Tag: US

Dow Hits 20,000; Trump To Call For Border Wall, Immigration Actions

Dow Hits 20,000; Trump To Call For Border Wall, Immigration Actions

President Donald Trump is expected, today, to order the construction of a wall between the U.S. and its southern border with Mexico, the first in a series of actions this week to crack down on illegal immigration and bolster national security.
Trump’s executive order is expected to direct the department of Homeland Security to begin the process for designing and building the wall with possible involvement from the General Services Administration. Trump is also expected to ask the Congress to fund the wall’s construction.
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The immigration moves are also expected to include slashing the number of refugees who can resettle in the U.S. and temporarily blocking Syrians and others from war-torn nations from entering, at least temporarily, until a vetting process can be set up to make sure refugees or other immigrants are not linked to terrorist radical movements.
Other executive orders today are expected to seek to end sanctuary cities and the practice of releasing undocumented immigrants detained by federal officials before trial.

Dow Breaks 20,000

U.S. equities rose to all-time highs in early trading today after the series of executive orders from Trump in the first few days of this week increased bullish sentiment on Wall Street.
The Dow Jones Industrial Average broke above 20,000 for the first time, rising 150 points as Boeing and IBM contributed the most gains.

Steel’s Top Priorities: Global Forum, Block China Market Economy Status

Steel’s Top Priorities: Global Forum, Block China Market Economy Status

The American Iron & Steel Institute, a key lobbying force for the steel industry, is focused on two major policy issues for the remainder of the year: getting the G20-initiated “Global Forum” on steel overcapacity officially in motion before the Obama administration leaves office, and ensuring that the U.S. continues to refuse to recognize market economy status for China.

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“If China gets market economy status it will mean 400,000 to 600,000 lost jobs (in steel, other metals and services for the industries) the U.S.,” said Thomas J. Gibson, President and CEO of the AISI in a conference call with reporters yesterday.

When asked what the position of the AISI is, as opposed to that the U.S.-China Business Council, AISI Senior VP for public policy and general council Kevin Dempsey said, “what the Chinese are trying to present is sort of a legalistic argument that, regardless of the facts, they should be granted the status. I don’t think that legal argument stands up to scrutiny.”

My colleague, Taras Berezowsky, recently interviewed Dempsey on the issue and there’s more on what the ascension protocol is and what must be done for China to achieve it in his article, which is the first of a series.

“The question (that could come before the WTO) is can we continue to use non-market methodology?” Dempsey said. “The answer is yes. The Chinese claim it can be expired. One sub-paragraph expires and the rest of article 15 stays in place. You have to allow countries to continue to apply non-market methodologies and have China make the case that it’s a market economy. I don’t think there is any credible economic analysis that says China is a market economy.”

Dempsey also said that current U.S. law requires that commerce determine what trading partners are market or non-market economies. “Our statute is clear. Nothing will change in the U.S.,” he said.

On the issue of infrastructure improvement, Gibson said.

“We are heartened that both campaigns are focused on an infrastructure bill as a priority,” he said. “The biggest single item is a highway bill. The key issue is how it’s funded.”

Gibson explained that AISI would prefer a long-term funding solution as opposed to how the last few highway bills have been funded, moving money from customs enforcement and other places in the federal budget.

“A user fee, a gas tax, something that needs to be permanent,” he said. “(Funding infrastructure improvements) needs to be put on sound financial footing and avoid one-time funding gimmicks. It leads to a lot of uncertainty. It’s caused some states to look to their own means such as increasing their own gasoline tax.”

On one issue, AISI did show marked disagreement with the Trump campaign. That was the North American Free Trade Agreement. Republican nominee Donald Trump has said he would renegotiate the deal between Canada, the U.S. and Mexico.

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“NAFTA has been a success for the North American steel industry,” Gibson said. “It has enhanced cooperation among the three industries, increased exports and, while there was a deficit before it passed in 1994, the U.S. now has a small surplus in steel trade with Canada and Mexico.”

A Market-Based MetalMiner Week In Review

This week the Federal Reserve declined to raise interest rates here in the US, but hinted strongly that it might do so at its last meeting of the year in December. Market-watching and significant commodities lows dominated the week in metals and most commodities.

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In China, the central government made a move to goose its planned economy that hardly anyone expected when it rescinded the longstanding 1 child policy families had been limited to since 1979. Chinese parents can now bring 2 whole kids into the world!

Introduced by Deng Xiaoping to improve a then-impoverished nation’s scarce resources, the baby limit is threatening to undermine growth there as the working-age population shrank last year for the first time in 2 decades and the cohort of senior citizens is projected to grow rapidly, just like our retiring baby boomers.

We write about China quite a bit here at MetalMiner, but mostly in relation to metals exports, oil and things that aren’t human beings. Yet, our skepticism about China really changing to modernize its economy extends to this 2-child policy, which could be a clever way to make it look like the nation is changing without dealing with underlying problems.

[caption id="attachment_72123" align="aligncenter" width="550"]US dollar vs. RMB Dollars and yuan renminbi dominated our economic conversation this week.[/caption]

With slowing growth and a steel industry that’s still stuck in the dark ages when it comes to supply and demand and environmental regulation, can China really have all the jobs necessary to fill its current population? Let alone the next generation? China’s planned economy shoots for 100% employment. I’m skeptical of China getting even close to that these days without currency manipulation, overproduction of steel, aluminum and most of the metals that we track.

So, the labor market there is not really a market at all. My colleague, Lisa Reisman explained just how far mainland China is from being a market-based economy this week while discussing recent World Trade Organization moves to recognize it as such. The picture’s not pretty.

China’s largest listed steel producer, Baoshan Iron & Steel, has no further plans to cut production following the recent closure of its 550,000-metric-ton-per-year Baotong plant, even though most figures show it is still overproducing steel for export. I suppose we could achieve 100% employment in the US here, too, if we were to give half the unemployed jobs digging holes and the other half jobs filling them up.

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As if on cue, the US Dollar bounced off support and is now climbing higher against other currencies. While our banking system, and the Fed itself, can sometimes seem arbitrary and unsatisfying to investors, things could be far worse.

US, 11 Far East Nations Agree to TPP, Congressional Approval Necessary

The US and 11 trading partners, mostly in the Asia-Pacific region came to final agreement on the Trans-Pacific Partnership, which still faces a skeptical congress.

TPP Agreed To

The US, Japan and 10 other Pacific Rim nations on Monday reached final agreement on the largest regional trade accord in history, although an approval fight still looms in congress.

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The conclusion of the Trans-Pacific Partnership, after years of negotiations was “an important first step,” said Michael B. Froman, the United States Trade Representative, as he and other officials announced their accord.

The deal faces months of scrutiny in Congress, where some bipartisan opposition was immediate.

Steel Imports Down in August

Based on preliminary Census Bureau data, the American Iron and Steel Institute (AISI) reported that the US imported a total of 3,016,000 net tons (nt) of steel in August 2015, including 2,439,000 nt of finished steel. That is down 8.2% and 6.7%, respectively, vs. July final data.

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On the year-to-date, through the first 8 months of 2015, total and finished steel imports were 28,023,000 and 22,915,000 nt, respectively. That was down 2% and up 7%, respectively, vs. the same period in 2014.

WTO Says India Needs to Consider US Suppliers for Massive Solar Project

WTO Says India Needs to Consider US Suppliers for Massive Solar Project

India has lost a case against the US at the World Trade Organization over protection for local crystalline silicon and thin-film solar cells.

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The WTO ruled that India’s domestic content requirements under its new solar power program were inconsistent with international agreements. Indian officials have said they will appeal the ruling to the WTO’s dispute panel in the next two months.

[caption id="attachment_72737" align="aligncenter" width="450"]Solar Panel array Photovoltaic solar array, the kind US manufacturers would love to send to India.[/caption]

The US alleged that India’s ambitious solar program discriminates against US crystalline silicon photovoltaic and thin-film solar panel manufacturers by requiring Indian producers to use locally manufactured silicon or thin-film cells and by offering subsidies to those developers who use domestic equipment.

The US also said the forced localization requirements restricted US exports to Indian markets. The panel struck down the Indian government’s incentive policies, especially subsidies provided for domestic solar companies for manufacturing the cells.

India’s Big Solar Investment

On January 11, 2010, India launched its national solar policy, the Jawaharlal Nehru National Solar Mission.

Its target is generation of 20,000 megawatts of solar power by 2022 is a virtual boon to US solar cell and module producers. Companies such as Solarworld USA and First Solar see India’s massive solar parks as a once in a lifetime business opportunity and, sure, they want to be a part of it, but taking the case to the WTO over local incentive programs could come back to haunt US producers of other metals.

Incentives vs. Requirements

There are incentive programs on the state and national level for using local products in the US. Nationally, the LEED (Leadership in Energy and Environmental Design) standard from the non-profit US Green Building Council, for example, gives credit for any materials or products that have been extracted, harvested or recovered, as well as manufactured, within 500 miles of the project site.

To be fair, the US producers do not want to “dump” solar cells into India and aren’t offering any incentives to export programs, what the US alleges India and other nations are doing with several types of foreign steel being imported to the US.

The US producers merely want to be able to compete in India with manufacturers of solar cells and modules that have operations there. What the WTO essentially said, is that, just like export subsidies, a government cannot give too much of a preference for locally produced materials, as well. This includes requiring Indian solar cells. The Indian government also cannot, according to the WTO, REQUIRE the builders to only specify and purchase local materials.

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In this situation, New Delhi may have wanted to take a page out of the USGBC’s book and find incentives, rather than requirements, to give to local solar producers.

India Imposes Anti-Dumping Duties on Stainless Steel, US Tariffs Next?

India Imposes Anti-Dumping Duties on Stainless Steel, US Tariffs Next?

The imposition of anti-dumping duties by the Indian government should encourage US authorities who have been asked to enforce a similar move. The suit filed by six US companies concerns corrosion-resistant steel, a type of coated steel used in automobile and construction industries. The US has been witnessing an unprecedented flood of imports in the last one year or so.

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As reported by MetalMiner last month, the US steel industry is suffering because the imports hit a record 34% of market share, according to the American Iron and Steel Institute (AISI).

The US slapped duties on imports of steel used in the energy industry from South Korea and five other countries last year but, evidently, those tariffs did not have the desired effect. The AISI in its press briefing last month, asked the US Government to first enforce existing trade laws which would be an immense help to the steel industry.

In India, steel imports had increased to 0.91 million metric tons this May, an increase of 58% as compared to the same month’s figure last year. As compared to April 2015, the import rate was up by about 20 mt, according to a report by the Ministry of Steel.

Many analysts said the Indian stainless steel industry started resembling a sick industry, as cheap imports were leading to a situation of under-utilization of installed capacities. The local industry hopes the anti-dumping duties will send out a clear signal to those sending in cheap imports, and lead to a resurgence in India’s steel sector.

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The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.

Steel-Insight: US HRC Slide Will Continue, But Likely Bottom-Out in April

Current prices for US HRC are around $470 per ton ex-works, although big buyers dealing with some mills can still pay $450 per ton.

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Steel-Insight believes that this is close to the bottom, but we don’t expect a sharp turnaround anytime soon. So why is this a pricing trough?

Further Discounting

First, those big discounted prices have been available for around three weeks and some big distributors and tube buyers have pulled the trigger at the $450 per ton level. That has helped push out mill lead times back to four weeks and lessened the need to discount heavily. We understand that integrated mills are now far more reluctant to discount below $470 per ton. There could be further discounting on cold-rolled coil front as the spread remains too high compared to cost.

Second, shredded scrap prices look like they are stabilizing at around $250-260 per ton delivered to Midwest mills. That means mini-mills are not likely to discount below $450 per ton as they would lose money and they don’t need to take that business to fill their order books now. International scrap prices have bumped up a little, although they lack the overall momentum to rise much more, while scrap flows into yards slowed with the lower prices.

Finally, there has been a supply response.

We’re Number 4: US Loses Number 3 Spot Among WSA Steel Producers to India

We’re Number 4: US Loses Number 3 Spot Among WSA Steel Producers to India

A recent article in India’s Economic Times is typical of recent coverage that makes much fanfare of India’s rise to 3rd-largest steel producer in the world at the expense of the USA which slipped to 4th.

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The differences are relatively small, based on data compiled by World Steel Association (WSA) India’s production growth was the world’s highest during the January-February period at 7.6% to 14.56 million metric tons, compared to the US which slipped back to 13.52 mmt. According to the ISSB, India produced about 86.5 mmt compared to the 88.2 mmt from the the US, but the US is facing a strong dollar denting its export markets and — by way of that same strong dollar and massive global overcapacity — a tsunami of imported steel. According to the ITA in 2014, US imports of steel mill products totaled 40.2 mmt, a 37.9% increase from 29.2 mmt in 2013.

What it Means

First, should we worry about India taking 3rd place spot from the USA in steel production?

Looking at it dispassionately, no. It is inevitable that an emerging market with a population of 1.25 billion and with a projected increase in its urban population from 400 million to 600mm by the end of the decade. At the same time as it industrializes and invests in infrastructure, India is going to need to build substantial steel capacity.

The US, on the other hand, has a mature industrial landscape with a quarter of India’s population and while it has some of the most efficient and lowest-cost steel production in the world it still operates in a high-cost environment with stringent environmental and health and safety controls that inevitably have an impact on the industry’s ability to compete in overseas markets.

So 3rd spot or 4th spot is really no more than symbolism. What is more important is whether or not the change tells us anything about global steel markets. Is India’s rise achieved unfairly by subsidy or state support as China is often accused of benefiting from? Although we laid out good reasons why Indian domestic demand would stay high and rise, in fact the country exports about the same percentage of its total production as the US and the trend is growing. So, not all of that steel is being consumed domestically and the country’s steel industry has aspirations to be a regional supplier not just meet domestic demand growth.

US Steel Producers Rightfully Concerned About CRC Imports

Invariably whenever prices for commodities fall, domestic producers begin sounding the alarm bells. And those bells are ringing loud and clear when it comes to steel imports from China, according to a recent Wall Street Journal article.

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The comments on that story, on the other hand, tend to center on free trade, fair markets and protectionism. They tend to support the point of view of the buying organization and not the domestic producer.

But most commentators don’t spend the time poring through steel data to engage in an informed debate. From our vantage point, several factors should be part of any trade analysis.

US-India Nuclear Pact Not a Done Deal, But Westinghouse Wants to Move Forward

US-India Nuclear Pact Not a Done Deal, But Westinghouse Wants to Move Forward

There is no assurance in India as to whether the nuclear deal “work around” Prime Minister Narendra Modi reached with US President Barack Obama this week will pass legal muster, since India’s parliament, based on international norms, passed a very stringent law earlier under a previous government.

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An agreement was signed on civil nuclear cooperation between the two nations in 2008, and India had to put in place a nuclear liability regime to pass international norms, which makes the supplier, in this case US firms providing the prospective nuclear plants’ technology, financially responsible for any mishaps. Now, both leaders have agreed to “bypassing” this major stumbling block by bringing in Indian insurance companies.

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