeted across Europe and North America.

However, the second half of last year and, particularly, the first quarter of this year have seen carmakers’ prospects come roaring back.

The MetalMiner team will present a commodity forecast for copper, aluminum, stainless and carbon steel on Wednesday, March 24, at 10 a.m. CDT https://zoom.us/webinar/register/WN_6J8wAyYySfihVk3ZUH9yMA.

The move to electric vehicles

Yet, the turmoil being experienced by the industry is much more about the stop-go of last year.

Rather than cause a retrenchment, the pandemic has helped accelerate the move to electrification.

The greatest spur, however, has undoubtedly been government legislation.

EU penalties on carmakers that fail to meet emission reduction targets are driving a mass migration from internal combustion engines (ICE) to hybrids and fully electric vehicles. After a slow start, European carmakers are adopting aggressive transition plans.

Volkswagen goes all in on electric vehicles

Just this past week, Volkswagen announced — to the joy of its shareholders, who piled in to push shares up 20% — that the German automaker aims to become the global leader in electric cars by 2025. The automaker is placing heavy bets on next-generation lithium-ion batteries, the Financial Times reported.

Volkswagen says it will sell 1 million electric or hybrid cars this year, a tenfold increase from 2019, with half being fully electric vehicles and the rest plug-in hybrids.

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housing starts

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After what was a frigid month across the country, February housing starts declined in the US. February saw a historic chill in Texas and elsewhere in the region — in addition to inclement weather in other, traditionally colder parts of the country — that led to many losing power and a decline in natural gas production, among other impacts.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

US housing starts fall 10.3% in February

With residential and commercial customers losing power across most of Texas last month, it’s not surprising that construction activity slowed.

According to the US Census Bureau’s latest report today, US housing starts reached a seasonally adjusted annual rate of 1.42 million. The February rate marked a 10.3% decline from the previous month.

Furthermore, the rate declined by 9.3% from February 2020.

Furthermore, single-family housing starts in February reached a rate of 1.04 million, or down 8.5% from January. In addition, the February rate for units in buildings with five units or more reached 372,000, the Census Bureau reported.

Building permits also decline

In addition, building permit authorizations declined in February by 10.8%, down to a rate of 1.69 million.

Meanwhile, single-family authorizations fell 10.0% to a rate of 1.14 million. Authorizations of units in buildings with five units or more reached a rate of 495,000.

Materials prices rise

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E.U. flag

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This morning in metals news: the European Parliament recently voted on a resolution for a Carbon Border Adjustment Mechanism; China’s steel output reached nearly 175 million tons in January and February; and the US CRC price has widened the spread with the China CRC price.

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European Parliam passes Carbon Border Adjustment Mechanism

Last week, the European Parliament passed a resolution for a Carbon Border Adjustment Mechanism.

“The European Parliament has sent a clear signal that a workable carbon border measure is of critical importance for the transition of industry towards climate neutrality,” said Axel Eggert, director general of the European Steel Association (EUROFER). “The measure must fill the gap of the carbon cost differential with global competitors and imports instead of replacing or reducing current levels of carbon leakage protection.”

Eggert added straight replacement of free carbon dioxide certificates for a border measure would be “bad policy.”

“Primary steelmaking makes up three-fifths of European production, and such producers would face carbon costs at least twenty times higher than global competitors exporting to the EU,” Eggert added. “This vote shows that the Parliament intends to defend manufacturing and jobs in Europe.”

China churns out 175M tons of crude steel in January, February

The Chinese steel sector produced 175 million tons of steel in January and February, according to National Bureau of Statistics data reported by Reuters.

Average daily output during the aforementioned period reached 2.97 million tons per day. The average came in higher than daily output in December 2020 and January-February 2020, Reuters reported.

US CRC widens gap with China CRC

The US CRC price has become increasingly expensive relative to the China CRC price.

US CRC closed Monday at $1,429 per short ton, or up 8.04% from a month ago.

Meanwhile, China CRC closed at $850 per short ton, for a spread of $579.

In mid-February, the spread stood at $523.

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patent

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This morning in metals news: U.S. Steel announced the acquisition of patents from The NanoSteel Company, Inc.; meanwhile, China is eyeing stronger management of its mineral resources; and, lastly, Rio Tinto plans on building a new tellurium plant at its Kennecott mine.

The MetalMiner team will present a commodity forecast for copper, aluminum, stainless and carbon steel on Wednesday, March 24, at 10 a.m. CDT: https://zoom.us/webinar/register/WN_6J8wAyYySfihVk3ZUH9yMA.

U.S. Steel acquires steel patents

U.S. Steel announced it had acquired flat rolled sheet steel patents and trademarks from The NanoSteel Company, Inc.

“The NanoSteel Company designed and developed patented proprietary alloys which derive exceptional mechanical properties from their nano-scale microstructure, which creates a unique combination of extreme strength with the enhanced formability normally found only in low-strength mild steels,” U.S. Steel said in its announcement. “The NanoSteel® grades can be rolled thicker than other high-strength grades and are designed for automotive and heavy industrial applications where higher strength-to-weight ratios are essential.”

China to review management of mineral resources

As we noted earlier in the Rare Earths MMI, Beijing has recently indicated it plans to consider tighter export controls for rare earths.

Furthermore, Reuters reported Friday that the government has set out a five-year plan in which it aims to strengthen its management and control of its strategic mineral resources.

The five-year plan also includes effort toward the “green” transformation of the country’s massive, high-polluting steel sector, the report added.

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