Industry News

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This morning in metals, the European Union has seen its level of imports surge in 2018, a Republican Senator has unveiled a bill that seeks to check the president’s authority on tariffs and the E.U. plans to impose tariffs on the U.S. next month.

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EUROFER Links U.S. Tariffs With Import Rise

In light of the U.S.’s decision to impose its aluminum and steel tariffs on the E.U. (after the deadline on the 28-member bloc’s temporary exemption came and went June 1), the European Steel Association (EUROFER) says the E.U.’s steel exports have jumped 8% this year, Reuters reported.

The association argues that the import surge is directly attributable to the redirecting of supplies into Europe (as a result of the U.S.’s Section 232 tariffs).

“The European steel industry condemns the US import tariffs on steel. This protectionist trade action is absurd – it hits the US’ own allies hardest,” said Geert Van Poelvoorde, president of EUROFER, in a release Thursday. “We also now expect to face a large loss of market share in the US, a market that accounts for 16% of EU exports.”

Corker Introduces Bill to Check President’s Tariff Authority

It has been a big year for tariffs in the world of metals, an arena in which the office of the president has quite a bit of power.

Sen. Bob Corker (R-Tenn.), however, has introduced a bill that would seek to limit the president’s power with respect to tariffs, the Washington Post reported.

According to the bill, the president would have to win congressional approval if he plans to enact tariffs on the grounds of national security, the Post reported.

E.U. Plans Retaliatory Tariffs

The E.U. will slap $3.3 billion in tariffs on U.S. goods next month, according to a CNN report.

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E.U. Trade Commissioner Cecilia Malmstrom called the U.S. steel and aluminum tariffs “unilateral and illegal,” according to the report.

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

The U.S. Department of Commerce announced Wednesday that it made a final affirmative determination in its anti-dumping investigation of stainless steel flanges from China.

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According to a release, Commerce determined Chinese exporters sold the product at 257.11% less than fair value.

Imports of the stainless steel flanges from China in 2017 amounted to 2,964 metric tons and were valued at $21.8 million, according to the DOC. The 2017 import total marked a 20.8% increase from the 2,454 metric tons imported from China in 2016.

The Coalition of American Flange Producers and its individual members — Core Pipe Products, Inc. (Carol Stream, Illinois) and Maass Flange Corporation (Houston, Texas) — were the petitioners in the case (the petitions were filed in August 2017).

The DOC assigned the rate specifically to China’s Shanxi Guanjiaying Flange Forging Group Co., “based on adverse facts available due to the respondent’s failure to provide complete responses to certain sections of Commerce’s questionnaire.” Similar reasoning was made for the China-wide rate — also 257.11% — which several other companies fall under. The DOC fact sheet on the probe also names the following Chinese firms: Hydro-Fluids Controls Limited; Songhai Flange Manufacturing Co., Ltd.; and Dongtai QB Stainless Steel Co., Ltd.

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The case now moves to the U.S. International Trade Commission. If that body also rules in the affirmative, the DOC will issue an anti-dumping duty order. A decision is expected by July 19.

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This morning in metals news, Chinese steel exporters are looking for new destinations for their products, U.S. Steel is planning on restarting another Illinois blast furnace and steel production is up 1.9% in the year to date.

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Looking For Buyers

On the heels of U.S. trade actions, Chinese steelmakers are looking to find buyers in Africa and South America for their products, Reuters reported.

According to the report, Chinese exports to markets like South Korea and Vietnam have dropped by double digits since last year.

U.S. Steel to Restart Another Blast Furnace in Illinois

After an announcement of the restarting of a blast furnace earlier this year, on Tuesday U.S. Steel announced plans to restart another blast furnace at its Granite City plant in Illinois, MarketWatch reported.

The steelmakers plans to have the furnace up and running by Oct. 1, bringing on 300 more workers in the process, according to the report.

Steel Production on the Rise

U.S. steel production for the year to date is up 1.9%, the Times of Northwest Indiana reported, citing American Iron and Steel Institute (AISI) data.

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For the week ending June 2, production was up 0.76% from the previous week, according to the report.

The recent AI Summit at the White House brought together industry figures in the world of artificial intelligence (AI), a term that has no doubt picked up momentum from something as the province of a futuristic, far-off world to something more nearly attainable.

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According to a White House release, the summit last month included “more than 100 senior government officials, technical experts from top academic institutions, heads of industrial research labs, and American business leaders who are adopting AI technologies to benefit their customers, workers, and shareholders.”

When thinking of AI, many conjure up images of intelligent robots or programs like IBM’s Watson (which, if you’ll remember, grew in prominence after competing against “Jeopardy!” champions in 2011).

But what about applications for AI in the metals industry? Well, who better to ask than CEO Stephen Pratt, who worked on the IBM computer system and now works with companies like Big River Steel to streamline manufacturing processes with the power of AI.

Based in Osceola, Arkansas, Big River Steel teamed up with — founded in 2016 and headquartered in San Francisco — in what they billed the world’s first “learning” steel mill.

In a recent phone conversation with MetalMiner, Pratt talked about his background, the founding of, the partnership with Big River Steel and the future of AI.

Read more

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This morning in metals news, Mexico hits back against the U.S.; tariffs aren’t good for relationships with allies, the Aluminum Association’s CEO says; and the E.U. could impose steel and aluminum safeguard measures as early as July.

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Mexico Hits Back

Retaliation on the heels of the U.S.’s decision to allow for the expiration of the temporary tariff exemptions for the E.U., Canada and Mexico is something that was expected.

Mexico did just that, placing tariffs on steel products and farm products, according to an NPR report.

According to the report, the steel products on the list are steel plates, bars and rods, and rolled steel.

Tariffs Don’t Make Friends

The Aluminum Association, the industry group representing American aluminum, has consistently expressed over the last year that any trade remedies vis-a-vis aluminum should focus primarily on Chinese overcapacity and should not harm market-economy trading partners.

Heidi Brock, CEO of the Aluminum Association, told NPR’s Rachel Martin that the tariffs could alienate the U.S. from its allies.

“In our view, illegally subsidized Chinese overcapacity is the problem,” Brock told NPR. “Tariffs and quotas on market economies really, in our concern, would be ultimately alienating allies that we need to help us on that problem.”

Needless to say, based on rhetoric since June 1 from the E.U., Canada and Mexico, it seems like that alienation has already begun to take shape.

Meanwhile, in Europe…

Speaking of retaliation, the E.U. could be set to do just that in the near future.

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E.U. Trade Commissioner Cecilia Malmstrom told Reuters that steel and aluminum safeguard measures could be instituted next month.

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This morning in metals news, Canada is searching for its response to the expiration of its exemption from the U.S.’s steel and aluminum tariffs; President Trump’s top economic adviser said Canadian President Justin Trudeau is “overreacting” to the news; and copper rises as negotiations begin at BHP’s Escondida mine in Chile.

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Canada Considers Options to Aid Domestic Industry

On the heels of the expiration of Canada’s temporary exemption from the U.S.’s steel and aluminum tariffs, the country is considering ways to lessen the blow for its domestic industry.

According to a Reuters report, Canada is considering aid for its domestic steel and aluminum industry, similar to what it offered its softwood lumber industry on the heels of a U.S. tariff on that product last year.

Kudlow: Trudeau Is ‘Overreacting’

Larry Kudlow, Trump’s top economic adviser, said Canadian President Justin Trudeau was “overreacting” on the heels of the tariffs expiration, according to a Washington Post report.

“These tariffs may go on for a while or they may not,” Kudlow was quoted as saying.

Copper Price Rises

Labor negotiations at the world’s largest copper mine and a weakening dollar contributed to a rise in the copper price, Reuters reported.

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According to the report, the price rose to its highest level since May 23.

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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 stories here on MetalMiner:

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This morning in metals news, the U.S. finally slapped its Section 232 tariffs on the European Union, Canada and Mexico; China says it is ready to defend itself should a trade war transpire; and copper falls to a three-week low.

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Tariffs Finally Hit E.U., Canada, Mexico

Last month, the U.S. granted a 30-day extension with respect to the temporary exemptions from the Section 232 tariffs for the E.U., Canada and Mexico.

With the new June 1 deadline approaching, many wondered what would happen, as NAFTA negotiations seem to have stalled and various European political and business leaders have declared they were preparing themselves for the tariffs.

The answer came this morning, when the U.S. announced it would apply the tariffs of 25% on steel and 10% for aluminum on the 28-member European bloc and its NAFTA peers Canada and Mexico.

Reactions came in quickly on the heels of the announcement.

“There is evidence the Section 232 strategy is working as the Trump administration moves ahead with its steel and aluminum trade actions. American smelters and steel mills are reopening, which means more jobs and added capacity. And more pressure is being applied by our allies to China on steel dumping and overcapacity,” said Scott Paul, president of the Alliance for American Manufacturing, in a release. “Looking ahead, the product exclusion process must be reasonable, and narrow enough so that it does not undermine the intent of the relief. The goals of restoring American industries to a sustainable operating domestic capacity and protecting national security must remain paramount.”

The Aluminum Association expressed disappointment in the scope of the announcement, as it has held the line that trade actions must be focused on Chinese overcapacity and not market-economy trading partners.

“Today’s action does little to address the China challenge while potentially alienating allies and disrupting supply chains that more than 97 percent of U.S. aluminum industry jobs rely upon,” said Heidi Brock, president and CEO of the Aluminum Association, in a release. “During a time of record demand for aluminum in the United States, it is critical that aluminum producers across the value chain have a steady and reliable source of supply. While this is an unfortunate outcome, the Aluminum Association will continue its dialogue with the administration on our shared goal of a healthy and sustainable U.S. aluminum industry.”

China Foreign Ministry Spokeswoman: China Will Never ‘Recoil From a Trade War’

Addressing the White House’s announcement Tuesday of intentions to impose investment restrictions and $50 billion in tariffs on Chinese goods, China Foreign Ministry Spokeswoman Hua Chunying said that although China does not want a trade war, it will defend itself if necessary.

“China always maintains that we should properly resolve and address relevant differences over economic and trade issues through equal-footed dialogue and consultations in a constructive manner,” she said during a press conference Wednesday. “This serves the fundamental and long-term interests of our two countries and peoples, and meets the shared aspirations of the international community. Once again, we don’t want a trade war, but will never quail or recoil from a trade war. One move can always be countered by another. If the US is bent on having its own way, we will surely take firm and forceful measures to safeguard our legitimate rights and interests.”

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Copper Prices Fall

The copper price fell as U.S.-China trade tensions have rattled investors — according to Reuters, LME copper hit a three-week low on Wednesday.

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The World Steel Association (worldsteel) 2018 World Steel in Figures report offers a sweeping view of the industry, including historical data on steel production, apparent steel use and more.

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The report, released on Tuesday, is part of what can be seen as a generally positive time for global steel.

“I am hopeful that our positive outlook for steel demand will remain,” said Edwin Basson, director general of worldsteel, in a release. “The Short Range Outlook for the next 18 months suggests 2018 growth of 1.8% followed by 0.7% in 2019. Steel demand is benefitting from the broad and favourable global economic momentum affecting both the developed and developing world at the same time. The worldsteel programmes in the automotive, construction, packaging and rail sectors all aim to maintain the role of steel as a versatile product without which modern society cannot remain sustainable.”

Going back to 1950, the report shows the rise of global crude steel production. In the last 17 years alone, global crude steel production has nearly doubled.

Source: World Steel Association

In Basson’s foreword to the report, he referred obliquely to rising trade tensions around the world.

“To say that the steel industry is experiencing interesting times would be an understatement,” Basson wrote. “However, progress is being made at various levels. At the recent meeting of the Global Forum for Steel Excess Capacity (GFSEC), a G20 initiative, six important principles were agreed by ministers of G20 countries. All are focused around ensuring that a level playing field should exist for steelmakers in all countries and that markets should remain free and fair for steel to be traded between countries.”

According to the report, in 2017 the top crude steel producers were (with tonnage, in millions, in parentheses):

  1. ArcelorMittal (97.03)
  2. China Baowu Group (65.39)
  3. NSSMC Group (47.36)
  4. HBIS Group (45.56)
  5. POSCO (42.19)

By country, China’s share of steel production has jumped significantly from 2007 to 2017, rising from 36.3% to 49.2%. The NAFTA bloc’s share declined from 9.7% to 6.8%. The European Union’s share also dropped, from 15.6% to 10.0%

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The full worldsteel report can be downloaded here.

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This morning in metals news, the clock is ticking on the E.U.’s temporary exemption from the U.S.’s steel and aluminum tariffs, global steel output is up, and Germany gets ready for the tariffs to go into effect Friday.

Tariff Exemption Deadline June 1 Draws Near

The European Union was granted a 30-day extension to its temporary exemption from the Section 232 steel and aluminum tariffs late last month — less than 24 hours before they were set to go into effect — but that pushed-back deadline is approaching at the end of this week.

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Nonetheless, according to a report by the Financial Times, U.S. Secretary of Commerce Wilbur Ross said negotiations can still continue even if tariffs are in place, as Ross pointed to the example of China, on which the tariffs have already gone into effect.

Germany Prepares For Tariffs

Speaking of Europe, Germany is preparing for the tariffs to go into effect, according to a Reuters report.

According to a German economy ministry spokesman, as quoted by Reuters: “As far as I know it is in the night (going into) June 1. As far as I know, they (the tariffs) would automatically take effect.”

Global Steel Output Rises

Global crude steel output in April was up as winter cuts in China are in the rear view mirror, according to a Zacks report.

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According to the report, Chinese production rose 4.8% year over year.