The U.S. Department of Commerce. qingwa/Adobe Stock

This morning in metals news, the U.S. Department of Commerce announced rulings in investigations of stainless steel kegs from China and Germany, copper prices rose on labor tensions in Chile, and the UAW’s strike continues as it mulls ratification of a tentative deal with General Motors reached last week.

Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.

DOC Makes Final Determinations on Stainless Steel Keg Imports

The U.S. Department of Commerce on Friday announced it had made affirmative final determinations in its anti-dumping and countervailing duty investigations of imports of stainless steel kegs from China and Germany.

The DOC determined the countries sold the kegs at less than fair values, ranging from 0 to 77.13% and 7.47%, respectively.

The DOC also determined that exporters from China received countervailable subsidies at rates ranging from 16.21% to 145.23%.

Copper Rises on Chile Labor Developments

LME copper reached a one-month high amid strikes at Chilean copper mines operated by Antofagasta and Teck Resources, Reuters reported.

LME three-month copper rose as much as 0.5% Monday, Reuters reported, up to $5,837.50 per ton.

GM Awaits UAW Vote on Deal

Last week, General Motors and the United Auto Workers (UAW) union announced they had reached a tentative deal that could potentially end the strike that has lingered for well over a month.

However, the strike continues, for now, as UAW members must vote on the deal.

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If the deal is approved, talks will then shift to Ford and Fiat Chrysler, the Detroit Free Press reported.

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U.S. housing starts in September dropped 9.4% compared with the previous month, according to the U.S. Census Bureau and the Department of Housing and Urban Development.

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According to the joint report, housing starts in September reached a seasonally adjusted annual rate of 1.26 million, down from August’s 1.39 million. The September rate, however, was up 1.6% on a year-over-year basis.

Single‐family housing starts in September were at a rate of 918,000, marking a 0.3% increase from the previous month. Meanwhile, for units in buildings with five units or more, the September rate reached 327,000.

As for building permits, housing units authorized in September reached a seasonally adjusted annual rate of 1.39 million, down 2.9% from August but up 7.7% on a year-over-year basis. Single‐family authorizations in September checked in at at a rate of 882,000, marking a 0.8% increase from August, while authorizations of units in buildings with five units or more came in at a rate of 470,000.

Privately owned housing completions checked in at a rate of 1.14 million in September, which marked a 9.7% decrease from August and a 1.0% decrease from September 2018.

Single‐family housing completions were down 8.6% in September compared with the previous month, while completions for units in building in five units or more reached a rate of 285,000.

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Late last month, the National Association of Realtors reported pending home sales increased 1.6% in August.

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Before we head into the weekend, let’s take a look back at the week that was and some of the coverage here on MetalMiner, including coverage of global steel demand, Trafigura’s bet on cobalt, electric vehicles and a potential detente in the General Motors–UAW saga.

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• Glencore signed a cobalt supply deal with Chinese firm GEM Co. Ltd. 
• India’s steel producers remain concerned about imports as the country considers joining the Regional Comprehensive Economic Partnership (RCEP).
• Global steel demand is forecast to rise 3.9% this year, according to the World Steel Association’s Short Range Outlook.
• Commodity trading company Trafigura is looking to invest in cobalt.
• Register for MetalMiner’s free Oct. 24 webinar on manufacturing and how manufacturers in today’s labor climate can find the right talent.
• The challenging electric vehicle (EV) market claimed a victim.
• India is a net copper importer for the first time in 18 years.
• General Motors and UAW reached a tentative agreement after more than a month of workers on the picket lines.
• Vale reported third-quarter iron ore fines production increased 35.4% compared with second-quarter production.

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This morning in metals news, an upcoming MetalMiner webinar will explore the challenges manufacturers face in talent acquisition, the nickel price continues to fall after a hot summer and miner BHP released its production results for the quarter ending Sept. 30.

Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.

Webinar to Explore Manufacturing ‘Skills Gap’

If you haven’t already done so, there’s still time to sign up for MetalMiner’s free Oct. 23 webinar, “The War For Contractor Talent: How Manufacturers Can Find the Workers They Need (and Fast).”

The webinar is free to attend, but registration is required.

MetalMiner Executive Editor Lisa Reisman will be joined by Matt Runfola, founder of the Chicago Industrial Arts and Design Center, and Brett Armstrong, director of business development at Avetta.

Nickel Price Slides

It was a hot summer for nickel, which surged from below $12,000 per ton in June to nearly $18,500 per ton in early September, according to MetalMiner IndX data.

However, the nickel price has started to come back down to earth over the last six weeks.

The three-month LME nickel price reached $16,260/mt as of Friday, down 4.07% on a month-over-month basis.

BHP Releases 3Q 2019 Results

Miner BHP released its quarterly production results for the quarter ending Sept. 30, showing copper production fell 3% from the previous quarter due to planned maintenance.

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Meanwhile, metallurgical coal and energy coal production fell 21% and 24%, respectively.

“We delivered a solid start to the 2020 financial year through ongoing strong operational performance across our portfolio,” BHP CEO Andrew Mackenzie said. “While Group production for the quarter decreased slightly due to the expected impacts of planned maintenance and natural field decline in Petroleum, guidance remains unchanged and we are on track to deliver slightly higher volumes than last financial year. The South Flank iron ore project is 50 per cent complete, with all our major projects on schedule and budget. We achieved further encouraging exploration results in Petroleum and at the Oak Dam copper prospect.”

Brazilian miner Vale recently unveiled its third-quarter production and sales figures, showing a strong quarter for the company’s iron ore operations.

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Vale’s iron ore fines production totaled 86.7 million tons in the third quarter, up 35.4% from the previous quarter. The increase was powered in part by the resumption of operations at Brucutu and the partial resumption of dry processing operations at the Vargem Grande Complex.

“Vale expects to resume the remaining production of approximately 50 Mt by 2021, as several milestones were achieved and others are ongoing, including the approval of trigger tests on the mines to resume dry processing operations and the authorization of trigger tests at the TFA Rail Terminal (Terminal Ferroviário de Andaime), an important step toward debottlenecking the Vargem Grande Complex logistics,” Vale said in its production release.

Vale expects to recover lost production stemming from the January tailings dam collapse in Brumadinho over the next two years. The miner expects to recover approximately 30 million tons of production “with 7 Mt coming from the resumption of the dry processing operations at the Vargem Grande Complex in 2019 and the remaining from Fábrica, Timbopeba dry processing operations and others.”

The remaining production is expected to return in 2021, mainly from wet processing operations at Timbopeba and Vargem Grande Complex.

Meanwhile, Vale’s pellet production reached 11.1 million tons in Q3, up 22.7% from Q2. Last month, Vale revised its pellets production guidance down to 43 million tons from previous guidance of 45 million tons.

Last month, the miner announced investment plans for the communities impacted by the fatal tailings dam collapse in January at its Corrego do Feijao mine.

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The miner announced plans to invest R$190 million in the communities of Macacos, Barão de Cocais and Itabirito.

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This morning in metals news, China wants the U.S. to remove tariffs before a final trade deal can be reached, U.S. Steel announced it would offer $300 million in senior convertible notes and Alcoa released its third-quarter financial results.

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China: Remove Tariffs for Final Trade Deal

As trade talks between the U.S. and China continued with another round of top-level negotiations last week, China indicated that tariffs must be removed in order for a final deal to be reached, CNBC reported.

“Both sides’ ultimate goal for the negotiations is to end the trade war, cancel all additional tariffs,” Ministry of Commerce spokesman Gao Feng was quoted as saying. “This is good for China, good for the U.S. and good for the world.”

U.S. Steel to Offer $300M in Convertible Notes

U.S. Steel announced Tuesday that it plans to offer $300 million in senior convertible notes “in a private offering made only to persons reasonably expected to be qualified institutional buyers.”

“U.S. Steel intends to use the net proceeds from the offerings for general corporate purposes, including, without limitation, for previously announced strategic investments and capital expenditures,” the steelmaker said.

Alcoa Releases 3Q Financial Results

Bauxite, alumina and aluminum producer Alcoa announced a net loss of $221 million in the third quarter of 2019, compared with a net loss of $402 million in Q2 2019.

The firm reported an adjusted net loss, excluding special items, of $82 million for the third quarter.

“In the third quarter, Alcoa reported adjusted EBITDA excluding special items of $388 million, down $67 million from the prior quarter, primarily due to lower alumina pricing that was partially offset by higher alumina sales volume and lower production costs,” the company said.

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In addition, third-quarter revenues of $2.6 billion were down 5% from the previous quarter “primarily due to lower alumina prices,” the company said.

GM workers month went on a nationwide strike, the first since 2007 at the Big 3 automaker. Photo by Jeffrey Sauger for General Motors

General Motors and the United Automobile Workers (UAW) union have reached a tentative agreement that would end the strike that has run for over four weeks.

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“We just reached a Tentative Agreement with GM a short time ago, today, Wednesday, October 16, 2019,” UAW Director and Vice President Terry Dittes wrote in a statement posted on the UAW website Wednesday. “We will go over the details when the Council meets tomorrow morning in Detroit.

“On behalf of the entire staff here in Negotiations, we want to thank you for your support.

“In the meantime, continue the picket lines until after the UAW-GM National Council concludes business tomorrow, Thursday, October 17, 2019, and then you will receive further instructions.”

The nationwide strike — GM’s first since 2007 — included approximately 46,000 workers.

“We can confirm the UAW’s statement regarding a proposed tentative agreement,” the automaker said in a statement on its website. “Additional details will be provided at the appropriate time.”

From Sept. 13, the last trading day before the strike, GM’s shares had fallen nearly 13% by Oct. 8. Since then, GM shares have recovered, paring losses since Sept. 13 to 5.7%.

According to several analyst estimates, the strike has cost the Big 3 automaker more than $1 billion, CNBC reported.

Among the list of grievances brought by UAW were fair wages, health care costs and a pathway for temporary workers to become permanent.

“We stood up for General Motors when they needed us most,” Dittes said on Sept. 15. “Now we are standing together in unity and solidarity for our Members, their families and the communities where we work and live.”

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Once a deal is ratified, the union will move to securing deals with the other Big 3 automakers, Ford and Fiat Chrysler.

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This morning in metals news, Rio Tinto released its third-quarter production figures, India has proposed an anti-dumping duty on flat-rolled steel from China and other countries, and copper prices dropped after a strike was averted at Chile’s Antofagasta.

Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.

Rio Tinto Posts Strong Third Quarter

Miner Rio Tinto posted third-quarter iron ore production of 87.3 million tons, marking a 6% increase on a year-over-year basis and a 10% increase compare with Q2 2019.

Bauxite production increased 9% year over year, while aluminum production fell 3%.

“We have delivered improved production across the majority of our products in the third quarter, with a solid result at our Pilbara mines driving increased sales of iron ore into robust markets,” Rio Tinto CEO J-S Jacques said. “Our strong value over volume approach, coupled with our focus on operational performance and disciplined allocation of capital, will continue to deliver superior returns to shareholders over the short, medium and long term.”

India Proposes Anti-Dumping Duty on Chinese Flat-Rolled Steel

The Indian government Tuesday proposed a new flat-rolled steel anti-dumping duty on imports from China, Vietnam and South Korea, Reuters reported.

The duty, once implemented, will be effective for six months, according to the report.

Copper Drops on Antofagasta News

After Chilean copper miner Antofagasta reached a new 36-month contract with laborers at its Los Pelambres mine, copper prices moved downward, Reuters reported.

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Three-month LME copper dipped 0.2% Wednesday to $5,764 per ton, according to the report.

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This morning in metals news, the U.S. steel sector’s capacity utilization rate inched down another tenth of a percentage point, the U.S. raised its steel tariffs on Turkey to 50% and Chinese iron ore futures fell Tuesday.

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U.S. Steel Capacity Utilization Rate Falls to 80.3%

The U.S. steel sector’s capacity utilization rate for the year through Oct. 12 reached 80.3%, down from 80.4% the previous week.

Steel production for the year through Oct. 12 reached 76.1 million tons, up 2.9% on a year-over-year basis.

Trump Raises Turkey Steel Tariffs

In yet another turn in U.S.-Turkey relations, President Donald Trump signed an executive order halting trade negotiations with Turkey and raising the tariff on Turkish steel imports to 50%.

Last year, the Trump administration raised its Section 232 steel tariff on Turkish steel to 50% amid a row over Turkey’s detention of American pastor Andrew Brunson; the U.S. eventually brought the tariff back down to the standard 25% rate.

However, after the U.S. announced a withdrawal of its forces from Syria, followed by Turkey’s military offensive in the region, Trump released a statement announcing the U.S. would sanction Turkish government officials and “any persons contributing to Turkey’s destabilizing actions in northeast Syria.”

Chinese Iron Ore Futures Down Amid Vale Production Uptick

Chinese iron ore futures dropped to an over two-week low amid Brazilian miner Vale’s announcement of elevated third-quarter production, Reuters reported.

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The most-traded iron ore contract on the Dalian Commodity Exchange fell 1.2% on Tuesday, down to 644 yuan ($91.05) per ton, according to the report.

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This morning in metals news, the U.S. and China are working toward a partial trade deal, the largest copper mine in Ecuador has curbed operations amid protests and China’s copper imports hit an eight-month high.

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U.S., China Talks Could be Working Toward Partial Deal

As with anything else, there are two sides to every story.

While a wider understanding on trade between the U.S. and China is still far off, the two countries appeared to have made some progress toward a partial trade deal.

According to Reuters, the U.S. agreed to delay a scheduled October tariff increase, and Treasury Secretary Steven Mnuchin said the two countries have a “fundamental understanding” on many of the critical issues.

However, the deal is far from done. In addition, comments from the Chinese side were far less effusive than those of President Donald Trump.

“We have made substantial progress in many fields. We are happy about it. We’ll continue to make efforts,” Vice Premier Liu He was quoted as saying.

Ecuador Protests Impact Copper Activity

Ecuador’s largest copper mine has curbed its activity amid protests in the country, Bloomberg reported.

Protestors rallied against a proposed fuel price hike, ordered by the government in an effort to secure a loan from the IMF.

China Copper Imports Jump

F0r those of the mind that copper indeed lives up to its “Dr. Copper” moniker, China’s consumption is a critical piece of the copper puzzle.

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According to Reuters, China’s copper imports surged 10.15% in September on a month-over-month basis to its highest level in eight months.