This Morning in Metals: Asian Stocks Fall on Trump’s Tariff Threat

Trump Threatens to Raise Tariffs on China

In a Cabinet meeting Tuesday, President Donald Trump said he would raise tariffs on Chinese goods if a deal cannot be reached, CNBC reported.
The economic superpowers have been working toward a first-phase trade deal; despite intermittently encouraging reports, an agreement has yet to be reached.
According to the CNBC, the Shanghai composite fell 0.78% on Wednesday.

Hydro to Close Netherlands Fabrication Unit

Earlier this week, Norsk Hydro announced it will close its fabrication business unit in Drunen, Netherlands.
Closure of the unit will affect 40 employees, the company said.
“The closure is due to the challenging European market, particularly in trailer construction, which represents a large part of the production in Drunen,” the firm said. “Despite several measures taken recent years to improve the situation, it has not been possible to turn the negative development.
“The closure will affect around 40 employees and is expected to be completed by Q1 2020. Employees, the Works Council, trade unions and other stakeholders have been informed and Hydro will work hard to ensure the restructuring process is carried out in a professional and respectful way for all parties involved.”

Citing Market Conditions, EUROFER Looks for Realignment of Steel Safeguards

The E.U., in an effort to combat rising imports and diverted steel supplies as a result of the U.S.’s Section 232 tariff, earlier this year imposed steel safeguards (which it adjusted in September).
However, many in the sector have argued the steel safeguards have not been effective, particularly with respect to the built-in incremental increases in steel quota levels.
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According to EUROFER, market conditions have deteriorated.

“Europe is still flooded by steel imports, even as domestic demand stalls,” said Axel Eggert, director general of EUROFER. “We have seen a contraction of at least 3% this year, even as raw material prices and CO2 costs have boomed. In particular, these CO2 costs are not borne by any other producers around the world.

“This year, European steel companies have had to announce production cuts of at least 15 million tonnes; 15,000 jobs have been lost or put at risk. This is in addition to the 20% decline in the steel workforce since 2008.”

EUROFER also made reference to global excess capacity, particularly with respect to China.

“EUROFER requests that the safeguard be realigned to reflect the fact that the quota volumes were set far above traditional EU import levels, and that since then market conditions have considerably deteriorated,” EUROFER said.

“EUROFER also believes that, in the context of the informal discussion on China planned during the Foreign Affairs Council, ministers should reflect on China’s refusal to support the extension of the mandate of the Global Forum on Steel Excess Capacity.”