CommentaryMarket Analysis

While industrial metals started 2019 in an upward trend, the complex showed weakness as 2019 progressed.

In fact, all of the industrial metals hit down around current support levels — and lower at times — during the past few weeks.

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With industrial metals down across the board, are we moving into bear market territory? Or have we witnessed a temporary blip resulting from less certain macroeconomic conditions?

To examine the situation in more detail, let’s have a look at some of the key industrial metals and recent prices.

The DBB Trended Back Down to Mid-January 2019 Values

After a bullish start to the year, the DBB peaked on a short-term basis in early April, then trended back down once more.

Compared with July 2018’s larger drop, this one appears milder, but the short-term downward trend remains.

Source: MetalMiner analysis of NASDAQ.com data

The DBB tracks three key industrial metals: aluminum, copper and zinc. Let’s take a look at each metal to assess price performance using the LME 3-month futures price.

LME Aluminum

Looking at weekly trading volume, it looks like the downtrend in price is played out (based on recent positive trading volume). Also, both positive and negative weekly volumes looked weak recently, with a lack of momentum in prices.

Source: MetalMiner analysis of Fastmarkets.com

This indicates continued sideways movement on the LME aluminum price.

Given that the aluminum market moved largely sideways during the course of 2019, the Moving Average Convergence/Divergence (MACD) can also indicate where the market is at this time.

The MACD tracks the difference between two exponential smoothed moving averages (using the 12- and 26-day averages); it’s the black line in the graph below, which sits along the bottom edge below the price line. The red line, or signal line, uses the nine-day exponentially smoothed average of the MACD.

Source: MetalMiner analysis of Fastmarkets.com

When the values hold above zero, this indicates the market is overbought. When they are below zero, this indicates the market is oversold. If the lines continue to trend downward, then the downtrend is still in process.

By this indicator, the aluminum market looks oversold and a buy signal emerged recently when the longer-term line turned up after a couple of days of upward market momentum and edged past the signal line. The signal line followed a day later, indicating the downtrend lost steam.

Based on this analysis, aluminum prices may have already hit bottom and turned around; therefore, the aluminum market itself does not look bearish at present.

LME Copper

LME copper prices lately have showed clear weakness. However, they found support again recently in daily trading, stopping a further slide in price.

With negative trading volume still registering on a weekly basis, the price dynamic for copper still looks weak.

Source: MetalMiner analysis of Fastmarkets.com

Looking at volume on a weekly basis, we can see that it trended up again last week. Through the first few days of this week, volume registered as negative on the partial week’s data.

Copper prices still look weak.

LME Zinc

Like the other industrial metals, LME zinc prices trended downward in April.

Looking at weekly volumes for zinc, the price action looks mixed. (Note that the last bar shows only partial data for the week in progress.)

Source: MetalMiner analysis of Fastmarkets.com

Given the clearer trend when looking at LME zinc prices, we can use the 4-9-18 day moving average analysis to assess the state of the current downtrend. The result of the analysis shows the downtrend remains in process as the moving averages queue in the expected order, with the 18-day average on top (blue line), followed by the nine-day (purple line), then the four-day average (red line).

Source: MetalMiner analysis of Fastmarkets.com

Therefore, in the case of LME zinc (using this method) the downward trend continues. The red line, however, the shortest average and therefore most sensitive, has recently shown signs of turning back up.

Source: MetalMiner analysis of Fastmarkets.com

Looking at a MACD analysis, based on the 12-, 26-, and nine-day periods, the downtrend continues with the signal line in red sitting above the MACD line in black, while both continue in a downward trend below the zero point of the MACD indicator bar.

Readings below zero on the indicator show bullishness in the sense that prices may turn around. However, in this case the lines continue moving in a downward trend, so we may not have seen the bottom of zinc prices just yet.

What this Means for Industrial Buyers

During recent weeks, the main industrial metals tracked by MetalMiner showed weakness. Will this be temporary or are we looking at a more cyclical movement into bear market territory?

While aluminum prices look relatively stable, copper and zinc prices appear weaker, with no clear signal given that the downturn has passed.

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Therefore, while it’s too soon to call a bear market, it’s also too soon to say we’ve avoided one.

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The press has been all over the trade war-induced falls across stock markets. The New York Times reported this week that the S&P 500 was off 2.4% on Monday, the worst day since early January.

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In all, the S&P 500 is down 4.6% so far this month, while the tech-heavy Nasdaq composite index fell 3.4% — its worst decline in 2019.

European and emerging markets have likewise fallen sharply following tit-for-tat announcements between President Donald Trump and President Xi Jinping. This all comes despite the U.S. economy doing well, expanding 3.2% annualized in the first three months of the year and with unemployment down to 3.6%, its lowest level since 1969, the paper reports.

Indeed, it is suggested it is just those healthy numbers that have encouraged the president to up the ante in the face of apparent Chinese intransigence on certain key issues.

To keep stock-market falls in perspective, though they come on the back of a 17% rise so far this year, arguably the market has already achieved a year’s gains in just four months; a correction was to be expected.

The sharp falls, though, show how complacent the markets had become trusting a deal between the U.S. and China was just weeks, if not days away.

That this escalation of trade tensions came on the back of a return to robust growth is no surprise.

It is suggested by The New York Times that both sides have been emboldened by solid domestic growth, not to mention a need to pander to their domestic audiences – in Trump’s case, in the run-up to next year’s elections. Meanwhile, Xi is cognizant of his own nationalist rhetoric of recent years, making compromises to China’s Made in China 2025 march to global pre-eminence a personal humiliation.

So with the scene set for a possibly protracted standoff, you have to wonder why Trump has opened a second front with the European Union.

Conventional wisdom suggests generals wage one war at a time, as fighting on two fronts risks aligning your opponents against you and dividing your forces.

So why has the president chosen this moment to escalate his previous rhetoric with the E.U. over trade issues, threatening again in recent days to levy tariffs on automobiles from the E.U., among other categories? Possibly because the chances of securing a really meaningful victory over China are receding. Counterbalancing that with a win against Europe would allow some face-saving in the run-up to next year’s elections, but the risks are huge.

President Trump faces a May 18 deadline to decide whether to put tariffs on up to $53 billion worth of European cars. E.U. Trade Commissioner Cecilia Malmström is quoted by CNBC as saying she hopes the Trump administration could delay the deadline as it focuses on inking a deal with China, but recent comments from the White House suggest otherwise.

Trump may judge the Europeans more likely to compromise than China, as they certainly have more to lose. Europe is facing a shaky domestic economy already battered by trade tensions with China in the fallout from U.S. action, a decline in sanctions hit Russian trade and rising energy prices (in part due to U.S. action against Iran).

Last but not least, the ink is barely dry on the revised and still to-be-ratified United States-Mexico-Canada Agreement (USMCA). Cracks are showing among the trade partners, as Canada and Mexico mull tariffs of their own in order to pressure Trump to drop his steel and aluminum tariffs.

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If there is any takeaway from the current highly uncertain political and economic outlook, it is consumers need redundancy and options in their supply chains. Well-established, multiyear supply chains are having their economic fundamentals upturned on a tweet. While companies do not want to be chopping and changing suppliers on a whim, having options at least enhances supply chain durability and may just keep production lines running.

Chinese HRC prices increased again this month, while other forms of steel stayed flat overall.

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Source: MetalMiner data from MetalMiner IndX(™)

Looking more closely at HRC — along with CRC, HDG and plate — prices generally remain lower than a year ago on a year-on-year basis, with the exception of HRC due to the recent price increases. However, they all are generally hovering at similar prices levels, with HDG showing the biggest change.

Source: MetalMiner data from MetalMiner IndX(™)

The spread between U.S. HRC and China HRC rests at $122/st, the lowest level since February 2018. However, recently the yuan weakened against the dollar, which will effectively increase the spread once more. A weaker yuan means Chinese prices will be cheaper.

China’s Economic Indicators Flattened in April

China’s Caixin Manufacturing PMI reading decreased unexpectedly for April, dropping to 50.2 from March’s eight-month high of 50.8. With the forecast value at 51.0, the drop surprised the market. Weakness came from decreased output and orders. Additionally, export sales dropped for a second straight month due to weaker overseas demand.

The FXI, an index of China’s large-cap companies, also showed flat growth recently after increasing since the start of the year.

Source: MetalMiner analysis of Yahoo.com data

Crude Steel Production Increases Continued in March

According to the World Steel Association, China produced around 80.3 million metric tons of crude steel during March, an increase of 10% compared to March 2018. For the sake of comparison, the U.S. produced 7.8 million metric tons of crude steel in March, an increase of 5.7% compared with March 2018.

In late April, China’s Iron and Steel Association once again issued a statement indicating the industry faces risks due to ongoing excess capacity, sluggish demand and increased raw material costs.

According to the association, fixed asset investment in the sector increased by 30.6% during Q1 2019. Some of the capacity increase harks back to less environmentally friendly induction furnace production, as companies looking to boost output turned to cheaper production methods. The industry organization came out in a public statement advocating that companies refrain from illicit capacity increases.

According to a recent Reuters report, the organization warned against structural issues in the industry as demand weakens. In addition, profitability suffered due to rising iron ore prices.

China’s Baoshan Iron and Steel Co Ltd (Baosteel) recently announced that profits fell during Q1, the first such drop since 2015. The company cited higher raw material costs and weaker automotive demand as the key causal factors, while demand for steel for infrastructure remained strong.

The company expects to produce 45.46 million metric tons of iron and 48.18 million metric tons of steel in 2019, with an expectation of strong infrastructure demand. Baosteel also expects sales of steel for automotive production to remain a challenge due to the EV transition and due to the impact of tariff-related policy changes.

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China’s automotive sales declined by 11.3% during the first quarter compared with the same period of 2018, according to the China Association of Automobile Manufacturers (CAAM).

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Is President Donald Trump’s latest round of tweets and the resulting global stock market selloff just a negotiating ploy or is it the first signs the much-vaunted trade deal may not be going quite as smoothly as markets had obviously been pricing in?

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The following VIX graph of volatility illustrates better than words how investors had been assuming the trade deal was a done deal in waiting. (Instead, the U.S. on Friday, May 10 raised tariffs on $200 billion in goods from China, upping the rate from 10% to 25%, to which China vowed to respond.)

Source: Bloomberg via the Financial Times

Bolstered by stronger growth in both the U.S. and China during the first quarter, both sides seem unhelpfully bullish in the closing stages of the negotiations and, as such, rowing back on some previous commitments and playing hardball on still unresolved issues.

U.S. President Donald Trump’s renewed threat — which came to fruition — to raise tariffs on Chinese imports, specifically mentioning increasing the levy on $200 billion in Chinese goods to 25% on Friday of last week, sent stock markets into paroxysms.

The U.S. S&P tumbled as much as 2.4% earlier last week, the Financial Times reported, before it clawed back some of the losses.The European FTSE Eurofirst 300 index ended last Tuesday down 1.4% — its biggest one-day drop since February — and slipped a further 0.1% on Wednesday.

Asian markets reacted similarly, resulting in the MSCI World index of global stock markets falling 1.7% last Tuesday, its second-biggest decline of 2019. Coming on the heels of the president’s suggestion that the United States could subject remaining Chinese goods exports (worth some $300 billion to $350 billion) to annual tariffs, in addition to the previously identified $200 billion, has worried investors this deal may not be the done deal they had been thinking.

According to the geopolitical advisory firm Stratfor, up to this point China has focused its concessions on directly addressing the countries’ trade imbalance by guaranteeing increased purchases of U.S. goods and opening market access, along with addressing some structural issues. But reports from the U.S. Chamber of Commerce representatives who have knowledge of the negotiations have indicated that the White House had been backing off its demands over some structural issues, including China’s industrial subsidies and cybertheft, the firm reports.

The biggest snags now appear to be over China’s resistance to U.S. demands for legal changes addressing intellectual property theft and its disagreement with the enforcement mechanisms attached to U.S. demands. It could be that Beijing, having failed to enforce intellectual property rules itself, fears agreeing with the U.S.’s dictation of the judgement and compliance of any such agreement and, by extension, any sanctions Washington decides to impose in the future into some kind of legal framework as being an unacceptable risk.

Put simply, Beijing fears it cannot police or ensure compliance at the local level within China to any agreement reached.

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Nevertheless despite the unhelpful rhetoric and the pressure both Trump and Xi are no doubt facing from their core support — in Trump’s case to wring as many concessions out of China as originally demanded and in Xi’s case to give away as little as possible yet still achieve an agreement — and must be hampering both parties, progress does seem to be happening.

With nationalism on the rise in both countries, concessions are the last move more extreme elements in both camps will accept, but some concessions are an inevitable part of negotiation.

Maybe markets were a little too sanguine earlier this year to think it was a done deal, but nor should they be frightened off by a few tweets: an eventual deal is in both parties’ interest.

The Raw Steel Monthly Metals Index (MMI) dropped 1.2% this month, down to an index reading of 80.

Weakness in the index once again came from U.S. domestic steel prices.

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U.S. prices showed weakness of late with HRC, CRC, HDG and plate prices dropping slightly again for the second month in a row.

Source: MetalMiner data from MetalMiner IndX(™)

This brings prices back down to around February levels, when these four forms of steel initially turned around from recent price declines (after reaching historical highs in April 2018).

A Comparison of U.S. and China Steel Prices

The spread between U.S. HRC and Chinese HRC narrowed between March and April, dropping to $161/st from $183/st in March.

Based on preliminary May numbers, the gap looks poised to close further, with a preliminary drop to $120/st based on early May prices.

U.S. HRC Prices and the U.S.-China Price Spread

Source: MetalMiner data from MetalMiner IndX(™)

Compared to HRC, the spread between CRC prices remains relatively flat, with a drop of just a few dollars between March and April. However, the gap looks to narrow more significantly based on early May prices, with a gap of $223/st (down from April’s $240/st price difference).

Waning Demand in Steel-Intensive Sectors

Construction and housing showed some weakness recently, according to the most recently available U.S. Census Bureau figures.

Total construction spending for March dropped below February by 0.9%, totaling around $1,228 billion. Additionally, the sector looks flat since last year, with this March’s figure coming in below last March, when expenditures on construction totaled $1,293 billion, marking a 0.8% drop.

Q1 expenditures look essentially flat compared with last year, with a 0.2% increase.

The durable goods sector has showed strength, with new orders up for four of the previous five months through March, according to the U.S. Census Bureau, with orders for transportation equipment growing the most.

Reuters reported lower auto sales for April, with the sales decline attributed to rising prices and fewer incentives offered, especially on lower-end models.

In addition, consumers turned to the used market in larger numbers this year due to higher prices, as costs of new vehicles increased this year.

What This Means for Industrial Buyers

Steel prices showed weakness lately, with the monthly index on a gentle decline during the past two months.

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Actual Raw Steel Prices and Trends

U.S. HRC futures spot and 3-month prices both declined this month, in excess of 5%, both at $654/st.

Korea’s scrap steel price, currently at $150/mt, dropped significantly after a similarly sizable increase last month, with both the increase and subsequent drop in excess of 16%.

Chinese prices showed some strength, although not across the board. Most notably, Chinese HRC prices increased by 5% to around $600/mt, while steel billet increased over 3% to $551/mt.

The Stainless Steel Monthly Metals Index (MMI) declined this month, dropping by two index points to 69. A few of the prices in the basket registered fair declines, with nickel prices showing weakness.

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LME Nickel

The LME primary nickel 3-month price decreased nearly 8% over the course of April. While prices showed strength early in the year into March, prices faltered and began to trade sideways.

Source: MetalMiner analysis of FastMarkets

More recently, however, prices appear on a declining trend, which could indicate a pricing correction, rather than a shift in trend.

Source: MetalMiner analysis of FastMarkets

However, with negative volume still high — as indicated on the weekly chart of LME nickel prices with trading volume shown along the bottom — the correction remains in progress.

China’s Economic Performance Matters for Prices

The present global economic outlook could be characterized as uncertain in the face of ongoing trade talks between the U.S. and China.

After much press early in the year over China’s slower rate of growth, with forecasts shifted downward at the start of the year, the FXI — an index of large-cap Chinese companies — surprised the market with a show of strength.

Source: MetalMiner analysis of Yahoo.com data

Chinese stimulus measures helped bolster the economy’s performance. Recently, however, the boost seemed to lose steam; meanwhile, the FXI uptrend waned.

The U.S. Economy Grew in Q1; Some Sectors Lagged Behind

Economic indicators continue to fluctuate into 2019, for both the U.S. and China.

For example, while Q1 growth appeared stronger than expected in the U.S., construction spending and new home starts showed weakness in March, while new auto sales slowed this year. China’s performance remains mixed, with auto sales also weak there.

Domestic Stainless Steel Market

This month, the 304/304L-Coil and 316/316L-Coil NAS Surcharges dropped to $0.63 and $0.92 per pound, respectively, from $0.64/pound and $0.93/pound at the beginning of April.

What This Means for Industrial Buyers 

Downward-trending prices provide good news for industrial buyers, with stainless steel prices showing weakness this month overall.

For more detailed price guidance, request a free two-month trial to our Monthly Metal Buying Outlook.

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Actual Stainless Steel Prices and Trends

Stainless steel prices showed weakness, with price declines hitting the subindex.

In particular, LME nickel prices fell 7.9% month over month to $12,210 mt. Primary nickel prices in China and India fell by 3.5% and 5.8%, respectively, with Chinese primary nickel averaging $15,412/mt and Indian primary nickel averaging $12.49 per kilogram.

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Not surprisingly, the most alarmist headlines were run by the most biased of news channels: the BBC.

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Long advocates of left-wing sympathies, the Beeb — as the BBC is affectionately known in the UK — has for many years also been leading the charge on environmental issues. Not that we have any problem with having an environmental conscience — anyone watching the rapid the bleaching of the world’s barrier reefs can’t help but feel a part of themselves die in the process — but we would much rather see the BBC reporting on sound scientific data than listen to them pushing one political angle, like some mogul-backed, partisan media outlet.

So when a BBC article shouts “UK Parliament declares climate change emergency” you expect it is possibly hyperbole. What does the statement even mean, you may ask. Are we about to be inundated by a monsoon, fry in a heatwave, be washed away in a tsunami or blown away in a typhoon?

Apparently desperate to address something other than Brexit, the British government appears likely to commit the U.K. to an even tougher carbon emissions target than it already has — indeed, tougher than any other major economy in the world.

According to the Financial Times, the proposals build on the 2008 Climate Change Act, which targeted reducing emissions by 80% from 1990 levels by 2050. The U.K. is on track to achieve this, having made steady progress in the interim with emission levels falling more than 40% over the last 29 years.

But the last 20% will be the hardest if the U.K. seeks to achieve zero emissions. The rest of Europe has signed up to similar targets, but exempted certain key industries (such as agriculture, aviation and shipping).

True zero emissions represent a significant challenge, whatever politicians may say.

It will require a sweeping overhaul of energy use from homes to transport to even what we eat. It involves a pledge to phase out diesel and electric cars by 2040, quadruple energy supplies from low-carbon sources such as renewables and supplement a hydrogen economy where natural gas is currently used (80% of British homes are reliant on natural gas for heating and/or cooking).

Heavy carbon-emitting industries will have to adopt carbon capture technology, which has to date proved less than satisfactory and expensive to operate. Nevertheless, the government has already invested some limited funds in pilot projects and has undertaken to do more.

The tough ones will be aviation (an alternative to fossil-fueled jet engines is a long way off), shipping (which is moving to 0.5% low sulfur fuel but still remains a massive source of carbon emissions) and agriculture, which is probably the worst offender.

There is no known trick of science that stops a cow breaking wind and little that can be done about the acres of corn that need to be cultivated to feed that cow. The Committee on Climate Change acknowledges one of the biggest and hardest changes will be to humans’ diets. More plant-based and less animal- and fish-based protein would have a profound impact on carbon emissions but will take a fundamental shift in the wider population’s habits.

Still, some trends are in favor of the needed changes.

Electric cars are predicted to be cheaper to buy and run than petrol- or diesel-fueled vehicles by 2030 (if not before). Wind power is already said to be cheaper than natural gas, the Financial Times says, providing storage costs to achieve continuity are subsidized, but even that may cease to be necessary as battery technology improves and wind turbine costs continue to fall.

The committee’s report suggests the changes needed, spread over the next 20-30 years, need not be onerous or disruptive to growth; indeed, they may present significant opportunities for new technologies and for the industries that exploit these opportunities.

Whether the world has 30 years, none of us knows. The U.N. says we could have just 12 years to effect change before we reach a point of no return; they may, like the BBC, be trying to promote a project fear agenda to effect change (we really don’t know).

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In the meantime enterprising firms have the opportunity to develop new products and services to meet what is already becoming a relentless process of change.

Every cloud has a silver lining.

In the aftermath of the Section 232 tariffs on steel and aluminum going into effect in March 2018, we heard and read a lot about some of the largest American OEMs and their business challenges.

For example, Ford Motor Company’s claim that the tariffs cost the automaker $1 billion in profits last year.

But what’s not known or reported as much in the mainstream is what manufacturers have been doing to strategically mitigate tariff risk, or how their various business units and organizations put practices in place to hedge against that risk.

“We’re flexible, and we can move quickly now that we have started to qualify additional materials,” said Matt Marthinson, VP Supply Chain at JB Poindexter & Co., Inc. “So I like our chances much better than where we were just two years ago.”

A company like that has to be flexible — as a large-volume metals buyer, JB Poindexter is the largest truck manufacturer in the U.S. of Class 3 through Class 7 trucks, including the majority of UPS, FedEx, U.S. Postal Service, Penske and Ryder trucks across North America, according to Marthinson.

In a conversation with Lisa Reisman on our current podcast series, “The Maker-to-User Trend in the Time of Tariffs,” Marthinson lets listeners in on how an established transportation industry manufacturer with significant exposure to commodity risk views the tariff landscape, both now and into 2020.

Listen in!

According to his company bio, Matt Marthinson is the leader for the Supply Chain transformation initiative at JBPCO, which includes partnering with the business owners to consolidate and leverage spend across all business units. He has over 25 years of comprehensive business achievements and expertise in Lean Manufacturing Operations, Production Planning, Materials Management, Procurement, Transportation and Logistics, Sourcing and Supply Chain with Kaiser Aluminum, Honeywell, Alcoa and Hubbell Incorporated, most recently as vice president of strategic sourcing. Learn more here.

Maker-to-User in the Time of Tariffs: Background

After the U.S. Commerce Department’s Section 232 findings in early 2018, President Donald Trump took action — and the rest is history.

This new podcast series takes a closer look at the U.S. manufacturing landscape in our present time of trade tariffs, and how manufacturers themselves are affected by the tariffs (winners and losers).

For example, just over 90% of manufacturing industry respondents in a recent, informal MetalMiner poll indicated that the Trump tariffs have hurt their respective businesses, via increased material costs, inventory woes and longer lead times, among other effects.

However, other manufacturers — for example, Honda — have posted healthy profits over the last year.

Want to a see Cold Rolled price forecast? Get two monthly reports for free!

Ultimately, we’re interested in what all of this means for the “maker-to-user” trend that we’ve seen gain steam the past several years.

For an excellent primer on the “maker-to-user” movement and trends, download our free white paper on the topic here.

Listen to more episodes and follow the MetalMiner Podcast here.

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This morning in metals news, the Republic of Congo made its first export of iron ore, Korean steelmaker POSCO says elevated iron ore prices will put a damper on steel margins this year and global aluminum production in March hit 5.4 million metric tons.

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Republic of Congo Makes First Iron Ore Export

The Republic of Congo last week made its first shipment of iron ore, S&P Global Platts reported.

The shipment of 22,000 metric tons of iron ore is headed for a Chinese steel mill, according to the report.

Rising Iron Ore Prices to Impact Steel Margins

The price of the steelmaking material iron ore has received several supply-side boosts of late, particularly related to events in Brazil at Vale’s operations and from recent tropical cyclones in Australia.

As such, Korean steelmaker POSCO expects elevated iron ore and coking coal prices to hamper steel margins this year, the Australian Financial Review reported. According to the report, POSCO expects iron ore to trade between $82-$87 per ton for the remainder of the financial year.

March Aluminum Production

The International Aluminum Institute released monthly aluminum production figures Tuesday, showing global production in March hit 5.4 million metric tons.

The March total marked an increase from the 4.9 million metric tons in January, but was down on a daily average basis.

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Production in China hit 3.1 million metric tons, up from 2.8 million metric tons in February.

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Amidst the trade tension that exists between the United States and India, now comes a report that India’s steel exports to the U.S. last year fell by a whopping 49%.

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On the other hand, exports of Indian aluminum went up by 58%.

The report by the independent Congressional Research Service (CRS), which said the value of Indian steel exports to U.S. was down to U.S. $372 million but aluminum was up to $221 million.

The U.S. had imported steel and aluminum products totaling $29.5 billion and $17.6 billion, respectively, in 2018.

Quoting from the CRS report, the Hindu Business Line said the countries to see the largest declines in the value of their steel exports to the U.S. were:

  • South Korea (-$430 million, -15%)
  • Turkey (-$413 million, -35%)
  • India (-$372 million, -49%)

There were major increases in imports from the European Union (+$567 million, +22%), Mexico (+$508 million, +20%) and Canada (+$404 million, +19%).

According to the CSR, the countries seeing the largest declines in their export totals to the U.S. were:

  • China (-$729 million, -40%)
  • Russia (-$676 million, -42%)
  • Canada (-$294 million, – 4%)

Major increases were from:

  • the E.U. (+$ 395 million,+9%)
  • India (+$ 221 million,+58%)
  • Oman (+$186 million, +200%).

Last year, U.S. President Donald Trump decided to impose blanket tariffs on steel and aluminum imports, which applied to India, as well as other countries (such as China). India then proposed retaliatory tariffs against U.S. agricultural products, including apples and lentils, which experts believed would have had an adverse impact on American exports worth nearly U.S. $900 million.

However, India has continued to defer with respect to this option.

The U.S. president had given temporary exemption to several countries from the tariffs pending negotiations. Later, permanent tariff exemptions in exchange for quantitative limitations on U.S. imports were announced covering steel for Brazil and South Korea, and both steel and aluminum for Argentina.

The latest CRS report pointed out that one of the U.S.’s major concerns was overcapacity in steel and aluminum production led by China.

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The U.S. had imposed extensive anti-dumping and countervailing duties on Chinese steel imports to counter the latter’s unfair trade practices, but experts believe the size of Chinese production continues to depress prices globally, according to the CRS report.