Metal Bulletin Daily Steel

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Metal Bulletin
Daily Steel
June 14, 2018
Welcome to the new Metal Bulletin Daily Steel. Your improved daily newsletter brings you all the steel and raw materials news from the past 24 hours from our dedicated steel team.
Today’s Top Stories
US files more anti-circumvention cases against Vietnamese flat-rolled steel
East Asian stainless steel prices track nickel lower
EU safeguard case 'will boost domestic flat steel prices, hurt distribution'
Italian rebar, welded mesh producers see $165 mln fines for alleged price-fixing canceled
News
Global | Asia | Middle East | Europe | Russia and CIS | North America | Latin America
CONTENTS
Global
Flat Products
Another US circumvention case targets Vietnam coated steel
Flat Steel Products Trade Log, June 14, 2018
Long Products
Long Steel Products Trade Log, June 14, 2018
Semi-Finished
Semi-finished Steel Products Trade Log, June 14, 2018
Scrap
DAILY SCRAP REPORT: Prices rise again as Turkish mills continue bookings
Raw Materials
IRON ORE DAILY: Measures to cut pollution in China continue to drive pellet and lump demand
COKING COAL DAILY: Seaborne market awaits clear direction
Steelmaking Raw Materials Trade Log, June 14, 2018
Asia
Flat Products
CHINA HRC: Domestic prices take a pause as demand declines
Long Products
CHINA REBAR: Domestic prices rise on lower inventories
Scrap
Taiwanese scrap import prices rebound on limited supply
Stainless & Special Steels
East Asian stainless steel prices track nickel lower
Industry & Companies
China AM: Coke futures surge ahead
Chinese steel output up in May
Middle East
Long Products
TURKEY LONG STEEL EXPORTS: Prices up on costlier scrap, recovering demand
TURKEY LONG STEEL: Rebar prices slip, wire rod stable
EGYPT STEEL BILLET, REBAR: Billet import prices rise in new deals, domestic rebar steady
Semi-Finished
TURKEY STEEL BILLET: Rising scrap costs push billet prices up
Europe
Flat Products
EU safeguard case 'will boost domestic flat steel prices, hurt distribution'
Stainless & Special Steels
European molybdenum oxide, alloy prices drop with demand
Industry & Companies
Italian rebar, welded mesh producers see $165 mln fines for alleged price-fixing canceled
Russia and CIS
Raw Materials
CIS PIG IRON: Price negotiations restart but no deals heard
Industry & Companies
Metalloinvest Q1 earnings up 28% on higher global prices
North America
Flat Products
US flat-rolled import prices up on expanded 232
Long Products
US domestic, import rod prices stable in wake of 232
Raw Materials
US ferrous scrap export prices diverge by coast
Tube & Pipe
US welded tube, pipe prices rise on coil, Section 232
Industry & Companies
CIT remands Turkey pipe dumping case
US files more anti-circumvention cases against Vietnamese flat-rolled steel
Latin America
End Users
Mexican automotive production up 4% in May
GLOBAL
Another US circumvention case targets Vietnam coated steel
US mills have filed yet another duty-circumvention case versus imports of Vietnamese coated flat-rolled steel, with the latest case targeting products made from Taiwanese substrate.

The petitions mirror those already filed against imports of Vietnamese cold-rolled and coated products made from Chinese and South Korean substrate.

The cases versus material made from South Korean substrate were launched this week. Those targeting product made from Chinese substrate were filed in November 2016 and decided in favor of US mills in May - paving the way for the additional petitions.

The investigations targeting South Korean and Chinese substrate were filed against both cold-rolled and coated exports. The case involving Taiwan targets only coated product because there are no US duties on Taiwanese cold-rolled coil.

Taiwanese coated flat-rolled steel - a category that includes products such as Galvalume and galvanized material - was hit with anti-dumping duties of 10.34% in July 2016.

And US mills contend that Taiwanese steelmakers adopted the same measures as Chinese steel mills to circumvent duties on coated products – namely, redirecting shipments of substrate to Vietnam, where it could be coated and then exported to the United States as Vietnam-origin material.

“Allowing Taiwanese producers to continue this tactic unabated would seriously undermine the effectiveness of the department’s orders and should be addressed immediately,” the US mills said in their petition, which was dated Tuesday June 12 and addressed to US Commerce Secretary Wilbur Ross.

Shipment shuffle
US mills argued that their position is supported by import data.

Taiwan shipped 603,229 tonnes of coated flat-rolled steel to the United States in 2015, before its exports to the US were hit with duties. That number fell by 18.1% to 494,340 tonnes in 2016 – indicating that the anti-dumping duties were having their intended effect.

At the same time, Vietnamese exports of coated flat-rolled steel to the US rose to 330,143 tonnes in 2016 - more than 10 times the 28,764 tonnes recorded in 2015.

According to domestic mills, that surge was mostly the result of producers in China circumventing duties – Chinese coated flat-rolled steel is subject to combined US anti-dumping and countervailing duties of more than 450% – but stemmed in part from Taiwanese circumvention, too.

The petition versus Taiwanese substrate was filed jointly by California Steel Industries, Steel Dynamics Inc, Nucor, ArcelorMittal USA, and U.S. Steel.

American Metal Market's price assessment for cold-rolled coil stands at $50 per hundredweight ($1,000 per ton), up 19% from $42 per cwt ($840 per ton) at the beginning of the year and up 27.4% from $39.25 per cwt ($785 per ton) a year ago.

The hot-dipped galvanized base price assessment has followed a similar trend. That price stands at $49.50 per cwt ($990 per ton), up 17.9% from $42 per cwt at the beginning of the year and up 26.9% from $39 per cwt ($780 per ton) a year ago.

Prices for cold-rolled and coated steel have been driven sharply higher by trade actions, and in particular by the Section 232 tariffs and quotas versus steel imports.

Critics of the unconventional trade measures argue that the 232 and circumvention probes allowed the US government to impose duties on imports without first proving that domestic mills are being injured by the foreign materials. US mills must first prove injury to receive relief in traditional anti-dumping and countervailing duty cases.
Steel Prices | Related Articles
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Flat Steel Products Trade Log, June 14, 2018
The latest bids, offers and deals in the global markets for hot-rolled coil, cold-rolled coil, hot-dipped galvanized coil, pre-painted galvanized iron, steel plate, steel sheet and other flat steel products.

Latest transactions: HRC

Hot-rolled coil
East China, domestic, commercial-grade HRC (4.5-12mm), traded 4,300-4,330 yuan ($671-676) per tonne, including VAT.

North China, domestic, commercial-grade HRC (4.5-12mm), traded at 4,240-4,260 yuan per tonne, including VAT.
Steel Prices | Related Articles
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Long Steel Products Trade Log, June 14, 2018
The latest bids, offers and deals in the global markets for rebar, wire rod, steel beams and other long steel products.

Latest transactions: rebar

Rebar
East China, domestic, grade III 16-25mm rebar, traded at 4,140-4,180 yuan ($646-653) per tonne, including VAT.

North China, domestic, grade III 16-25mm rebar, traded at 3,950-3,980 yuan per tonne, including VAT.
Steel Prices | Related Articles
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Semi-finished Steel Products Trade Log, June 14, 2018
The latest bids, offers and deals in the global markets for steel billet, slab and bloom.

Latest transactions: billet

Billet
Russia, export, billet, traded at $515 per tonne fob ($538 per tonne cfr), to Egypt.

China, billet, domestic, traded at 3,720 yuan ($582) per tonne, including VAT, at 3pm.
 
Steel Prices | Related Articles
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DAILY SCRAP REPORT: Prices rise again as Turkish mills continue bookings
Turkish scrap import prices have continued to increase on Thursday June 14, with the mills remaining active in the deep-sea scrap markets.

A steel mill in the Iskenderun region booked a European cargo, comprising 18,000 tonnes of HMS 1&2 (75:25) at $343.50 per tonne and 12,000 tonnes of bonus at $364 per tonne cfr.

Following the news of this deep-sea trade, the daily indices went up on June 14.

Metal Bulletin’s daily index for Northern European HMS 1&2 (80:20) closed at $347.81 per tonne cfr on Thursday, up by $5.90 per tonne day-on-day.

The daily index for similar US material closed at $357.07 per tonne, up by $5.99 per tonne.

This put the premium for US material over Northern European HMS 1&2 (80:20) at $9.26 per tonne on June 14.

After the index closed, however, news of another deep-sea cargo was heard.

A steel mill in the Iskenderun region booked a Canadian cargo, comprising 15,000 tonnes of HMS 1&2 (90:10), 15,000 tonnes of shredded and 20,000 tonnes of plate and structural scrap (P&S) at an average price of $367 per tonne cfr.
 
Steel Prices | Related Articles
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IRON ORE DAILY: Measures to cut pollution in China continue to drive pellet and lump demand
Additional pollution-trimming measures in China lent support to growing demand for iron ore lump and pellets on Thursday June 14.

Metal Bulletin 62% Fe Iron Ore Index: $68.49 per tonne cfr Qingdao, up by $1.47 per tonne
Metal Bulletin 58% Fe Premium Index: $54.19 per tonne cfr Qingdao, unchanged
Metal Bulletin 65% Fe Iron Ore Index: $89 per tonne cfr Qingdao, up by $0.50 per tonne
Metal Bulletin 62% Fe China Port Price Index: 481 yuan per wet tonne (implied 62% Fe China Port Price $65.99 per dry tonne), up by 3 yuan per wet tonne
Metal Bulletin 63% Fe Australian Lump Premium: $0.2300 per dry metric tonne unit, unchanged

Key drivers
Local authorities in north China’s steelmaking hub of Tangshan city initiated another emergency response to air pollution on Thursday.

Measures include a 50-100% stoppage to iron ore sintering and pellet-making operations from 3pm local time on Thursday June 14 to 12pm on Sunday June 17, with a 50% production restriction after that, except for those using denitration facilities, according to sources.

Although such short-term restrictions have been announced several times a month, and some market participants tend to play down their real impact, a local mill source said the duration this time is longer and so it will have more of an impact.

The source added that sintering and pellet-making productions have fully stopped in his mill.

Another source at a steelmaker in Tangshan told Metal Bulletin it has been consistently running those facilities at half capacity due to the intermittent restrictions.

Other market participants pointed out that some pellet-making facilities in the city had been ordered to halve production rates already for about two weeks already.

This has led some mills to buy-in either pellets or lump in the open market to make up for the supply losses.

Pollution-control measures in Tangshan have also included a ban on screening operations at many mills from last weekend to next week, sources said.

Given a spot supply shortage of high-grade iron ore lump at ports in the area - especially those with a low ratio of fines so that no more screening is needed - the prices for such materials, typically screened Newman lump and South African lump, have jumped.

Underlying premiums for Newman lump at Tangshan ports have soared above $0.25 per dry metric tonne unit (dmtu), so it was only natural that the seaborne lump premium caught up on Wednesday, the first mill source said.

BHP has been shipping a lot of unscreened Newman lump to China this year, leading to the availability of both screened and unscreened versions of the brand at Chinese ports.

The price gap between the two versions has widened to as high as 80 yuan ($12.50) per wet metric tonne (wmt) at ports in Tangshan, compared with 50-60 yuan per wmt in the past weeks, a local trader said.

On the fines side, a seaborne cargo of Brazilian Blend fines changed hands on Thursday at almost $0.50 per tonne higher than the previous deal two days earlier, while higher bids were also made for Iron Ore Carajas.

Quote of the day
“So far, there is real consumption need for lump from Tangshan and some expectations for future demand along the Yangtze River - both due to environmental requirements. But... this is just regional demand, so it remains to [be seen] if the momentum for lump premiums will persist,” the trader told Metal Bulletin.

Trades/offers heard in the market
Vale, Beijing Iron Ore Trading Center (Corex), 170,000 tonnes of 62% Fe Brazilian Blend fines, sold at $71.50 per tonne cfr China, laycan July 13-22 (last traded at $71.05 per tonne cfr on Tuesday).

Global Ore, 70,000 tonnes of 65% Fe Iron Ore Carajas, offered at $89.90 per tonne cfr, laycan June 20-29 (bid made at $88.60 per tonne cfr).

Port prices
Pilbara Blend fines remained at 458-464 yuan per wet metric tonne (wmt) in Shandong province and the Tangshan region during the day.

The latest range is equivalent to about $62.60-63.40 per tonne cfr China in the seaborne market.

Dalian Commodity Exchange afternoon close
The most-traded September iron ore futures contract closed at 473.50 yuan per tonne on Thursday, up 2 yuan per tonne from Wednesday’s closing price.
Steel Prices | Related Articles
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COKING COAL DAILY: Seaborne market awaits clear direction
The seaborne coking coal market was quiet on Thursday June 14, as Chinese end users turned away from premium hard coking coal offers.

A trader source said the market remained “cautiously optimistic”, although there were ample cargoes in the hands of traders.

“Seaborne prices remain much lower than domestic [values] and we may see prices maintain their current levels, but a significant rise would be difficult,” he added.

A Chinese end-user source said there was interest in premium low-vol materials at $200 per tonne cfr China basis.

“We still see tightness in domestic supplies of low-ash and low-sulphur materials in the domestic market and, therefore, seaborne prices may not tumble in the near future,” he said.

A source from a Chinese coke producer said that while domestic coking coal prices have retreated this week, because miners are keen to bring down their inventories, prices for top-quality materials remain below seaborne levels.

“It is difficult to gauge the market direction at this stage, so we have decided to wait for the next trade,” he said.

On the Dalian Commodity Exchange, the most-traded September coking coal contract closed at 1,253.50 yuan per tonne, down 2.50 yuan per tonne.

The most-traded September coke contract closed at 2,187.50 yuan per tonne, down 59.5 yuan per tonne. 

Metal Bulletin's premium hard coking coal indices were unchanged on Thursday at $203.59 per tonne cfr China and $199.73 per tonne fob Australia. 

And Metal Bulletin's hard coking coal indices were also unchanged at $192.60 cfr China and $182 per tonne fob Australia.

Metal Bulletin will not be publishing the daily coking coal indices on Friday June 15 on account of a public holiday in Singapore.
Steel Prices | Related Articles
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Steelmaking Raw Materials Trade Log, June 14, 2018
The latest bids, offers and deals in the global markets for iron ore, pig iron, direct-reduced iron and other steelmaking raw materials.

Latest transaction: iron ore

Iron ore
Vale, Beijing Iron Ore Trading Center, 170,000 tonnes of 62% Fe Brazilian Blend fines, sold at $71.50 per tonne cfr China, laycan July 13-22.
Steel Prices | Related Articles
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ASIA
CHINA HRC: Domestic prices take a pause as demand declines
China’s domestic hot-rolled coil prices halted their recent rises on Thursday June 14 amid weaker demand.

Domestic
Eastern China (Shanghai): 4,300-4,330 yuan ($671-676) per tonne, widened down 10 yuan per tonne
Northern China (Tianjin): 4,240-4,260 yuan per tonne, unchanged

HRC prices were flat or down slightly in the domestic Chinese market today despite a continued rally in the futures market, dragged down flaccid demand.

Although supply remained short, which helped keep HRC prices close to their recent peaks, downstream demand was not strong enough to push prices higher.

Profits among downstream cold-rolled coil buyers have been quite minimal, which has made them acquire product only when necessary, traders told Metal Bulletin.

Prices in the north of the country were unchanged today and trading was less active compared with Wednesday as buyers adopted a wait-and-see position.

Trading was a bit more active in eastern China, especially in Shanghai, where prices saw slight declines, traders said.

Export
Metal Bulletin fob China HRC Index: $593.51 per tonne fob, down $1.16 per tonne

Offers were heard at $595-605 per tonne fob, and bids were heard at $585-590 per tonne fob, the same as a day earlier.

A deal involving 10,000 tonnes of HRC was heard concluded at $593 per tonne fob a day earlier, a trader in eastern China said.

The order was thought to be a stockist looking to replenish inventory, rather than a new booking by an end user.

Participants expect new cargoes may be booked by stockists at $590-595 per tonne fob, and end users are likely to maintain their wait-and-see approach.

Market chatter
“The rally in the futures market didn’t lift the spot market today because of the shrinkage in demand,” a domestic trader in eastern China said. “We expect futures prices to go higher in the days to come, as they are relatively cheap compared with spot prices.”

Shanghai Futures Exchange
The most-traded October HRC futures contract closed at 3,979 yuan per tonne on Thursday, up 16 yuan per tonne from a day earlier. 

Steel Prices | Related Articles
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CHINA REBAR: Domestic prices rise on lower inventories
China’s domestic rebar prices kept their upward trend intact on Thursday June 14 as spot market stocks declined.

Domestic
Eastern China (Shanghai): 4,140-4,180 yuan ($646-653) per tonne, up 30-40 yuan per tonne 
Northern China (Beijing)): 3,950-3,980 yuan per tonne, up 20-30 yuan per tonne

The inventory of rebar in major domestic Chinese markets continued to decline over the past week due to maintenance outages and environmental inspections at producers, which pushed up rebar prices, market sources said.

The procurement rate rose slightly, with some buyers concerned over yet further price increases.

Export
Metal Bulletin fob China Rebar Index: $552.50 per tonne, up $0.62 per tonne

Offers were at $560-565 per tonne fob, the same as in past couple of days.

Bids were heard at $540-545 per tonne fob, against $535-545 per tonne fob a day earlier.

Some buyers were planning to book the product to replenish inventories as they worried that domestic prices would continue to rise, but their bids were still much lower than offers.

Therefore it looks like transactions will still be hard to conclude in the next few days, said participants.

Market chatter
“Now China’s mills are offering rebar for July and August shipments, when it will be the rainy season in many markets in Southeast Asia. That means buyers are unlikely to raise bids too much due to the weak demand [during those two months],” an export manager at a northeastern Chinese mill said.

Billet
As at 3pm, billet was being traded at 3,720 yuan per tonne including VAT in Tangshan, up 20 yuan per tonne from a day earlier.

Shanghai Futures Exchange
The most-traded October rebar futures contract closed at 3,897 yuan per tonne on Thursday, up 38 yuan per tonne from a day earlier.
Steel Prices | Related Articles
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Taiwanese scrap import prices rebound on limited supply
Import prices for containerized heavy melting scrap (HMS) in Taiwan rebounded this week after suppliers withdrew offers, causing some supply tightness in the spot market.

Metal Bulletin’s assessment of import prices for United States-origin HMS 1&2 (80:20) sold into Taiwan was $330-332 per tonne cfr for the week ended Thursday June 14, up from $325 per tonne from a week earlier.

US-origin scrap was offered at $335-338 per tonne cfr Taiwan during the week, up from from $330 per tonne in the previous week.

Deals were concluded at $330-332 per tonne cfr Taiwan for US-origin scrap, up from $325 per tonne cfr Taiwan last week. 

But demand was not strong, with end-users either staying away or buying only small quantities, according to market sources. A major buyer said it had not purchased any imported materials this week.

Bids for US-origin containerized cargoes were at $325 per tonne cfr Taiwan in the earlier part of the week, before climbing to $330 per tonne cfr Taiwan by Thursday.

“Prices have recovered because suppliers are no longer willing to offer cargoes as low as $325 per tonne like how they did last week. They have either withdrawn their low offers or are not offering,” a Taiwanese trader said.

Market sources said the previous week's prices were too low for suppliers to accept and that buyers had no choice but to bid higher in order to secure scrap cargoes.

The uptick in demand in the Turkey spot market had also caused bullish sentiment to return to the spot market.

“Another key factor is that Turkish import prices have recovered slightly and suppliers are optimistic that they can find buyers willing to pay higher prices in the near term,” a second Taiwanese trader said.

The seasonal lull in demand in the Taiwan steel market did not dampen negotiation levels this week and was not able to counteract the $5-10 per tonne hike in offers by scrap suppliers this week.

Bulk Japan-origin HMS 1&2 (50:50) scrap cargoes were offered at $350 per tonne, although there were no deals heard done.
Steel Prices | Related Articles
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East Asian stainless steel prices track nickel lower
Prices for stainless steel in East Asia fell slightly during the past week after their previous two-week surge due to lower offers from China and mild losses in the nickel market.

Metal Bulletin’s price assessment for benchmark 304 stainless 2mm trimmed cold-rolled coil was $2,250-2,330 per tonne cif East Asian ports for the week ended Wednesday June 13, down $10-20 per tonne from a week earlier.

Metal Bulletin’s price assessment for benchmark 304 stainless trimmed hot-rolled sheet was $2,210-2,310 per tonne cif East Asian ports for the same period, down $50 per tonne week on week.

Trading activity was still thin over the past week, with some participants continuing to stay out of the export market after the previous weeks’ price hikes by China.

Deals involving stainless untrimmed CRC from private mills in China were reported at around $2,220 per tonne fob, equivalent to $2,260-2,270 per tonne cif for the trimmed product that Metal Bulletin assesses. That range is $80-90 per tonne lower than the previous week’s transaction prices for stainless CRC.

Export offers stopped increasing during the week following the drop in nickel prices, while some Chinese mills continued to suspend their offers.

“Prices seem to be correcting somewhat, after peaking last week,” a Chinese steel processor source said on Wednesday.

One trader in Taiwan observed Chinese stainless steel offers falling by about $30-45 per tonne for 304 grade products compared to a week earlier.

Stainless CRC from China was heard offered at $2,250-2,330 per tonne cif, while offers for the Taiwanese product stood at $2,290-2,380 per tonne cif.

Tsingshan Holdings’ Indonesian operations were said to be asking for about $2,260-2,280 per tonne cif for stainless CRC.

China’s offers for stainless untrimmed hot-rolled coil were equivalent to $2,210-2,310 per tonne cif for the trimmed sheet product that Metal Bulletin assesses. Offers on the lower end of that range were likely from smaller, private mills, sources said.

Nickel prices declined, but remained at elevated levels. The base metal’s previous upward momentum had been pushing stainless steel offers up since April. The three-month nickel contract on the London Metal Exchange ended Wednesday’s official trading session at $15,235-15,250 per tonne, down $450-455 per tonne from a week earlier.

Buyers are only agreeing to the current offers in the market if they urgently need materials, and are otherwise taking a wait-and-see approach, a second Taiwanese trader said.

“China’s prices may be falling a bit, but they’re still pretty high and difficult for customers to accept,” the trader added.

Import demand in the region is not strong enough to support any price increments in the near future, sources said.

In Taiwan, buyers are refraining from booking stainless steel from China while the territory conducts anti-dumping and countervailing investigations into Chinese steel. The trade probe is set to end on June 17.

A major mill in northern China is still not taking orders while it awaits clearer price directions.

“[The mill] is planning to issue very high new offers of around $2,300 per tonne cif for stainless HRC and $2,450 per tonne cif for stainless CRC,” an Asia-based trader said on Wednesday. Market participants believe those intended offer levels will not be workable.

China’s domestic segment likewise lost some of its gains from the previous week.

Prices for 304 stainless CRC in the country’s major Wuxi market were at 15,500-15,900 yuan ($2,420-2,483) per tonne including VAT on Wednesday, down 200-300 yuan per tonne from a week earlier.

Prices for 304 stainless HRC stood at 15,000-15,100 yuan per tonne on the same day, down 600 yuan per tonne week on week.
Steel Prices | Related Articles
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China AM: Coke futures surge ahead
China’s coke futures surged ahead during morning trading on Thursday June 14, while finished steel and iron ore contracts saw only minimal fluctuations.

Futures closing prices – morning session
Shanghai Futures Exchange
October rebar: 3,885 yuan ($607) per tonne, up 3 yuan per tonne
October hot-rolled coil: 3,971 yuan per tonne, down 2 yuan per tonne

Dalian Commodity Exchange
September iron ore: 473.50 yuan per tonne, up 1 yuan per tonne
September coking coal: 1,262 yuan per tonne, unchanged
September coke: 2,182 yuan per tonne, up 30 yuan per tonne

Raw materials
Metal Bulletin’s 62% Fe Iron Ore Index stood at $67.02 per tonne cfr China on Wednesday, down $0.20 per tonne from Tuesday.

Metal Bulletin’s fob Australia Premium Hard Coking Coal Index increased $0.58 per tonne on the same day to $199.73 per tonne.

Key market news
East Asia’s stainless steel prices fell slightly over the past week due to lower offers from Chinese suppliers and mild losses in the nickel market. Metal Bulletin’s price assessment for benchmark 304 stainless 2mm trimmed cold-rolled coil was $2,250-2,330 per tonne cif East Asian ports for the week ended Wednesday June 13, down $10-20 per tonne from a week earlier. Metal Bulletin’s price assessment for benchmark 304 stainless trimmed hot-rolled sheet was $2,210-2,310 per tonne cif East Asian ports for the same period, down $50 per tonne week on week.

Steelmakers in China produced 81.13 million tonnes of crude steel in May, up 8.9% from a year ago, the National Bureau of Statistics said on Thursday June 14.

The country produced 36.48 million tonnes of coke last month, down 1.6% on the year, according to the NBS data. Output totaled 175.96 million tonnes in the first five months, 2.9% lower than a year earlier. 

Metal Bulletin’s fob China Rebar Index was at $551.88 per tonne on Wednesday, unchanged from the previous day.

Metal Bulletin’s fob China HRC Index stood at $594.67 per tonne on the same day, down $0.58 from Tuesday.
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Chinese steel output up in May
China’s crude steel and finished steel output both rose year on year in May, helped by higher prices and improved producer margins.

Steelmakers in China produced 81.13 million tonnes of crude steel last month, up 8.9% from a year ago, the country's National Bureau of Statistics (NBS) said on Thursday June 14.

The country’s finished steel output also rose 10.8% year on year to 97.07 million tonnes, the bureau said.

The profit margin on major steel products, such as rebar and hot-rolled coil was around 1,000 yuan ($156) per tonne in May, which led producers to increase production, market sources said. 

Eastern Chinese rebar prices averaged 3,958 yuan per tonne last month, up 440 yuan per tonne from 3,518 yuan per tonne a year earlier, according to Metal Bulletin’s price archive.

The monthly average for HRC prices in eastern China was 4,225 yuan per tonne in May, up 1,090 yuan per tonne from an average of 3,135 yuan per tonne a year earlier.

Over the first five months of 2018, Chinese mills produced 369.86 million tonnes of crude steel, up 5.4% on the year, while output of finished steel products also rose 6.2% annually to 434.67 million tonnes, the NBS said.
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MIDDLE EAST
TURKEY LONG STEEL EXPORTS: Prices up on costlier scrap, recovering demand
Turkish rebar and wire rod export prices have continued to recover over the past week, in line with increasing demand and scrap costs, sources said on Thursday June 14.

Metal Bulletin’s weekly price assessment for rebar exports out of Turkey was $545-550 per tonne fob actual weight on June 14, up from $540-545 per tonne assessed last week.

Domestic mills raised their offers to $550-560 per tonne fob on an actual weight basis, while bids were around $540-545 per tonne, sources said.

Demand was expected to pick up after the United States decided to impose its Section 232 tariffs on imports from the EU, Canada and Mexico, ending their exemption period. This made it possible for Turkish material to be competitive again in the US market.

Additionally, demand in Islamic countries is expected to recover after the end of the Islamic holy month of Ramadan this weekend.

The increasing scrap costs were also pushing up rebar prices, according to sources.

Metal Bulletin’s daily index for Northern European HMS 1&2 (80:20) was $347.81 per tonne cfr on June 14, up from $337.97 per tonne on June 7.

Meanwhile, export wire rod prices have also increased this week for similar reasons.

Metal Bulletin’s weekly price assessment for wire rod exports out of Turkey was $565-575 per tonne fob, up from last week’s $560-570 per tonne.
 
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TURKEY LONG STEEL: Rebar prices slip, wire rod stable
Turkish domestic rebar prices have gone down slightly on US dollar basis due to weakening Turkish lira, sources said on Thursday June 14.

Metal Bulletin’s weekly price assessment for Turkish domestic rebar was $540-550 per tonne ex-works on June 14, narrowing down on the top-end of the range from $540-555 per tonne assessed on June 7 last week.

The downturn in prices is because the Turkish lira is depreciating against the US dollar, while the country’s steel mills sell rebar locally in lira.

The lira was trading at TRY100 to $21.61 on June 14, down from TRY100 to $22.09 on June 7, according to exchange rate website Oanda.com.

The domestic rebar price in the Istanbul region was at $550-560 per tonne ex-works, while the Karabük region price was $545-550 per tonne.

The Izmir and Iskenderun regions were trading the material at $540-545 per tonne ex-works.

Meanwhile, domestic wire rod prices in the Turkish local market have not changed in the past seven days.

Metal Bulletin’s weekly price assessment for domestic wire rod was unchanged week on week at $570-580 per tonne ex-works on June 14.
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EGYPT STEEL BILLET, REBAR: Billet import prices rise in new deals, domestic rebar steady
Imported steel billet prices in Egypt rose this week but domestic rebar prices were unchanged, sources told Metal Bulletin on Thursday June 14.

Metal Bulletin’s weekly price assessment for domestic rebar in Egypt on June 14 was steady week-on-week at E£12,525-12,528 ($700) per tonne ex-works.

The country’s rebar biggest producer, Ezz Steel, is still offering material at E£12,528 per tonne ex-works, including 14% VAT, while another major domestic producer, Beshay Steel, is offering rebar at E£12,525 per tonne on the same basis.

Electricity costs will increase by 4% in Egypt on July 1, so rebar prices are likely to increase.

The country is importing rebar from Saudi Arabia, however, and this may increase the level of competition in the market.

Imports from Saudi Arabia are not subject to duty, but Egypt imposes anti-dumping duty on rebar imports from China, Ukraine and Turkey.

Meanwhile, Metal Bulletin’s weekly price assessment for steel billet imported into Egypt was $530-538 per tonne cfr on Thursday, rising from $525-530 per tonne cfr previously.

Russia-origin billet was booked at $538 per tonne cfr, and Iran-origin billet was booked at $530 per tonne cfr, but the tonnages involved in these deals could not be confirmed at the time of publication.
 
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TURKEY STEEL BILLET: Rising scrap costs push billet prices up
Turkish billet prices have continued to increase over the past week, in line with the rising cost of steel scrap, sources said on Thursday June 14.

Suppliers in the CIS region were trying to increase their offer prices following the uptick in deep-sea scrap import prices into Turkey.

Steel mills in the CIS region were heard offering billet at around $530-535 per tonne cfr Turkey, but customers were showing no interest in imports at any price higher than $520 per tonne.

The import price in Turkey for steel billet was assessed by Metal Bulletin at $520-530 per tonne cfr on June 14. This was up by $10 at both ends of the range from the assessment on June 7.

Metal Bulletin’s daily index for Northern European HMS 1&2 (80:20) was $347.81 per tonne cfr, also on June 14, up from $337.97 per tonne on June 7.

The increase in scrap costs raised the domestic and export billet prices in Turkey too.

Metal Bulletin’s weekly price assessment for domestic billet was $530-535 per tonne ex-works, up from the $520-530 per tonne of last week.

And the weekly price assessment for billet exports out of Turkey was $535-540 per tonne fob, up from the last week’s $520-525 per tonne.
 
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EUROPE
EU safeguard case 'will boost domestic flat steel prices, hurt distribution'
The expected preliminary decision in the current EU safeguard case into steel imports is likely to result in higher domestic prices for flat steel products, but it will also have repercussions for independent steel distributors, market sources have told Metal Bulletin.

“The [provisional] safeguard measures will come soon, most likely in July, but the effect they will have will depend on the way they are set,” an Italian distributor said on Thursday June 14.

“Basically, we can expect support for a rise in prices, but the more important effects will be seen after the definitive measures are settled,” he added.

The European Commission (EC) is expected to impose preliminary safeguard measures on steel imports in early July this year.

It opened an investigation into such products in late March, in an attempt to prevent the redirection to the EU market of steel shipments originally destined for the United States but diverted because of that country’s new import tariffs.

The announcement of preliminary measures in the safeguard case will probably be used by European steelmakers as a reason to increase prices, according to market sources.

In the meantime, steel coil buyers in Europe have mostly been holding back from making new deals for imported material before any measures are set. Buyers have also been reported to be sourcing more material from domestic producers to avoid risks related to the case.

“It is clear that there will be an effect from the safeguard case, and as always it means that prices are going to move up in the short term,” a second source said.

“It is important to see what position the EC will take with countries such as Turkey, because Turkey has begun a similar investigation and this could affect imports from the EU into Turkey,” he added.

Metal Bulletin’s price assessment for domestic hot rolled coil (HRC) in Southern Europe was €500-540 ($588-635) per tonne ex-works on June 13.

The corresponding assessment for domestic HRC in Northern Europe was €560-570 per tonne ex-works.

The Turkish ministry of economy started an investigation into the effects of steel imports on the country’s domestic steelmaking industry in April this year. The probe will look at flat, long and stainless steel materials, along with steel tube and pipe products.

In Europe, while the market sources believe that mills are most likely to achieve price rises due to the EC’s preliminary measures, business for distributors is expected to be injured.

According to the rules of the World Trade Organization (WTO), the EU could impose any provisional measures in its safeguard case for as long as 200 days. But the EC is more likely to choose quotas over tariffs as a preliminary measure in this instance, according to a trade lawyer and other market sources.

If tariffs were chosen as a preliminary measure, they could be at least partially offset by domestic price rises in Europe. Quotas, on the other hand, will further reduce the availability of the material, sources said.

The EC has already set definitive anti-dumping duties on HRC from China, Russia, Brazil, Iran and Ukraine. It has also set similar duties on cold rolled coil (CRC) from China and Russia, and on hot-dipped galvanized coil (HDG) from China.

The combination of these existing trade defence measures in the EU and those that arise from the safeguard case will limit the availability of material from countries that were not included in the anti-dumping cases, according to market sources. And this, in turn, will have a negative effect on independent service centers, stockholders and traders.

“We are all very concerned about the effects of the safeguard [procedure] in the medium term. If [the measures] were to be set by product and country, it would be a disaster for distributors and end-users,” a large Italian distributor said.

“If quotas were chosen… in this case, which is the most likely result, then they would be calculated based on a three-year history of imports,” a German trader said.

“But three years ago, China and Russia and others were shipping material into Europe, [and] now their volumes have dropped. So it could be a disaster for companies not affiliated with mills, because there will not be enough material in the market for independent buyers. And mills might get too much control over the pricing in Europe,” he added.

HRC import volumes from China, Russia, Ukraine, Brazil and Iran decreased by 44.5% year-on-year to 898,000 tonnes in the six months from October 2017 to March 2018, according to data from European steel association Eurofer.

The EC set its definitive anti-dumping duties into imported HRC from those countries in October last year.

Over the same period, HRC export volumes from Turkey increased by 27.2% year-on-year to 1.10 million tonnes.
 
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European molybdenum oxide, alloy prices drop with demand
European spot prices for molybdic oxide have decreased so far this week on lower deals done in Europe and in Asia, with ferro-molybdenum tracking the move while there is relatively low buying interest, sources said.

European ferro-molybdenum consumers in the steel sector appear satisfied with their long-term contracted intake of alloys at present, while South Korea was closed for a national holiday on June 13. Industry dealers in South Korea have also taken time off around the holiday, so domestic trading is expected to be quiet overall this week, sources said.

Metal Bulletin assessed European molybdic oxide prices at $11.30-11.40 per lb in-warehouse Rotterdam on Wednesday, down from $11.30-11.50 per lb on Friday.

Ferro-molybdenum prices in Europe moved down to at $27.75-28.00 per kg in-warehouse Rotterdam on Wednesday from $27.95-28.50 per kg on Friday.

Only about 40 tonnes of oxide was reported traded between Europe and Asia combined, while under 100 tonnes of alloy was reported traded. Oxide and alloy prices have been decreasing in the past week after climbing the week before. An industry conference in Germany last week saw only muted buying interest for alloy among steelmakers, triggering lower offers from suppliers.

Still, oxide supplies are expected to be relatively tight this year because producers have not mentioned increasing production or any new production projects. That should stem steeper losses in the alloy market if steelmakers signal an extended run in low level buying interest in the near term.

Oxide producers are unlikely to drop prices below $11 per lb in the near term because supplies available on a spot basis are set to be carefully managed, one oxide producer told Metal Bulletin.

Oxide offers from producers such as Climax and Molymet reduced, while rival producers Codelco and Kennecott occasionally made offer prices at the top end of price ranges.

At the start of March, ferro-molybdenum and oxide prices hit annual peaks of $30.80-31.80 per kg and $13-13.20 per lb, both on an in-warehouse basis, respectively. The oxide market was as low as $9.80-9.90 per lb at the end of last year, while ferro-molybdenum was at $24.50-25.10 per kg.

The premium for briquettes over oxide is about 20 cents, with offer prices around $11.50-11.60 per lb at present, one major consumer told Metal Bulletin. The price differential between oxide and briquettes was almost $1 in mid-February when oxide prices were around $12 per lb.

Underlying consumption is strong in the steel sector, where operating rates are running close to or at capacity, there is also some downward pressure on steel prices. There are plentiful stocks of stainless steel in Europe at present, and an EU safeguard investigation into steel imports, which started in March, has weighed on spot business activity. The rate of imports, notably from Asia, continues to pressure European steel prices, however.

The initial rally in European molybdenum markets, which started in November, propelled oxide prices to a three-and-a-half-year high. This was also the case with ferro-molybdenum prices.
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Italian rebar, welded mesh producers see $165 mln fines for alleged price-fixing canceled
Several Italian rebar and electro-welded mesh producers have had fines totaling over €140 million ($164.70 million) canceled after their appeal was upheld by the Italian regional administrative court for Lazio on Tuesday June 12.

Italy’s national competition authority AGCM had initially imposed the fines on August 1, 2017, for alleged price-fixing activity on the national rebar and electro-welded mesh markets between 2010 and 2016.

The companies include Pittini-owned Ferriere Nord, Alfa Acciai, Feralpi, Riva Acciaio, Ferriera Valsabbia, and Ori Martin.

The AGCM, which began its initial investigation in October 2015, looked at fortnightly meetings at the Chamber of Commerce in Brescia, northern Italy, as well as monthly meetings of Nuovo Campsider, a raw materials study group, which is a part of Italian steelmakers association Federacciai.

The AGCM alleged that the Italian steelmakers used the meetings to “simplify the coordination of their respective price policies, taking advantage of the coordination achieved in the procurement policies of ferrous scrap”, according to the document published by the Italian regional administrative court for Lazio.

However, “the cost of scrap, although of considerable importance in the production process, is [not] a univocal parameter for determining the final price”, the court judgement read.

“This is an assertion that has not been adequately demonstrated and that does not take into account the impact of the other productive factors for the purposes of fixing the final sale price,” the judgement continued.

The court also noted “the existence of a widespread practice of individual discounts operated by the companies to individual customers”.

Metal Bulletin’s weekly domestic price assessment for rebar in Southern Europe was €475-500 per tonne delivered on Wednesday June 13, down from €480-500 per tonne on June 6.

Metal Bulletin’s monthly price assessment for domestic grade-E3 scrap in Italy was €285-305 per tonne delivered on May 11, unchanged from April’s settlement.

The AGCM can appeal to the Italian Council of State to overturn the decision to cancel the fines. The Council of State is Italy's highest ranking court for administrative litigation.
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RUSSIA AND CIS
CIS PIG IRON: Price negotiations restart but no deals heard
Price negotiations for pig iron exports from the Commonwealth of Independent States have begun again after a silence lasting from late May, although no new bookings from the key outlets of the United States and Italy have yet been heard.

The US pig iron market, the largest consumer of the raw material in the world, has improved because of the higher prices for scrap and finished steel products in the country. This may be driving the higher pig iron prices in other global outlets, in Italy in particular.

One CIS pig iron exporter estimated the price for the raw material in the US market at $410-415 per tonne cfr, or around $390-395 per tonne fob Black Sea. That is $5 per tonne higher than the prices achieved for bookings in May.

Tulacherment has increased its pig iron offers to the US to $415-420 per tonne cfr, or about $395-400 per tonne fob Black Sea. But this information was received after Metal Bulletin’s price assessment had been published.

That export price assessment for high-manganese pig iron from the CIS region was stable on Thursday June 14 at $385-390 per tonne fob Black Sea, because the higher prices in the US have not yet been accepted by buyers.

Some improvement in the demand for pig iron has been seen in Italy, although Metal Bulletin’s weekly price assessment for imported high-manganese pig iron in the country was $405-410 per tonne cif on June 14, unchanged week on week.

Demand from Italian steel producers had been weak in May - when pig iron for July production and August delivery was on offer from CIS exporters - because “in Italy [steel producers] traditionally plan stoppages [for maintenance] for 2-3 weeks,” a source in Italy told Metal Bulletin. But both traders and steel producers in the Southern European country now need to restock.

Offer prices from the CIS were stable at $405-410 per tonne cfr Italy.

One deal was heard to Eastern Europe at $420 per tonne fob Black Sea for low-manganese pig iron from Tulachermet, but this was understood to have been done last week.

The same supplier’s offers to Western Europe were now at $410-415 per tonne fob Baltic Sea, sources said.

“There were no fresh bookings [in Western Europe], but we will be ready to buy soon because we sold tonnages from stock and buyers are ready to accept higher prices now,” a trader said.

He estimated the workable market price at $405-410 per tonne fob Baltic Sea.

Metal Bulletin’s export price assessment for CIS-origin low-manganese pig iron was also unchanged on June 14 at $405-410 per tonne fob Baltic Sea.
 
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Metalloinvest Q1 earnings up 28% on higher global prices
Metalloinvest, a major global supplier of iron ore, pig iron and hot-briquetted iron (HBI), announced a 28.1% year-on-year rise in its earnings for the first-quarter of 2018 in a financial report published on Thursday June 14.

Earnings before interest, taxes, depreciation and amortization (Ebitda) in January-March reached $675 million, up from $527 million in the first quarter of 2017, mainly thanks to higher prices globally.

Ebitda margin was at a five-year high of 37.2%, compared with 34.7% in the first quarter last year.

“The increase [in earnings] was the result both of the growth in global prices and the increased proportion of high-value-added products in the company’s product mix,” the company said.

In the first quarter, Metal Bulletin’s average export price assessment for high-manganese pig iron from the Commonwealth of Independent States was $365.60 per tonne fob Black Sea. That was 18% higher than in January-March 2017, when the average assessment was $308.60 per tonne fob Black Sea.

The price of pig iron continues to rise and on June 14 the CIS export price was assessed at $385-390 per tonne fob Black Sea. This compared with $345-370 per tonne on December 28 last year.

The company shipped 531,000 tonnes of pig iron during the January-March quarter, up by 12% from 474,000 tonnes in the first quarter of last year.

Metalloinvest also increased its external sales of HBI, shipping 1.189 million tonnes in the first quarter, up by 73% year-on-year from 687,000 tonnes. This was due to the start-up of the HBI-3 Plant at the company’s Lebedinsky GOK facility in July 2017.

The latest offers of HBI made by the company to the export spot market were at $320 per tonne fob Black Sea.

The financial report also showed that, in the first quarter of 2018, Metalloinvest increased revenue by 19.3% to $1.813 billion, from $1.520 billion a year before.

The company’s net income was $416 million in January-March, compared with $391 million in the first quarter of 2017.
 
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NORTH AMERICA
US flat-rolled import prices up on expanded 232
Prices for imported flat-rolled steel in the United States are flat or rising on firm pricing abroad and expanded Section 232 tariffs at home, market participants said.

Surprise tariffs on the European Union, Canada and Mexico have left a void that other countries are looking to exploit, sources said.

Turkey, for example, for months has been including Section 232 tariffs - 25% in the case of steel - in its offers to US customers because, unlike the EU, Canada and Mexico, it was not previously exempt from the trade action.

“Turkey gets here in 45 days – which is quicker than domestic mills,” whose lead times are into August, one East Coast distributor said.

But Turkey alone won’t be enough to fill the void left by the EU, Mexico and Canada – especially given that the latter is the largest supplier of foreign steel to the US, other sources said.

And there are few alternatives available to US buyers, particularly when it comes to hot-rolled coil, one Gulf Coast trader said.

The result is that “in the next couple of months I think we’ll start to see hot-rolled coil shortages... because people aren’t buying 100% of their typical needs,” he said.

Buyers are holding back on orders in part because they expect prices to decline in the second half despite the possibility of shortages, an East Coast trader said.

But he questioned their logic, noting that “service centers might carry two-three months' inventory. So they can stop buying. But a lot of end-users don’t... so they will have to pay more if they need steel,” he said.

Hot-rolled
 In the meantime, American Metal Market’s assessment for imported hot-rolled coil increased to $810-860 per ton cfr port of Houston on Wednesday June 13 from $780-860 per ton previously.

That price range is representative of Turkish material – inclusive of both anti-dumping duties and Section 232 tariffs of 25% - for July shipment and August arrival at US ports, sources said.

European hot band – inclusive of the Section 232 tariffs – has been offered in the Houston area for $900 per ton for late-July production, early-August shipment and mid-September arrival. Meanwhile, a South Korean mill was offering hot-rolled coil to Houston ex-dock, duty paid for $915 per ton for July-August shipment, sources said.

South Korea has agreed to Section 232 quotas to avoid being hit with a tariff.

US buyers aren’t biting on the European or South Korean offers because those prices are too close to domestic mill offers, some sources said. But others said the South Korean offers were competitive on the West Coast, where domestic prices are higher.

American Metal Market’s hot-rolled coil index stood at $44.85 per hundredweight ($897 per ton) as of 3 pm Eastern time on Thursday. And US mills were seeking to push prices up to $900-920 per ton, sources said.

Cold-rolled and galv
American Metal Market’s assessment for imported cold-rolled coil, meanwhile, has widened to $880-930 per ton from $880-910 per ton previously. Prices have inched up on stable or firming pricing for the Chinese and Russian hot-band used by some foreign rerollers, sources said.

That price is representative of Vietnamese, Taiwanese and Turkish material slated to arrive in the US between August and October – Turkish tons are available on a shorter time line – and inclusive of Section 232 tariffs, sources said.

“There is some good potential into the [Great] Lakes with Turkish cold-rolled,” the East Coast trader said. “The 25% duties are not a deterrent... because the [US] prices are so high.”

American Metal Market’s assessment for domestic cold-rolled coil stood at $50 per cwt ($1,000 per ton) Thursday afternoon.

It’s riskier to buy material from Asia due to ongoing trade actions versus Vietnamese cold-rolled and coated steels and given that the dynamics of the US market could change dramatically by October, when material from the Far East arrives.

In the interim, Trump could scrap duties on the EU, Canada and Mexico or increase tariffs on other countries. “The guy is unpredictable... And he can do anything he wants” on trade issues, the East Coast trader said.

US presidential powers are in general kept in check by Congress and the judiciary. But the executive branch enjoys broad power on trade matters.

Commerce Secretary Wilbur Ross recommended Section 232 duties of 53% versus 12 countries in February. Foreign mills and their customers might be able to absorb a 25% tariff but not one of 53%, sources said.

On the galvanized front, American Metal Market’s assessment for imported material with a G30 coating in thicknesses of 0.012-0.015 inch was unchanged at $1,180-1,220 per ton on Wednesday. The assessment for imported cut-to-length plate also held at $840-940 per ton.

Millicent Dent, New York, contributed to this article.
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US domestic, import rod prices stable in wake of 232
Prices for domestic and imported wire rod remain steady due to flat scrap prices and an uncertain near-term outlook in the wake of the Section 232 tariffs of 25% imposed on imported steel products from Canada, Mexico and the European Union on June 1.

American Metal Market’s price assessment for industrial quality low-carbon rod remained at $39.25-41.25 per cwt ($785-825 per ton) this week, with imported wire rod remaining static at $600-635 per ton ($30-31.75 per cwt) due to a lack of fresh activity.

Supplies debated
Market participants provided differing accounts of product availability. “Our supplies are not tight, but I have been limited as to the quantity I can purchase per rolling,” one southern buyer said.

One domestic producer "appears to be making an effort not to let the time between rollings stretch out too much,” he added. “For now, it is working. If it stops working, then shortages will come up.”

A buyer based in the western United States confirmed that “everything is pretty much taken care of” in terms of supplies and size availability.

However, a second southern buyer said that “wire rod mills are already having shortages and can’t make full deliveries.”

“I’m okay, but my yard got pretty empty last month,” he added. “Some wire mills are on allocation.”

Price increases not expected in the near term
Since the 232 tariffs have been in full effect, the obvious and most pressing question is whether mills will raise prices, and if so, when. The prevailing sentiment amongst market participants appears to be that prices will remain stable until there is greater clarity on what will happen with the Section 232 tariffs.

“I have heard nothing about prices increases,” said the first southern buyer. “It feels like everyone is waiting to see what the tariff’s effects will be and how long they may be made to last.”

“Maybe the confusion is helping to keep the market from jumping to conclusions and driving up prices similar to 2007 and 2008,” added the buyer.

“I thought prices were reaching the ceiling, but now you have to play the long game in waiting to see what the mills do,” said the western buyer. “If the tariffs are out there for a month or six weeks then they’ll raise prices.”

Future of 232 and Nafta negotiations still fluid

With the Section 232 tariffs in effect, market participants were divided on how long the US will keep the measures in place. “232 is here, it’s locked in and it’s happening,” said the second southern buyer. “My gut call is they’re going to be here at the end of the year.”

That same buyer hedged his assessment on the future of the tariffs however by commenting that "nobody can predict Trump’s behavior.”

However, a third buyer from the south felt that the tariffs “won’t last long,” and that “Naafta (North American Free Trade Agreement) will be blown up.” He added that he anticipated separate agreements being made with Canada and Mexico, with Canada receiving the more favorable arrangement of the two.

Turkish exporters wait for uptick from US customers
Prices are around $580 per tonne to $620 per tonne fob port of export from Turkey, for mesh quality and drawing-quality rod respectively, said one Turkish exporter on June 12.

“Domestic demand is good. Export demand is not bad,” he said, speaking of market conditions in Turkey. “We are waiting for US customers to buy wire rod from us.”

Still, inclusive of 232 duties and a freight rate of $20 per tonne, cfr prices could come out to $675 to $720 per ton ($744-$794 per tonne), according to American Metal Market calculations. That does not include anti-dumping and countervailing duties of 4.74% to 7.94% and 3.81% to 3.84% levied on Turkish rod imports in May, however. 

US rod imports swelled to 123,383 tonnes in May, the highest since July 2017, led by surges from Canada, Japan, Brazil and Germany, according to preliminary US license data. Canada shipped 43,941 tonnes here in May, the highest in at least two years and well above its 2017 monthly average of 31,600 tonnes, while Brazil landed 21,505 tonnes and Germany shipped 27,584 tonnes.

Brazil has a 2018 quota of 94,548 tonnes on hot-rolled bars and rods in irregular coils, a category that includes wire rod, according to US Customs and Border Protection. Brazil has landed 78,431 tonnes of rod through May, according to US Census and license data.

Nat Rudy, New York, contributed to this report.

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US ferrous scrap export prices diverge by coast
Ferrous scrap export prices from the two US coasts diverged slightly this week, as East Coast 80:20 heavy melt prices bounced up by $6 per tonne, while No 1 heavy melt from the West Coast dipped by some $3 per tonne, fob export.

Still, cfr prices to Turkey and South Korea - the destinations for two recent cargo sales - are largely stable.

One East Coast exporter sold a 42,000-tonne cargo to a Turkish mill around Thursday June 7 at $347 per tonne cfr for 80:20 heavy melt and $355 per tonne for shredded scrap. That’s largely in line with three US-origin cargo sales to Turkey at $355 per tonne cfr for shredded grades the previous week.

But heavy melt prices to Turkey have bounced up noticeably, with this latest cargo - for 34,000 tonnes - rising by $5-7 per tonne from $340-342 per tonne cfr last week.

Turkish mills booked a flurry of cargoes during the week ended June 8, securing almost 250,000 tonnes of scrap. Market participants expect prices to Turkey to remain firm in the coming days, although one US exporter was heard to offer 80:20 heavy melt at $349 per tonne recently - a tad higher than the latest sales.

Meanwhile, West Coast prices have trended down slightly. One South Korean mill booked No 1 heavy melt at $357.50 per tonne cfr, down some $3 per tonne from a US deal to South Korea around May 31. The previous cargo was sold to a different South Korean mill, according to one Asian mill source.

In the meantime, East Coast dock buying prices remain largely steady, although Boston prices for heavy melt and other cut grades bumped up by $5 per gross ton, according to American Metal Market’s assessment on June 13.

Three regional dealers to export yards are bracing for a potential $10-per-ton drop in No 1 heavy melt selling prices to East Coast exporters, which could happen as soon as June 15.

Still, “they are talking down but nothing firm yet,” according to one dealer, who sells to Boston exporters.

“Prices have been relatively steady [into East Coast yards] the last few weeks,” this dealer said.

Another dealer also characterized prices for most grades as “stable.”

Big exporters are “worried about covering their sales” in terms of securing enough supply to make sales through the end of 2018, one dealer in the New York region said. He sells significant tons but has recently secured $300 per ton for No 1 heavy melt at New York docks.

“Demand’s there but there’s not a lot of scrap around” for exporters, he said.

As a result of the two export cargoes, American Metal Market’s weekly East Coast ferrous scrap export index for heavy melt rose to $326 per tonne fob New York on June 13 from $319.59 a week earlier, while the shredded scrap index was steady at $334 per tonne fob New York.

On the West Coast, the heavy melt index fell to $332.50 per tonne fob Los Angeles from $335.50 per tonne in the same comparison.


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US welded tube, pipe prices rise on coil, Section 232
Prices of domestically produced mechanical tubing and standard pipe in the United States increased because of expectations that reduced import competition would exacerbate the effect of higher substrate costs.

Hot-rolled coil prices achieved their highest levels in seven years in June, and the United States imposed a 25% tariff on imports of steel from Canada and Mexico. At the same time, end-user demand for mechanical tubing and standard pipe is growing in many sectors, according to market participants. 

For mechanical tubing, one East Coast distributor reported that customer activity is still expanding in mining, agriculture and construction, while automotive is steady. The service centers find it challenging to provide enough material. 

"Demand in the US has gone up and supply is reduced," this distributor said. "We've got queries that we've turned down because we don't have any available supplies or inventory... Production at the domestic mills has not increased as much as people expected after the tariffs were put in place."

American Metal Market's monthly pricing assessment for US domestic A513 welded mechanical tubing jumped to a new range of $1,160-1,210 per ton ($58-60.50 per hundredweight) fob mill on Tuesday June 12, from $1,130-1,160 per ton ($56.50-58 per cwt) on Tuesday May 8. 

Since the month-earlier assessment, several nations have negotiated Section 232 quotas and others are assigned 25% tariffs on imports of steel. The tariffs, including the most recent ones confirmed on Canadian and Mexican goods, exert more upward pressure on domestic and import prices, an overseas mill source said. 

"[The tariffs] will affect the hot-rolled coil and the standard pipe prices as well," the foreign mill source said. "In a couple of weeks - the beginning of July and in August - there will be shortages."

American Metal Market's pricing assessment for US domestic A53, grade B, standard pipe climbed to $1,220-1,300 per ton ($61-65 per cwt) fob mill on Thursday, from $1,200-1,220 per ton ($60-61 per cwt) in May.  

American Metal Market's pricing assessment for US import A53, grade B, standard pipe also strengthened, to $1,070-1,100 per ton ($53.50-55 per cwt) cif Port of Houston, from $1,000-1,100 per ton ($50-55 per cwt).

Transaction prices for the domestic items seem destined to move even higher in the second half of June after at least six North American electric-resistance-welded tube mills announced a $40-per-ton ($2-per-cwt) price increase on Monday and Tuesday. A domestic mill source and one southern distributor reported that service centers slowed their purchases in May because most had stocked up while prices were rising sharply. Both sources said those inventories are dwindling and a restocking posture is at hand at the distributors. 

"Demand for everything kind of slowed, but the customers of our customers are busy, so there will be a flurry of orders," the mill source predicted. 

American Metal Market's weekly hot-rolled coil index rose by 1.86% to $44.85 per cwt ($897 per ton) on Thursday. The southern distributor expects hot-rolled prices to fluctuate as the tariffs on Canadian and Mexican sheet have differing impacts regionally and for varying duration. The hot-band trend will influence downstream prices on all welded tube and pipe items. 

"It's all going to track coil," the southern distributor said. "I think Canada is going to be negotiated far ahead of the Mexico negotiations."

Market participants say they have no idea how long the Section 232 actions will remain in place. Therefore, domestic mills have made few commitments to invest in new production to meet customer demand. The East Coast distributor said the stymied imports are not being replaced by domestic availability on an item-by-item basis for welded and seamless mechanical tubing. 

"The end user needs the material and the domestic [volume] that was supposed to go up did not go up, and now they've limited the import supply. What do you do?" the distributor lamented.
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CIT remands Turkey pipe dumping case
The US Court of International Trade (CIT) has sent an anti-dumping determination involving standard pipe from Turkey's Toscelik back to the Commerce Department for re-evaluation.

In its decision on Wednesday June 6, the CIT sided with Toscelik on two issues and agreed with US domestic competitor Zekelman Industries on a third. 

In the final determination in February 2017, Toscelik received a dumping margin of 3.40%. It was the second time the margin was increased upward during the case, after the preliminary margin of 0.96% was adjusted upward to 1.91% in the administrative review. 

At the CIT, a successful motion by Toscelik argued that Commerce improperly calculated a duty drawback adjustment during the investigation of welded carbon steel standard pipe and tube products from Turkey. The department allocated duty exemptions and rebates over the company's full output instead of just the exports to the United States.

"Allocating duty drawback to total production encompasses home market (Turkish) sales, which could not earn a duty drawback, and fails to adequately connect the adjustment of duties forgiven 'by reason of' the products' exportation to the United States," the court wrote, noting that practice "conceptually reintroduces an imbalance in the dumping margin calculation".

On second matter, the CIT agreed with petitioner Zekelman Industries, which argued that Commerce was wrong to grant the Turkish producer a circumstance-of-sale adjustment for warehousing expenses in the manner that it did.  

Toscelik admitted "that the claimed warehousing expenses encompassed costs associated with both manufacturing and storing products for sale", the court wrote. Yet, Commerce said there was "no evidence" of that and the department used an inflated number, according to the court documents. 

The CIT disagreed with Zekelman on a third issue - whether Commerce should have used actual weight or theoretical weight in calculating the anti-dumping margin. Zekelman contended that the department should have used theoretical weight or a conversion to theoretical weight. The court said Commerce properly used actual weight.

The June 6 CIT order remands the case to Commerce to correct or clarify the duty-drawback and warehousing calculations. The court calls for the department to file a re-determination by Tuesday September 4. 

American Metal Market's pricing assessment for US import A53, grade B, standard pipe stands at $1,070-1,100 per ton ($53.50-55 per hundredweight) cif Port of Houston. 
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US files more anti-circumvention cases against Vietnamese flat-rolled steel
US mills have filed duty-circumvention cases versus Vietnamese cold-rolled and coated flat-rolled steel made from South Korean substrate.

The cases mirror petitions filed successfully against Vietnamese imports of the same products made from Chinese substrate.

The petitions targeting Vietnamese cold-rolled and coated steel made from Chinese steel were launched in November 2016 but not decided until May of this year.

US mills have alleged that South Korean steelmakers adopted the same tactics as Chinese steel mills to circumvent duties on South Korean cold-rolled and coated flat-rolled steel.

“Allowing Korea[n] producers to continue this tactic unabated would seriously undermine the effectiveness of the [duty orders] and should be addressed immediately,” the US mills said in their petition, which is dated Tuesday June 12 and addressed to US Commerce Secretary Wilbur Ross.

South Korean coated flat-rolled steel was hit with anti-dumping duties of 8.75-47.49% and countervailing duties of 1.19% in 2016. Korean cold-rolled, meanwhile, was in the same year hit with anti-dumping margins of 20.33-34.33% and countervailing margins of 3.91-58.36%.

US mills want the Commerce Department to impose similar duties on Vietnamese cold-rolled and coated made with Korean substrate. They also want Commerce to launch an inquiry “as soon as possible” and to issue a preliminary determination at the same time it decides whether to start a probe.

Domestic mills contend that the anti-dumping and countervailing duties versus South Korean cold-rolled and coated flat-rolled steel succeeded in reducing imports from the Asian nation. But they argue that void left by South Korea was in short order filled by exports from Vietnam.

Case in point: The US imported 310,665 tonnes of galvanized flat-rolled steel – a key category of coated products – from South Korea in 2015. That number dropped 38.2% to 191,959 tonnes in 2017, according to Commerce figures. Over the same period, imports of Vietnamese galvanized increased nearly sixfold from 22,295 tonnes in 2015 to 124,799 tonnes in last year.

A similar trend played out in the cold-rolled sector, where US imports of South Korean cold-rolled tumbled to 98,224 tonnes in 2017, down nearly 40% from 163,032 tonnes in 2016. Imports of Vietnamese cold-rolled, meanwhile, skyrocketed from 2.70 tonnes in 2014 to 396,096 tonnes in 2016 – a year in which the Southeast Asian nation was the largest offshore source of cold-rolled in the US market, per Commerce data.

Duties are also merited because Vietnam had no hot-rolled steel production capacity until Taiwan’s Formosa Ha Tinh Steel Corp. began production in May 2017, US mills said in their petitions. “As this mill is still in the ramp-up phase, most [cold-rolled and coated] that is made in Vietnam must still be made from imported substrate,” they said.

The petition was filed by US flat-rolled steelmakers California Steel Industries (CSI), Steel Dynamics Inc. (SDI), Nucor, ArcelorMittal USA, and U.S. Steel. CSI and SDI are represented by Schagrin Associated, Nucor by Wiley Rein, ArcelorMittal by Kelley Drye & Warren, and U.S. Steel by Cassidy Levy Kent (USA).

American Metal Market's price assessment for cold-rolled coil stands at $50 per hundredweight ($1,000 per ton), up 19% from $42 per cwt at the beginning of the year and up 27.4% from $39.25 per cwt a year ago.

The assessment for hot-dipped galvanized base has followed a similar trend. It is at $49.5 per cwt, up 17.9% from the beginning of the year and up 26.9% from $39 per cwt a year ago.

Prices for cold-rolled and coated have been driven sharply higher by trade actions - and in particular by the Trump administration's Section 232 tariffs and quotas versus steel imports.
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LATIN AMERICA
Mexican automotive production up 4% in May
Mexico's automotive production increased by 3.90% year on year in May 2018, according to figures released by the country's national automotive association Amia on Tuesday June 12.

Vehicle output reached 352,860 units last month, compared with 339,747 units in May 2017.

Sales in the country's domestic market declined 6.90% year on year in May to 114,492 units from 122,916 units.

Mexico's vehicle exports reached 250,542 units in May, a growth of 9.90% from the same period a year earlier. Amia's export figures no longer include shipments from Nissan, as the carmaker decided not to disclose its export volumes from April 2018.

From January to May, Mexican automotive production reached 1.61 million vehicles, against 1.60 million vehicles in the corresponding period a year before.

The Mexican automotive sector is being threatened by recent policy changes in the United States, such as the ongoing renegotiation of the North American Free Trade Agreement (Nafta).

The US started a Section 232 investigation into imports of automobiles and automotive parts in late May, which could affect the Mexican automotive and steel industries as the US is the main destination for Mexican auto exports.

In the past couple of years, steelmakers such as Ahmsa, Voestalpine, Tenigal and Grupo Simec have announced investments in Mexico to meet demand from the growing domestic automotive sector.

The car sector in Mexico accounts for around 10.6% of the steel consumed in the country, according to national steel association Canacero.
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