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ArcelorMittal’s proposed purchase of Italy’s troubled Ilva steel plant was hailed by nearly all parties as a successful solution to one of Italy’s thorniest and longest-running industrial and environmental problems.

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The Ilva steel plant has been dogged for years by under-investment, losses and, most seriously, repeated toxic emissions linked to high cancer and respiratory disease rates in the area.

ArcelorMittal had undertaken to clean up the plant and tackle open-air mineral waste deposits that, according to the Financial Times, spew such serious pollution into the air that the local Taranto authorities have to declare periodic “wind days” (on which schools near the plant are forced to close to avoid dust exposure).

ArcelorMittal’s €1.8 billion (U.S. $2.15 billion) purchase of the plant from the Italian owners would have saved Italy’s largest steel works from insolvency, securing some 20,000 jobs at the plant and supply chain but also, according to pledges made by the firm, would clean up the environmental problems.

Yet politicians in the Taranto and wider Puglia area have mounted a legal challenge to the takeover on the grounds that it does not tackle pollution from the plant quickly enough.

No one said doing business in Italy was easy — but many fear ArcelorMittal could walk from the deal if local politicians continue to obstruct the process.

The European competition authorities in Brussels have already raised objections to the deal on the grounds that ArcelorMittal would control more than half the European market in premium galvanized steel should the purchase go through without divestments in other areas.

Fortunately for the local community that desperately needs the deal to ensure employment while addressing the environmental catastrophic they find themselves in the European steel market is doing rather well at the moment and it remains in ArcelorMittal’s interests to secure the plant if the local communities interests can be shown to be taking precedence.

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For the time being though the combination of EU and local opposition means the fate of one of Europe’s largest steel plants remains in the balance.

Grain-oriented electrical steel (GOES) import levels appear to have peaked in March of this year at 3580 metric tons. Despite a rise in June, import levels appear lower now than during the summer months, but are clearly higher than 2016 levels.

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With a Section 232 investigation still underway, we might expect to see declining import levels until the Department of Commerce submits a report to the Trump administration next month — at which point it remains unclear what will happen with steel imports.

The story behind GOES imports, however, looks quite different from the story behind other steel imports, particularly carbon steel – hot rolled coil, cold rolled coil and coated products.

The GOES trade story has become more complicated, particularly when one considers what types of GOES materials have entered the U.S. market.

Most of the imports did not come from China or Korea (often the targets of trade complaints) — rather, the lion’s share of the volume comes from Japan. See chart below:

Source: US ITC

Yet, Japan produces several products for which no domestic source exists – namely, “heat-proof” products, including those using domain-refined processes used “…in specialty transformers where small size, high efficiency and low noise are at a premium.” Indeed, that description appeared in the U.S. International Trade Commission’s examination of “Grain Oriented Electrical Steel from Germany, Japan and Poland” (see link above).

The domestic producers did not win that trade case. ATI subsequently shut down its GOES operations.

Japan’s JFE and Nippon Steel remain the dominant GOES players for these more technically difficult higher end grades. The Kobe Steel scandal will have little to no impact on GOES markets, since Kobe does not supply the U.S. market with GOES.

Meanwhile, the market will await for additional grain-oriented electrical steel announcements (and potentially supply of H1-B) from Big River Steel, as well as some clarity around GOES with the Section 232 investigation.

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Exact GOES Coil Price This Month

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