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The Raw Steels Monthly Metals Index (MMI) fell again this month, dropping to 83 points. The Raw Steels MMI held at 89 points since August for four consecutive months, but started decreasing in November.

 

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The recent slowdown in domestic steel price momentum led to the decline. Domestic steel prices recently decreased sharply on the back of slower demand and softer Chinese prices.

Domestic steel prices have showed slowing momentum since June 2018. Domestic steel prices increased sharply at the beginning of the year, driven by a bullish market in commodities and industrial metals and Section 232 tariffs. During most of 2018, domestic steel prices have remained at seven-year highs.

Source: MetalMiner data from MetalMiner IndX(™)

All forms of steel decreased in November except plate, which increased (driven by tight supply). Domestic plate has longer lead times than other forms of steel.

Hot-rolled coil (HRC), and hot-dip galvanized (HDG) prices also fell in December, while cold-rolled coil (CRC) prices increased slightly.

However, domestic steel prices remain in a downtrend that may last until the Chinese steel sector shows some strength again.

Historically, prices tend to drift lower during the beginning of Q4 and then rise. Last year, HRC domestic prices started to increase in December, then skyrocketed during the first quarter of 2018. However, MetalMiner does not see this increase happening during this year’s Q4 cycle.

Chinese Steel Prices

So far in December, prices of all forms of Chinese steel have decreased.

Chinese domestic steel prices started to decrease at the end of October, driven by the start of the winter season.

Source: MetalMiner data from MetalMiner IndX(™)

Chinese steel domestic demand appears weaker; fears around the Chinese economy and manufacturing growth have sent prices down.

HRC prices have declined by 5% in December already, while CRC prices have fallen by 7%.

Lower prices in China come as a result of weaker demand and increasing production. October Chinese steel output increased for a third straight month, as mills boosted output ahead of production cuts.

Chinese stock market (FXI Shares). Source: MetalMiner analysis from SeekingAlpha

The yuan continues to weaken, and the yuan/USD exchange rate is falling. U.S. importing organizations might want to remember that a weaker yuan makes Chinese goods more appealing, despite the tariffs.

Meanwhile, the Chinese stock market (FXI Shares) has fallen during most of 2018 after reaching a peak at the beginning of the year. The new downtrend comes as a result of a slowdown in China.

What This Means for Industrial Buyers

Current domestic steel prices seem to have started a downtrend.

Adapting the right buying strategy becomes crucial to reducing risks.

Only the MetalMiner monthly outlooks provide a continually updated snapshot of the market from which buying organizations can determine when and how much to buy of the underlying metal.

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

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Actual Raw Steel Prices and Trends

The U.S. Midwest HRC 3-month futures price fell this month by 6.86%, moving to $760/st.

Chinese steel billet prices fell this month by 12.81%, while Chinese slab prices fell by 10.78% to $536/mt. The U.S. shredded scrap price closed the month at $358/st, increasing by 4.6% month over month.

In December, the Copper Monthly Metals Index (MMI) rose three points, returning to October 2018 levels. Higher LME copper prices drove the index. The current Copper MMI stands at 77 points.

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Contrary to other base metals, LME copper prices increased in November.

LME copper prices have maintained momentum that started back in September. LME copper prices still trade over the $6,000/mt level, which served as a stiff resistance level for most of 2017. Prices over this level indicate a bullish copper market, while prices below that level signal a more bearish trend. Trading volume remains heavier on the buys, which also supports prices.

LME Copper prices. Source: MetalMiner analysis of Fastmarkets

LME copper prices, however, have fallen so far in December. However, this slight decrease does not seem to be relevant.

Buying organizations can expect LME copper price momentum to remain strong in the short term.

Global Copper Outlook

Chile, the world’s top copper producer, reported a 7.3% increase in copper output in the January- September time frame compared with the same period in 2017, boosted by a sharp increase from BHP’s Escondida copper mine.

The Escondida mine reached 950,000 tons of copper output, 57.8% higher from the same period in 2017 (due to the 40-day strike last year).

Meanwhile, Codelco’s production came in at  1.29 million tons, down 2% from last year. The Collahuasi mine, owned by Anglo American Plc and Glencore Plc, currently the second-largest mine in the country, reached 401,8000 tons of copper output during this period, 5.8% higher than last year.

Delegates at the Asia Copper Conference in Shanghai forecasted a strong and healthy outlook for copper demand in the mid- to long term. According to Jerry Jiao, vice president of China Minmetals Corp., the renewable energy revolution will boost copper demand in the future, with an expected increase of 2.4 million tons by 2030. That demand, together with the increase of the Chinese car fleet replaced by 20% electric vehicles by 2030 will result in 2.8 million tons of incremental copper demand (based on 60 kilogram per car and 47 million cars in the country, as reported by Reuters).

Current copper Chinese demand goes toward air conditioning, automobiles (for which demand has weakened) and infrastructure investment. In fact, copper used for infrastructure investment will serve as the biggest contributor to Chinese copper demand in 2019.

Indian copper demand will likely double by 2026, due to increasing demand in power, auto and consumer sectors. Demand in the country could reach 1.433 million tons by 2026 from 650,000 tons in 2018. Different projects have boosted investments, but this projection does not include copper usage in electric vehicles, which would increase demand up to 2.5 million tons.

Indian smelter capability utilization came in at 80%, or 843,000 tons of refined copper versus the projected 642,000 tons of projected demand. However, the recent shutdown of Vedanta (400,000 tons per year) may lower the refined copper number in 2018.

Chinese Scrap Copper

LME copper prices and Chinese copper scrap prices tend to follow the same trend. Both increased this month.

However, the pace of the increases seems to differ.

Chinese scrap prices increased softly, while LME copper prices showed stronger momentum.

Source: MetalMiner data from MetalMiner IndX(™)

The spread has become wider again. The wider the spread, the higher the copper scrap consumption, and therefore, the price.

What This Means for Industrial Buyers

LME copper prices increased this month, following a two-month uptrend. Buying organizations will want to understand how to react to the latest copper price movements.

Adapting the right buying strategy is crucial to reducing risks. Only the MetalMiner monthly outlooks provide a continually updated snapshot of the market from which buying organizations can determine when and how much to buy of the underlying metal.

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

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Actual Copper Prices and Trends

In November, most of the prices comprising the Copper MMI basket rose.

LME copper increased by 4.48% this month. Indian copper prices rose by 6.82%, while Chinese primary copper prices jumped 3.92%.

Prices of U.S. copper producer grades 110 and 122 increased by 4.08%. Meanwhile, the price of U.S. copper producer grade 102 rose 3.86%, up to $3.76/pound.

The Rare Earths Monthly Metals Index (MMI) picked up one point, rising for a December MMI reading of 18.

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Lynas Considers Legal Action Against Malaysian Government

In last month’s installment of the Rare Earths MMI, we noted shares of Australian miner Lynas Corporation Limited got a boost on news that the Malaysian government would allow it to continue storing waste materials in the country.

However, this week the miner announced it was considering legal action, among other options, against the Malaysian government, which recently issued a statement regarding conditions for the miner’s license renewal.

According to a Lynas statement, the two conditions for renewal on Sept. 2, 2019, from the Malaysian government are: 1) the export of Water Leach Purification residue before Sept. 2, 2019, and 2) submission of an action plan for the disposal of Neutralization Underflow Residue (NUF) (which has valid approval through Feb. 5, 2019).

As readers know, China overwhelmingly dominates the global rare earths sector; however, Lynas represents the biggest rare earths miner outside of China.

Rare-Earths Elements in Mining Waste?

Given the demand for rare earths, particularly vis-a-vis high-tech applications (e.g. electrical vehicle batteries), every little bit of supply helps.

According to doctoral research cited by phys.org, it may be possible to extract quantities of rare earths from quarried ore.

“The problem is that the minerals we want are hidden in the waste heaps in very small quantities, and we do not have efficient methods for extracting them,” Wenzhong Zhang, a doctoral researcher in the Department of Chemistry at the University of Helsinki, was quoted as saying.

His research focuses primarily on recovery of rare-earths elements, namely scandium, from aluminum.

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Actual Metal Prices and Trends

Yttrium rose 1.3% to $32.68/kilogram, while terbium oxide rose 3.6% to $432.16/kilogram.

Neodymium oxide jumped 2.8% to $45,903.70/mt. Europium oxide was up 1.3% to $42.13/kilogram, while dysprosium oxide rose 9.5% to $180.13/kilogram.

The Automotive Monthly Metals Index (MMI) picked up one point for a December MMI reading of 95.

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U.S. Sales

General Motors reports sales numbers on a quarterly basis, rather than a monthly basis. The automaker reported sales fell 11% year over year in the third quarter, but touted an average transaction price that was up $700 compared with the same period last year (up to a third-quarter record of $35,974).

As for November reports, Ford Motor Co. reported its U.S. sales dropped 6.9% year over year, with 196,303 units sold in the month. Even trucks and SUVs, which have become the automaker’s focal points amid the deemphasis on traditional sedans, saw sales drops (2.3% and 4.9%, respectively).

Fiat Chrysler, meanwhile, posted another strong month, with U.S. sales up 17% year over year. Sales of Fiat Chrysler’s Ram and Jeep brands surged 44% and 12% year over year, respectively.

Honda reported a 9.5% year-over-year drop in U.S. sales, while Nissan sales were down 18.7%.

According to a sales forecast by Edmunds.com, total sales in the U.S. were projected to decrease 1.3% in November compared with November 2017, but up 1.3% compared with the previous month.

GM Moves to Close Plants, Slash Workforce

Among the bigger automotive developments last month came from GM, which announced the closure of several North American plants and a 15% workforce reduction.

“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” GM Chairman and CEO Mary Barra said in a prepared statement. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”

The move, which is projected to save the automaker approximately $6 billion, was unsurprisingly the source of sharp criticism from politicians, including President Donald Trump, who referred to the Commerce Department’s pending Section 232 probe of automobile imports in a tweet respond to the GM news.

“The reason that the small truck business in the U.S. is such a go to favorite is that, for many years, Tariffs of 25% have been put on small trucks coming into our country,” Trump tweeted Nov. 28. “It is called the “chicken tax.” If we did that with cars coming in, many more cars would be built here. and G.M. would not be closing their plants in Ohio, Michigan & Maryland. Get smart Congress. Also, the countries that send us cars have taken advantage of the U.S. for decades. The President has great power on this issue – Because of the G.M. event, it is being studied now!”

GM announced, among other facilities, three North American assembly plants would be “unallocated,” located in Oshawa, Ontario; Detroit; and Warren, Ohio.

MetalMiner’s Stuart Burns touched on the announcement last week, noting the move might simply be a harbinger in the automotive sector at large.

“What is more surprising to some is that GM is acting when results are strong,” Burns wrote. “GM’s third-quarter adjusted earnings per share were 42% higher than the same period a year ago and its underlying earnings before interest and tax rose 25% to $3.2 billion. Net revenues rose 6.4% to $35.8 billion.

“But analysts see this as GM being a first mover and acting ahead of the curve.”

Actual Metal Prices and Trends

U.S. HDG steel fell 6.9% month over month to $934/ton. Platinum bars fell 3.5% to $806/ounce, while palladium bars rose 11.7% to $1,192/ounce.

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LME copper rose 4.5% to $6,287/mt. U.S. shredded scrap steel jumped 4.7% to $358/st.

Chinese primary lead rose 1.6% to $2,734.61/mt.

U.S. aluminum maker Century Aluminum announced last week it plans to expand production at its smelter in Sebree, Kentucky.

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The Sebree smelter — one of two Century Aluminum smelters in Kentucky, the other in Hawesville — has an annual production capacity of 220,000 tons.

Last week, the company announced its expansion plans would be completed by the end of the first quarter of 2019. According to the company announcement, the expansion includes the addition of 90,000 metric tons of billet production and 20,000 metric tons of additional secondary capacity.

As a result, the Sebree smelter is expected to produce 230,000 metric tons of aluminum in 2019, which includes 175,000 metric tons of billet.

In a prepared statement, President and CEO Michael Bless touted the “positive effects” of the Trump administration’s Section 232 tariffs.

“These new expansion programs demonstrate our confidence in the future of the U.S. aluminum industry and the continued positive effects of the Trump administration’s Section 232 program,” Bless said. “With the 150,000 MT restart of Century’s Hawesville smelter nearing completion, we are now able to continue to reinvest in our plants to increase value-added production and enter the expanding secondary market.

“These programs, along with the previously announced technology improvement program at Hawesville, should ensure the continued competitiveness of these plants well into the future.”

The Sebree smelter employees 515 people. Bless added as a result of the expansion, the Sebree smelter will see an addition of “nearly 50 new employees.”

In October, Century Aluminum reported third-quarter financial results, posting a net loss of $20.3 million, in part attributable to developments at Sebree.

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“Third quarter results were negatively impacted by $9.2 million related to lower of cost or net realizable value (“NRV”) inventory adjustments, $16.9 million related to the equipment failure at Sebree, and $1.7 million related to the Sebree labor agreement signing bonus,” stated in its third-quarter earnings release.

“USMCA” might not roll off the tongue like “NAFTA.”

Nonetheless, it’s the talk of North America.

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The United States-Mexico-Canada Agreement (USMCA) — the successor to the 1994 trilateral trade deal, the North American Free Trade Agreement (NAFTA) — was signed Friday by President Donald Trump, then-President Enrique Peña Nieto (Nov. 30 was his final day in office) and Prime Minister Justin Trudeau on Friday during the Group of 20 (G20) summit in Buenos Aires, Argentina.

The deal must still must be ratified by the legislatures in each country; under a Democrat-majority House, it remains to be seen if the deal will be held up in any meaningful way.

Regardless, industry leaders and politicians shared their takes on the USMCA signing, a culmination of NAFTA renegotiation efforts that formally began in August 2017.

While some of the USMCA is relatively unchanged from NAFTA, it did offer changes to sections related to the automotive market, including an increase to 75% — up from 62.5% — for automotive regional content rules and more stringent rules on wages for laborers (40-45% auto content must be produced by workers making a minimum of $16/hour).

For many firms and industry groups, the reaction was simple: the deal marked a good step, but tariffs on steel and aluminum vis-a-vis Canada and Mexico should be removed.

“Today’s signing is an important step towards achieving free and fair trade in North America,” said Joe Hinrichs, executive vice president and president of global operations for Ford Motor Co. “We look forward to being a collaborative partner to support the ratification of the agreement in all three markets because it will support an integrated, globally competitive automotive business, helping to drive volume and support manufacturing jobs.

“To achieve the full potential of the trade agreement and to ensure ratification, the elimination of tariffs on steel and aluminum will be critical and we will continue to work with all stakeholders on this important issue.”

Earlier this year, Ford CEO Jim Hackett said the Trump administration’s tariffs on steel and aluminum, which remain in place vis-a-vis Canada and Mexico, would cost the Big Three automaker $1 billion in profits.

Gary Jones, president of labor union United Automobile Workers, panned the “new NAFTA,” referring to the recent moves by General Motors to close seven plants (five in North America) and a 15% workforce reduction.

“Before the ink hit the paper, General Motors has already signaled that the ‘New’ NAFTA (known as USMCA) is not strong enough, as it stands today, to deter them from moving products and taking advantage of low cost labor,” Jones said. “Quite simply, the ‘New’ NAFTA needs more input and more work. We were hopeful that this new agreement would rein in the corporate greed that has bled manufacturing in the United States. Unfortunately, as GM’s idling of plants in Ohio, Michigan and Maryland this week showed – the ‘New’ NAFTA, as it stands now, is not strong enough to protect American workers.”

During the signing ceremony Friday, Trudeau directly addressed Trump to indicate the importance of removing the tariffs.

“As I discussed with President Trump a few days ago, the recent plant closures by General Motors, which affects thousands of Canadian and American workers and their families, are a heavy blow,” Trudeau said. “Make no mistake: We will stand up for our workers and fight for their families and their communities.

“And, Donald, it’s all the more reason why we need to keep working to remove the tariffs on steel and aluminum between our countries.”

Canada and Mexico were initially temporarily exempted from the tariffs, which at first were perceived as a measure expected to target China; however, the countries’ temporary exemptions were allowed to expire as of June 1.

Recreational boating industry groups were among the many to offer general praise for the deal, with the caveat that the tariffs should, in their view, be removed.

Thom Dammrich, president of the National Marine Manufacturers Association (NMMA), and Sara Anghel, president of NMMA Canada, issued a joint statement on the heels of the signing, stating any enthusiasm they had for the deal was outweighed by concerns related to the tariffs (and subsequent retaliation).

“When the Trump Administration hit key allies with tariffs under the guise of a national security threat, Canada and Mexico responded with punitive tariffs on distinctly American made industries and products, including recreational boats,” the statement says. “As a result, U.S. boat exports to both countries – which account for more than half of the U.S. industry’s international sales – have all but dried up, jeopardizing thousands of jobs and businesses in all three countries. For every day that passes without a solution to this problem, the chances of seeing irreparable harm to our industry grows.”

The Coalition of American Metal Manufacturers and Users (CAMMU) also panned the deal, citing the fact that the Section 232 tariffs on Canada and Mexico had not been terminated.

“A golden opportunity was missed today to improve upon the Trump administration’s self-destructive 232 tariff scheme,” CAMMU spokesperson Paul Nathanson said.  “Thousands of manufacturing companies around the country must today cope with price hikes, delivery delays and the outright unavailability of the steel and aluminum they count on to make their businesses operate.”

Nathanson continued: “By cutting itself off from the global steel market, the U.S. has become an island of high steel prices. The result of this policy is simple: American steel-using manufacturers cannot successfully compete against foreign competitors able to purchase steel at world market prices outside this country. President Trump must lift the tariffs on steel and aluminum or risk undermining the broader U.S. economy.”

The American Iron and Steel Institute (AISI) also weighed in on the signing.

“We appreciate the administration’s hard work to reach this trade agreement between the U.S., Canada and Mexico,” said Kevin Dempsey, AISI’s senior vice president of public policy. “The NAFTA has provided significant benefits for the American steel industry by promoting the development of manufacturing supply chains in North America, especially with key customer groups like the automotive industry. The new agreement builds on this success by establishing new rules of origin that will further incentivize the use of North American steel in the manufacturing of automobiles and other steel-intensive goods in North America.”

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The full text of the USMCA can be found here.

It may be in an extremely preliminary stage, but South Korean steelmaker Hyundai seems keen on setting up a steel plant in India.

A team from the Hyundai group visited Visakhapatnam in South India, where the steel plant of Rashtriya Ispat Nigam Ltd (RINL) is located, and spoke of looking at the possibility of setting up a steel plant in partnership with the public sector company, according to a Business Standard report.

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The Telegraph quoted P.K. Rath, chairman and managing director of RINL, acknowledging the visit in October, saying the South Korean major was indeed interested in a joint venture (JV).

Rath told The Telegraph that Hyundai was contemplating setting up a flat steel plant, especially since RINL was already producing long products. Though too early in the day, the plant could have an annual capacity of 3 million tons. Flat steel products like sheets are used in automobiles and consumer durables.

In addition to Hyundai Steel, the Hyundai-Kia Motor Group has steel companies, like the Hyundai Special Steel and BNG Steel Co., Ltd. Specifically, in India, Hyundai has a steel service center under Hyundai Steel India Private Limited (HSIPL), which caters to the steel requirements of Hyundai Motors India Limited.

The delegation of Hyundai company representatives, including the South Korean ambassador, visited the Visakhapatnam Steel Plant. Sources say government-to-government talks for setting up such a project were already on. The delegation will now give its report to the government.

Steel analysts here said Hyundai setting up a JV plant in India would be a good business decision for the South Korean group, as Hyundai not only sells automobiles in India — for which steel is required — but two other Korean brands, Samsung and LG, have a huge presence in the country, with both requiring flat steel products.

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RINL itself is on the way to ramping up, aiming for a capacity of 7.3 million tons next year.

Judging from the howls of protest on Capitol Hill, politicians do not agree with analysts’ estimates that General Motors’ decision to shed 15% of its workforce and close seven facilities worldwide is the act of a smart first mover in an industry facing seismic changes.

GM’s plans, reported in the Financial Times, are intended to save $6 billion and will further move the company out of traditional sedans to focus on more profitable SUVs and crossovers.

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The Financial Times says manufacturers are having to pound investment into new technologies such as electric and self-driving cars against a backdrop of rising costs and falling demand for passenger cars.

GM is not alone — Ford and Fiat Chrysler may follow suit.

The Financial Times reports Ford is already planning $14 billion of cost savings. Unlike GM, Ford’s belt-tightening is expected to be directed at its struggling South American and European operations.

The Financial Times says Ford had originally planned to make its Focus car in a Mexican plant, but then moved production to China instead. In August, the automaker pulled plans to sell the vehicle in the U.S., where it would have faced additional import taxes.

What is more surprising to some is that GM is acting when results are strong.

GM’s third-quarter adjusted earnings per share were 42% higher than the same period a year ago and its underlying earnings before interest and tax rose 25% to $3.2 billion. Net revenues rose 6.4% to $35.8 billion.

But analysts see this as GM being a first mover and acting ahead of the curve.

It’s believed the writing is on the wall, as unused capacity across the U.S. car industry amounts to 3.2 million vehicles annually, of which GM accounts for 1 million. GM’s closure would see it all but abandon passenger cars, including the Chevrolet Cruz and the hybrid Volt.

Import tariffs on steel and aluminum are said to be adding cost to domestic producers, in the region of U.S. $1 billion for GM and for Ford, while the trend in a lower oil price environment for consumers to favor larger vehicles has skewed the market in a way for which manufacturers had not been prepared.

GM’s unused production capacity is said to higher than its peers and is almost solely in smaller, conventional four-door sedans.

GM’s share price reacted favorably to the announcement, as investors saw the news as evidence CEO Mary Barra was cutting the company’s cloth to match its prospects; politicians, both state and federal, however, saw it as a betrayal of commitment in U.S. manufacturing.

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Take it how you will, but, either way, GM and other big automakers’ moves will have consequences for their supply chains in 2019.

According to preliminary U.S. Census Bureau data released Tuesday, U.S. imports of steel in October hit 3.0 million metric tons, at a value of $2.7 billion.

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The October total marks an increase from the previous month, when the U.S imported 2.0 million metric tons at a value of $2.o billion. However, according to an American Iron and Steel Institute (AISI) report Tuesday, steel imports through the first 10 months of the year are down 11% compared with the same time frame in 2017. Finished steel import market share for the year to date reached 21%.

Source: American Iron and Steel Institute

The increase in October imports came mostly in the form of blooms, billets and slabs, while decreases were seen in heavy structural shapes, reinforcing bars, and sheets and strips.

Imports of blooms, billets and slabs surged last month, reaching 1,154,364 tons, up from the September final of 359,265 tons and the October 2017 final of 566,294 tons.

By country, import increases were seen from Brazil, while decreases were seen in imports from Turkey, Taiwan and Thailand.

Imports from Brazil hit 849,767 tons in October, up from 104,722 tons in September and 324,711 tons in October 2017.

Imports from Turkey continue to plummet, dropping from 120,948 tons in September to 61,472 tons last month. The October total was also down significantly on a year-over-year basis, as the U.S. imported 101,863 tons from Turkey in October 2017. (Back in August, MetalMiner’s Stuart Burns delved into the toll U.S. tariffs have taken on Turkey’s steel sector.)

Through the first nine months of the year, the U.S. has imported 883,054 tons from Turkey, down from the just over 1.76 million tons during the same period in 2017.

In the year through the end of September, the U.S. imported 23.7 million metric tons, down from 26.9 million metric tons through the January-September 2017 period.

Total imports from Canada and Mexico also increased in October from the previous month, hitting 739,346 tons, up from the September final total of 638,543 tons. However, the October import total fell from the October 2017 final total of 743,537 tons.

As we have noted here previously, Canada and Mexico continue to express the hope that the U.S. will remove its tariffs on steel and aluminum vis-a-vis the two countries as part of a finalized United States-Mexico-Canada Agreement (USMCA).

Canada and Mexico’s temporary exemptions from the U.S.’s Section 232 tariffs on steel and aluminum were allowed to expire June 1.

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Meanwhile, steel imports from the European Union hit 143,491 tons in October, according to the preliminary data. The total marked a drop from the previous month (145,701 tons), but an increase from October 2017 (138,657 tons).

According to World Steel Association data released late last week, global crude steel production in October jumped 5.8% compared with October 2017 production.

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Production from the 64 countries reporting data to the World Steel Association amounted to 156.6 million tons in October.

Broken down by country, China produced 82.6 million tons, up 9.1% year over year. The October production growth increased from September’s spike of 7.5%.

The Chinese steel sector hit a bear market, with prices reaching five-month lows.

We noted yesterday:

U.S. steel-buying organizations ought to watch China’s demand very carefully now, as price trends in China lead price trends in the U.S.

Lower oil prices combined with sluggish Chinese demand does not bode well for the industrial metal’s long-term bull market. The dramatic shift in oil prices and lower metal pricing coming out of China represent two significant variables tracked by MetalMiner with respect to calling a bull or bear market.

December forecast subscribers will be the first to learn whether or not MetalMiner will change its long-term outlook. A shift in outlook would also signify a switch in sourcing strategies.

The U.S. produced 7.6 million tons of crude steel in October 2018, up 10.5% compared to October 2017.

Indian production reached 8.8 million tons, up 0.4% from October 2017. Japan produced 8.6 million tons, marking a 4.5% decline compared to October 2017. South Korea saw a 3.5% year-over-year increase, up to 6.2 million tons in October.

Meanwhile, in Europe, France produced 1.3 million tons, a decrease of 3.5% compared to October 2017. Italy’s produced 2.3 million, up 1.1% year over year. Spain produced 1.3 million tons, marking a decrease of 7.4%.

Turkey’s production hit 3.2 million tons, down 4.3% year over year.

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Ukraine produced 1.8 million tons, down 6.7% year over year.