Industry News

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This morning in metals news, European Commission President Ursula von der Leyen said a trade deal with the U.K. will be “impossible” by the end of the year, the Chilean government won’t offer funds to help copper producer Codelco make needed upgrades and state regulators in Indiana say ArcelorMittal has been manipulating test results on the heels of a toxic spill last year.

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U.K., Europe talk trade as Brexit approaches

With the U.K. set to exit the E.U. at the end of January, attention is moving to what happens next — particularly with respect to trade.

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This morning in metals news, the United States-Mexico-Canada Agreement (USMCA) received a bipartisan push from the Senate Finance Committee, average retail gasoline prices in 2019 were down compared with the previous year and iron ore futures in China reached an over five-month high.

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Senate committee gives USMCA approval

The United States-Mexico-Canada Agreement (USMCA) inched closer to ratification when the Senate Finance Committee overwhelmingly voted in favor of it Tuesday.

The White House and House Democrats reached an agreement on a revised version of the USMCA late last year; however, the deal must still be ratified with a vote in the Senate.

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This morning in metals news, the U.S. steel sector posted a capacity utilization rate of 82.0% to start the new year, copper prices made gains Tuesday and the Port Talbot steelworks’ losses continue to trouble Tata Steel.

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As we head into not just a new year but a new decade, we could be forgiven for thinking we are in much better shape than we were a year ago.

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The British have overwhelmingly affirmed their intent to leave the European Union on Jan. 31. While the terms of any deal with Europe will not be known for another year, the firm departure date of Dec. 31, 2020 — with or without a deal — at least suggests we will not have the can-kicking of the last three-plus years.

Meanwhile, America’s trade war with China is showing some signs of thawing. A little progress has been made in terms of a phase one deal, in which the Trump administration refrained from imposing a new tranche of tariffs that was set to start in December and decided to halve its current 15% tariff rates imposed on $120 billion of Chinese products. In return, China is said to have agreed to substantially increase agricultural purchases, a move that would benefit American farmers who have been bearing the brunt of the trade war.

But according to some sources, the phase one deal will be unlikely to contribute to a sharp reduction of tension in their relations because it leaves unresolved some key issues that have been at the heart of the trade war, such as intellectual property rights and state subsidies.

According to The Times this week, America’s stock markets were buoyed in the second half of 2019 by three interest rate cuts in quick succession made by the U.S. Federal Reserve. Since September, the central bank has also injected hundreds of billions of dollars into short-term money markets to ease a squeeze on lending.

Central banks’ ability, however, to add further support in 2020 is limited.

The Fed is expected to possibly add one more rate cut. However, in Europe, rates are at rock bottom or already negative; further fiscal stimulus would have to come from governments, not central banks.

Both Europe and the U.S. would benefit from investment in infrastructure. There are some signs a loosening of the purse strings may occur in the U.K. and the Netherlands, but Germany is the kingmaker (at least in Europe). Although more conciliatory noises have been emanating from the German Federal Ministry of Finance, it seems unlikely Germany is going to boost E.U. growth by dropping its balanced budget policy, however beneficial that would be for both Germany and the rest of the E.U.

Despite comments that China’s manufacturing picked up in November, there seems little doubt growth is slowing in the world’s second-biggest economy.

An article in The Telegraph quotes Fathom Consulting predictions of a real growth rate closer to 4% in 2020, regardless of what the official figures may report. The expectation is China will add stimulus next year in order to sustain growth and avoid recession, but CRU predicts most of the fiscal aid will come from government spending (unlike in 2019, when it came from tax cuts).

In the long run, this wouldn’t be good news because China already has a debt mountain of more than 250% of GDP. Corporate and household debt have soared rapidly and, while not an immediate threat, poses a longer-term risk to the economy as the population ages and the country’s ability to fund that debt comes under strain.

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

2020 holds a number of risks, but the optimist in us should suggest the November U.S. presidential elections could be a spur to achieve trade solutions with China and Europe that could see less volatility and uncertainty among the major economies.

Risks will remain, but fundamentally the global economy has more positives than negatives.

While some have been predicting an end to the bull market and a looming recession, we remain optimistic that 2020 will see continued growth.

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This morning in metals news, U.S. raw steel production in 2019 increased 1.9% over 2018, Rio Tinto announced plans to resume operations at its Richards Bay Minerals site in South Africa and the U.S. Department of Commerce made an affirmative preliminary antidumping duty determination related to collated steel staples from China.

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U.S. raw steel production rises 1.9% in 2019

U.S. raw steel production in 2019 (through Dec. 28) totaled 96.3 million tons, marking a 1.9% year-over-year increase, according to the American Iron and Steel Institute (AISI).

Capacity utilization rate for the period in question reached 80.2%, up from 78.2% for the same period in 2018.

Rio Tinto to resume operations at Richards Bay Minerals

Miner Rio Tinto recently announced plans to resume its operations at its Richards Bay Minerals site in South Africa.

“Rio Tinto has today started the process of resuming operations at Richards Bay Minerals (RBM) in South Africa,” Rio Tinto said. “This follows discussions led by the Premier of KwaZulu-Natal, Sihle Zikalala, involving all stakeholders focused on securing stability in order to address the issues in the community and provide the stable environment necessary for RBM to resume operations.

“A phased restart is now in progress across the operation, with RBM expected to return to full operations in early January, leading to regular production in early 2020. Rio Tinto is contacting customers who were advised of a force majeure in their supply that this has now been lifted. Rio Tinto will review the restart of the Zulti South project after normalisation of operations at RBM.”

Rio Tinto said titanium dioxide slag production for 2019 is expected to fall at the lower end of its previous forecast of between 1.2 million and 1.4 million tons.

DOC announces antidumping duty determination on collated steel staples

The U.S. Department of Commerce (DOC) issued a preliminary antidumping duty determination related to imports of collated steel staples from China.

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

According to the DOC, the product in question has been dumped into the U.S. at a margin of 301.64%.

Imports of collated steel staples from China amounted to a value of $88.8 million in 2018, according to the DOC.

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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 metals storylines here on MetalMiner:

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Breaking a long stretch of growth, global steel production has been on the decline over the last few months.

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After falling 0.6% and 3.1% on a year-over-year basis in September and October, respectively, global production fell 1.0% in November, according to the World Steel Association.

Production in November totaled 147.8 million tons from the 64 countries reporting data to the World Steel Association.

After declining in October by 0.6%, China’s November steel production jumped 4%, with 80.3 million tons produced.

Elsewhere in Asia, India produced 8.9 million tons, marking a 2.8% year-over-year decline. Japan’s production totaled 7.7 million tons, down 10.6%. South Korea churned out 5.9 million tons, down 0.5% compared with November 2018.

The U.S. steel sector produced 7.2 million tons, marking a decline of 2.2% compared with November 2018. According to the American Iron and Steel Institute, the U.S. steel sector’s capacity utilization rate for the year through Dec. 14, 2019, came in at 80.1%.

U.S. steel prices have been on the rise of late after slumping throughout most of the year.

In Europe, Italy’s production totaled 2.0 million tons, down 9.8% year over year. France’s production totaled 1.1 million tons, marking a decline of 18.2%. Spain also produced 1.1 million tons, which saw its production decline 10.9%.

Brazil’s production totaled 2.6 million tons, marking a decline of 10.5%. In early December, U.S. President Donald Trump threatened to impose steel and aluminum tariffs on imports of Brazilian steel and aluminum (Brazil had initially won exemptions from the U.S.’s Section 232 tariffs, first imposed in March 2018).

However, this past week, Brazilian President Jair Bolsonaro said Trump had decided not to go ahead with imposing the tariffs on Brazilian steel and aluminum.

Elsewhere, Turkish steel production reached 2.9 million tons in November, down 8.1% year over year.

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Ukraine’s production reached 1.3 million tons, down 20.1% year over year.

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We wish you, the readers, a Happy New Year (wherever you are)!

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We’ve officially turned the page on 2019 — but in case you missed it, be sure to check out our top 10 most-viewed stories overall for 2019.

Also make sure to check out the top steel, aluminum, copper and trade posts of the year.

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Continuing our look back at some of the most-viewed posts of the year on MetalMiner, today we’ll take a look at some of the most popular trade-centric posts of the year.

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We have already reviewed the top steel, aluminum and copper posts of the year.

Below are the top 10 most-viewed trade-centric posts here on MetalMiner this year:

  1. Copper MMI: How a Boeing Trade Case Could Cause Global Copper Prices to Skyrocket, Give Wieland Metals a Guaranteed Monopoly

  2. Aluminum MMI Falls as LME Prices at Whim of Trade Uncertainty

  3. This Morning in Metals: Trump Says U.S., China to Restart Trade Talks

  4. This Morning in Metals: Copper Price Falls Ahead of New U.S.-China Trade Talks

  5. U.S.-E.U. Trade Talks Show Promise Over Auto Tariffs Issue

  6. USTR Releases Annual Trade Policy Agenda as China Talks Continue

  7. Will China’s Next Trade War Tactic be to Leverage Rare Earths Dominance?

  8. A new trade war opens up with Brazil, Argentina over steel, aluminum

  9. This Morning in Metals: ‘Significant Work’ Remains in U.S.-China Trade Talks

  10. Trade Court Rejects Legal Challenge Aimed at Undoing President’s Section 232 Powers

Continuing our look back at some of the most-viewed posts of the year on MetalMiner, today we’ll take a look at some of the most popular copper-centric posts of the year.

Looking for metal price forecasting and data analysis in one easy-to-use platform? Inquire about MetalMiner Insights today!

We have already reviewed the top steel and aluminum posts of the year.

Below are the top 10 most-viewed copper-centric posts here on MetalMiner this year:

  1. Copper Prices Forecast to Weaken Further Amid Gloomy Chinese Demand Picture

  2. Copper MMI: How a Boeing Trade Case Could Cause Global Copper Prices to Skyrocket, Give Wieland Metals a Guaranteed Monopoly

  3. ICSG: Global copper market in deficit by 330K tons

  4. Copper MMI: Global Supply Deficit Outweighed by Macroeconomic Uncertainty

  5. Copper MMI: Prices Edge Up As Global Demand Growth Outpaces Supply Growth

  6. Copper MMI: After a Seven-Week Rally, Copper Prices May Have Lost Steam

  7. This Morning in Metals: Copper Price Makes Gains

  8. Freeport-McMorRan Uses AI to Optimize Production at Arizona Copper Mine

  9. Copper MMI Drops as Chilean Production Reaches Historic High

  10. This Morning in Metals: LME Copper Prices Fall