U.S., China and Russia flags

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This morning in metals news: the United States Trade Representative released its annually mandated report covering the WTO rules compliance of China and Russia; U.S. Steel officially closed on its acquisition of the remaining equity of Big River Steel; and the Pilbara Ports Authority earlier this month reported shipping data for December.

USTR releases annual WTO compliance report for China, Russia

As mandated by Congress, the United States Trade Representative on Friday released its annual report on the WTO compliance of China and Russia.

“The United States has been closely monitoring China’s progress in implementing its numerous commitments under the Phase One Agreement and has regularly engaged China using the extensive consultation processes established by the agreement to discuss China’s implementation progress and any concerns as they arise,” the report reads. “Currently, the evidence indicates that China has been moving forward in good faith with the implementation of its commitments, making substantial progress in many areas.

“Because the Phase One Agreement does not cover all of the United States’ concerns, the United States will need to turn to Phase Two of its trade negotiations with China in order to secure resolutions to important outstanding issues.”

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U.S. Steel closes acquisition of remaining Big River Steel equity

In December, U.S. Steel announced plans to acquire the remaining equity in Arkansas-based Big River Steel for $774 million.

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London Metal Exchange

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Steel is the world’s second-largest commodity after crude oil. It is 15 times the size of all other metals markets combined in terms of metric tons. Furthermore, it is worth twice their value.

Yet, until recently, it was an industry that saw little use for a futures market. That is primarily because major steel participants enjoyed stable long-term prices for the materials they needed.

Price material volatility

Prices for iron ore and coking coal, two of the essential raw materials for steel production, have become far more volatile in recent years. That volatility has sent price shocks rippling through the supply chain. In turn, it has created volatility in finished steel prices that consumers are desperate to contain.

Enter the major futures exchanges. For over 200 years, the London Metal Exchange (LME) has provided the trade – producers, traders and consumers – the opportunity to hedge their risk across a growing range of base metals.

However, only recently have exchanges such as the LME, the U.S.’s CME and the Shanghai Futures Exchange (SHFE) in China introduced products allowing the trade to hedge raw material and finished steel price risk.

Do you know the five best practices of sourcing metals, including steel?

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