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

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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• India sought consultations with the U.S. over its steel and aluminum tariffs.
• The Department of Commerce launched anti-dumping and countervailing duty investigations of steel rack imports from China.
• Pardon the pun, but the wind seems to be blowing in favor of wind energy.
• Public hearings on the Department of Commerce’s Section 232 investigation of automobile and automotive part imports kicked off yesterday (the hearings continued today).
• The LME warehouse system faces some challenges, writes MetalMiner’s Stuart Burns.
• According to an S&P Global Market Intelligence report, the cobalt market could be set to become even more concentrated than it already is.
• Alcoa reported its earnings for the second quarter this week, boasting a positive Q2 performance but a more bearish outlook for the remainder of the year.
• Europe installed provisional steel safeguards this week in an effort to protect its industry from diverted supplies of steel.
• For the third time during President Trump’s administration, his Department of Commerce launched a Section 232 investigation, this time looking at imports of uranium.

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This morning in metals news, President Donald Trump escalated trade tensions by threatening to slap tariffs on essentially all Chinese imports, Nucor reported its Q2 and first-half earnings, and copper hits a one-year low.

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On Another Level

The back-and-forth of tariffs and threats between the U.S. and China has continued to increase in intensity in recent weeks and months, but that back-and-forth made its biggest step yet today (at least, in words).

In a taped interview, President Donald Trump said he is willing to bring the volume of tariffs on Chinese goods to over $500 billion — that is, covering the approximately $505 billion in imports that came in from China last year.

Nucor Reports Q2 Earnings

In Q2, Nucor reported net earnings of $683.2 million, up from Q1’s $354.2 million.

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In the first half of 2018, Nucor reported consolidated net earnings of $1.04 billion, up from $679.9 million in the first half of last year.

Copper Hits One-Year Low

Copper has been sliding of late, this week hitting a one-year low, CNBC reported.

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This morning in metals news, Canada is considering new tariffs or quotas to protect itself from steel diverted from the U.S., the U.S. goes at it with several WTO members and a major energy project in the U.S. is denied a tariff exclusion request.

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Canada Considers Tariffs, Quotas

Canada could turn to tariffs or quotas as it looks to deal with the possibly of diverted steel from the U.S. (as a result of the U.S.’s Section 232 tariff).

As Bloomberg reported, Industry Minister Navdeep Bains said Canada is considering expansion of a previously announced list of products that could be subject to the safeguard measures (rebar, steel plates and energy tubular).

U.S. Challenges Retaliatory Tariffs at WTO

Several countries have responded to the U.S.’s steel and aluminum tariffs with retaliatory tariffs. The U.S.’s back-and-forth exchange of tariffs with China is the most high-profile example, but several other countries have also hit the U.S. with retaliatory tariffs of varying levels.

The U.S., however, is challenging those tariffs at the World Trade Organization (WTO), arguing they go against WTO rules, particularly referring to measures from China, the E.U., Canada, Mexico and Turkey, according to the South China Morning Post.

No Tariff Exclusion for Shale Pipeline Project

A $1.1 billion shale pipeline project was denied a steel tariff exclusion request, Reuters reported, marking the first such decision vis-a-vis a major energy project.

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The request from Plains All American Pipeline LP was denied because the Department of Commerce ruled the the company can find suitable products domestically.

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This morning in metals news, China hit a record vis-a-vis steel production, China responded to the U.S.’s threat of $200 billion in tariffs and copper continues its slide.

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A Record June

China steelmakers put out a record amount of steel, on a daily basis, in June, Reuters reported.

According to National Bureau of Statistics data, the country churned out 80.2 million tons of crude steel last month, according to the report.

China Goes to the WTO

Speaking of China, as trade tensions continue to rise with the U.S. (particularly in light of the U.S.’s most recent threat of $200 billion in tariffs), China has decided to take its case to the World Trade Organization (WTO).

China is seeking to combat the proposed tariff barrage by filing a complaint at the WTO, alleging the tariffs fall afoul of WTO rules.

Copper Price’s Slide Continues

The arrow has been pointing down on the copper price this year.

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That trend continued Monday, as the copper price fell 1%, Reuters reported. According to the report, the copper price is down 14% so far in 2018.

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

Last week, the U.S. Department of Commerce announced it had launched anti-dumping (AD) and countervailing duty investigations of steel rack imports from China.

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The alleged dumping margins in the AD case are 130.0-144.5%, according to a DOC release.

The DOC added there 28 alleged subsidy programs for steel racks, “including five preferential loan and interest rate programs, one debt-to-equity swap program, six income tax and other direct subsidy programs, two indirect tax programs, seven less than adequate remuneration (LTAR) programs, as well as seven grant programs.”

The petition in the case was filed by the Coalition for Fair Rack Imports, which estimates that imports of steel racks in 2017 were valued at approximately $200 million.

Products covered in the investigation includes “steel racks and parts thereof, assembled, to any extent, or unassembled, including but not limited to, vertical components (e.g., uprights, posts, or columns), horizontal or diagonal components (e.g., arms or beams), braces, frames, locking devices (i.e., end plates and beam connectors), and accessories (including, but not limited to, rails, skid channels, skid rails, drum/coil beds, fork clearance bars, pallet supports, column and post protectors, end row and end aisle protectors, corner guards, row spacers, and wall ties).”

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The U.S. International Trade Commission is scheduled to make a preliminary ruling by Aug. 6, with the DOC following suit Sept. 13.

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This morning in metals, China’s biggest steel city has ordered five-day output curbs to tackle pollution, the deputy USTR criticized Indian retaliatory tariff measures and it was another down week for copper.

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Tangshan Launches Cuts Ahead of Expected Smog

China’s top steelmaking city, Tangshan, has begun industry output cuts that will last five days, Reuters reported.

According to the report, the city has ordered steel mills to shut down sintering plants. In addition, coke and cement factories have been asked to cut their outputs.

USTR Criticizes Indian Trade Measures

Jeffrey Gerrish, the deputy United States Trade Representative, said this week that India’s retaliatory tariff measures are not “appropriate” and that India has not done enough to bring down the U.S.’s trade deficit with it, the Economic Times reported.

India is among the group of World Trade Organization (WTO) members to have requested consultations with the U.S., through the WTO dispute settlement mechanism, over its steel and aluminum duties.

Copper Down Again

It was another down week for Dr. Copper, as general trade anxiety continues to weigh on the market.

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According to Reuters, this week marked copper’s fifth consecutive week of price declines, as simmering trade tensions between the U.S. and China have impacted copper demand in China (the world’s top copper consumer).

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This morning in metals news, President Donald Trump threatened China with an additional $200 billion in tariffs, copper fell to a one-year low and Glencore released a statement regarding the subpoena it received from the U.S. Department of Justice in its corruption probe.

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Tariff Saga Escalates

Trade tensions continue to rise as the U.S. and China trade tariff threats, which have evolved from mere threats to reality (as a batch of $34 billion in tariffs on Chinese goods went into effect Friday, July 6).

Now, Trump has threatened China with an additional $200 billion in tariffs, Reuters reported, as China has vowed to protect itself in response.

Per a release from U.S. Trade Representative Robert Lighthizer, the announcement comes after China retaliated to the aforementioned $34 billion in tariffs with matching tariffs of their own “without any international legal basis or justification.”

According to the state-run Xinhua News Agency, a Chinese Foreign Ministry spokesperson said the U.S.’s actions represent “trade bullying.”

“This is a war between unilateralism and multilateralism, between protectionism and free trade, and between power and rules,” spokesperson Hua Chunying said. “China will work with the international community to jointly safeguard the multilateral trading system and rules.”

Copper Slides

London copper dropped to a one-year low on the heels of the Trump administration’s $200 billion tariff threat, Reuters reported.

LME copper fell to to its lowest level since July 25, 2017, according to the report.

Glencore Issues Statement on DOJ Subpoena

As our Stuart Burns discussed on Monday, Glencore has found itself under the microscope of late, particularly the microscope of the U.S. Department of Justice.

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Glencore is being investigated for its dealings in Nigeria, the Democratic Republic of the Congo and Venezuela. In response to a subpoena, Glencore released a statement on its next steps.

“Glencore takes ethics and compliance seriously throughout the Group,” Chairman Tony Hayward. “The Company will cooperate with the DOJ, while continuing to focus on our business and seeking to maximise the value we create for our diverse stakeholders in a responsible and transparent manner.”

According to the release, Glencore has formed a committee to coordinate the firm’s response to the subpoena.

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This afternoon in metals news, the first batch of $34 billion in U.S. tariffs on Chinese goods went into effect Friday, China looks to build its relationship with Europe  amid increasing trade tension with the U.S. and the United States Trade Representative released the guidelines for the exclusion application process regarding Section 301 tariffs.

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U.S., China Trade Tariffs

The latest chapter of the U.S.-China unfolded Friday, as the first piece of the previously announced $60 billion in tariffs on Chinese goods went into effect (with China responding in kind).

Reuters reported Friday that some U.S. goods had started to come through customs, and that customs officials in Shanghai Monday were collecting tariffs on such U.S. goods as fruits and wine.

China Turns to Europe

Relations between the U.S. and China have chilled, to say the least, which is why the latter is turning to Europe.

CNBC reported Prime Minister Li Keqiang met with European leaders over the weekend, touting a willingness to open China’s economy to the world. In addition, other meetings with European leaders are on the docket in the near future, including an E.U.-China summit in Beijing next week, according to the report.

USTR Publishes Section 301 Exclusion Process

Just as with Section 232, there will be parties in the U.S. looking to gain exclusions from the tariffs imposed on a wide variety of Chinese goods.

On Friday, the Office of the U.S. Trade Representative published guidelines for parties looking to apply for exclusions from the tariffs.

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According to the USTR announcement, the public now has a 90-day period during which to file exclusion requests, making for an Oct. 9 deadline.

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This morning in metals news, the U.S. and China trade tariff jabs, the steel import market share numbers for June are in and thyssenkrupp CEO Heinrich Hiesinger offers his resignation just days after the German firm’s finalization of a merger deal with Tata Steel.

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Trade Tensions Rise

At midnight, $34 billion of the U.S.’s previously announced $60 billion tariff package on Chinese goods went into effect. As previously indicated, China responded in kind, placing $34 billion in tariffs on American goods.

According to the Xinhua news agency, China’s 25% tariff will include agricultural products, vehicles and aquatic products. A China Ministry of Commerce spokesperson said the U.S. has acted like a “trade bully” that poses a “great threat to the security of global industry and value chains.”

Echoing previous comments from Chinese government officials, Premier Li Keqiang said that no one will win a trade war, but that China is “prepared to take countermeasures in the face of unilateral moves.”

Steel Imports Hit 22% Market Share in June

According to the American Iron and Steel Institute’s (AISI) report on steel imports in June, import permit applications were down 3.7% compared with the previous month. Steel import permit applications for June totaled 2,894,000 net tons (NT).

The countries with the largest finished steel import permit applications in June were: South Korea (206,000 NT, up 88% from May preliminary), Japan (134,000 NT, up 11%), Germany (105,000 NT, down 25%), Taiwan (103,000 NT, up 32%) and Vietnam (88,000 NT, up 18%).

Thyssenkrupp CEO Offers Resignation

It’s been a busy week for the German steelmaker.

Heinrich Hiesinger, CEO of thyssenkrupp AG since 2011, has offered up resignation just days after the German company finalized a merger deal with Indian firm Tata Steel, Reuters reported (the deal would merge the firms’ European operations to create Europe’s second-largest steelmaker, behind ArcelorMittal).

“Today I informed the Supervisory Board that I would like to step down from my position as CEO of thyssenkrupp,” Heisinger said in a prepared statement. “I take this step very consciously to enable a fundamental discussion in the Supervisory Board on the future of thyssenkrupp. A joint understanding of Board and Supervisory Board on the strategic direction of a company is a key pre-requisite for successfully leading a company. The broad support of our shareholders and the Supervisory Board was the basis for the success of our Strategic Way Forward since 2011.

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“This path always balanced the interests of our customers, employees and shareholders. Today thyssenkrupp is a completely different company regarding culture, values and performance. The joint venture of our steel activities with Tata is the next significant step to turn thyssenkrupp into a strong industrial company. We can be proud of what we achieved until now. For this I would like to thank all employees. They are the most valuable capital of thyssenkrupp.”

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This morning in metals news, thyssenkrupp CEO Heinrich Hiesinger said European lawmakers need to protect the steel industry from China, copper plummets to a seven-month low and President Donald Trump responded to a European threat of retaliatory tariffs (in response to potential U.S. tariffs on auto imports).

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Protecting European Steel

In comments to CNBC, thyssenkrupp CEO Heinrich Hiesinger said European lawmakers need to protect the European steel industry from Chinese imports, particularly on the heels of the U.S.’s imposition of a 25% tariff on steel.

“We are much more concerned about the likelihood that a lot of the volume (of steel) which cannot come in to the U.S. market might be re-directed to Europe and further increase the already really high imports here,” Hiesinger was quoted as saying in the interview.

Copper Drops

The copper price fell to a seven-month low on Monday, Reuters reported.

The metal fell 1.6% on Monday, hitting its lowest price since early December, according to the report, as a result of weaker demand in China.

Trump, the WTO and Europe

The saga of trade tensions, manifested by both a war of words and actions, continued on this week.

After Europe threatened to impose retaliatory tariffs should the U.S. impose tariffs on automobiles (as a result of its recently initiated Section 232 investigation on automobiles and automotive parts), President Trump decried the World Trade Organization’s (WTO) treatment of the U.S.

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Claiming that the U.S. has a “big disadvantage” at the WTO, he added “we’re not planning anything now, but if they don’t treat us properly, we’ll be doing something,” according to a Reuters report.