NEW DELHI: The imposition of countervailing duty on imports of stainless steel flat products will strengthen the ongoing efforts of Indian industry to move towards 100% quality regime for better safety and health of users.

This will provide a level-playing field to the industry to grow to its full potential after attaining 2nd largest rank in stainless steel production in world in 2016, steel minister Chaudhary Birender Singh said.

A notification issued by the finance ministry dated September 7, 2017, prescribes a total of 18.95% CVD on imports of Stainless steel flat products from China for the next five years.

Steel Secretary Aruna Sharma said, “This is the first case of imposition of CVD on any steel product in India. This would provide the much needed relief to the stainless steel industry from the subsidized imports from China.”

This was one among the many steps taken by the government to help the domestic stainless steel industry. Among the other steps were the imposition of the stainless Sseel quality control order (QCO) and other trade remedial measures.

The CVD investigations were initiated on 12th April 2016 by the Directorate General of Anti-Dumping and Allied Duties (DGAD) in response to a surge in subsidised imports of stainless steel flat products.

Source: By Sarita C Singh, ET Bureau

A coalition of steel pipe producers, including a company in Export, is asking the Trump administration to impose tariffs and take other actions to end the glut of foreign steel.

The American Line Pipe Producers Association sent a letter to President Trump on Thursday complaining that “excess capacity and surging imports” are hurting American pipe manufacturers and the domestic steel industry.

The letter blamed “distortive” trade practices that have flooded the U.S. market with steel and steel product imports in recent years.

“Chinese producers are increasingly shipping greater volumes of dumped and subsidized steel to other countries for production of large diameter line pipe that can then be shipped to the U.S. market at lesser duty rates or, in many cases, duty free,” the ALPPA letter said.

Consequently, coalition members, including Export-based Dura-Bond Industries, have seen their market share decline, along with their production, revenue and employment levels, the letter said.

“As an industry, we are operating at only about 30 percent capacity. This situation is not sustainable,” the letter said.

Dura-Bond and three other companies formed the ALPPA earlier this year in the hopes that the Trump administration would take action to stanch the flow of “unfairly traded imports” and “level the playing field” for domestic pipe producers, said Dura-Bond President Jason Norris.

A Jan. 24 executive order by Trump required the secretary of commerce to develop a plan under which all new, retrofitted, repaired or expanded pipeline within the United States would use American-made materials and equipment.

Dura-Bond and other pipeline manufacturers have pinned their hopes for growth and increasing market share on such a policy – but are worried that no action has been taken.

“We are not asking to stop all imports,” Norris said. “We are only asking for relief for unfairly-traded imports so our company and workers have a chance.”

Dura-Bond is in the process of reactivating the former U.S. Steel McKeesport Tubular Operations and retooling it for the manufacture of smaller, midstream pipe. U.S. Steel idled the plant in 2014 because of the downturn in the oil and gas industry and the glut of cheap imports from overseas.

Dura-Bond’s agreement with U.S. Steel includes the purchase of all the equipment on the 317,000-square-foot site. It is leasing the land and the buildings from the Regional Industrial Development Corp., with an option to purchase at a later date.

“Our products are used to transport American-produced energy, which should be used to fuel our economy and not the economies of other countries that don’t operate under the same rules as we do. Enough is enough,” Norris said.

The letter asked the Trump administration to take immediate action under Section 232 of the Trade Expansion Act of 1962 to “prevent excess capacity and surging imports from harming national security and critical infrastructure by undermining the viability of the U.S. large diameter line pipe industry.”

Section 232 authorizes the commerce secretary to investigate the impact that imports are having on national security.

The letter said any tariff covering steel coil and plate should also include steel pipe in order for it to be effective.

“The domestic line pipe industry has more than sufficient capacity to meet domestic need, and can supply virtually the entire range of line pipe products, using American-made steel,” the letter said. “However, unfairly priced and subsidized imports have dominated the U.S. market for many years, driving down prices and taking market share.”

The letter was CC’d to Commerce Secretary Wilbur L. Ross Jr. and U.S. Trade Representative Robert E. Lighthizer.

Source: STEPHEN HUBA, Trib Live

Analysts at Macquarie initiated U.S. Steel at Outperform today arguing that stable steel prices would be good news for the stock.

Steel stocks like U.S. Steel (X), AK Steel (AKS), Steel Dynamics (STLD), and Nucor (NUE) have been battered in 2017, but haven’t done too badly over the past 12 months, which puts investors in a precarious position: Buy or sell?

So much has depended on the price of steel–and the ability of companies to convert them into earnings. And in a report today, Macquarie analysts David Lipschitz and Xiao Feng contend that the “price outlook has stabilized,” and they “don’t believe prices will plunge to the lows seen in the previous cycle, as inventories and lead times remain supportive.” That’s a great environment for U.S. Steel, they claim, as they start the stock with an Outperform rating and a $31 target price.

prices will plunge to the lows 

They explain why:We believe near-term steel prices are likely to decline modestly due to the delay of Section 232 investigation and uncertainties on the demand outlook. Beyond 2017, our forecast of normalized hot roll coil price is $600/st as we don’t believe prices will plunge to the lows we saw in the previous cycle as inventories and lead times remain supportive. Even with stabilized steel prices in the second half of this year, we expect earnings to be resilient on improved cost structure and the asset revitalization program. Our EBITDA estimates of $1,112m and $1,191m for 2017 and 2018, compare to consensus estimates of $1,077m and $1,243m.

Lipschitz and Feng also started AK Steel and Reliance Steel & Aluminum (RS) at Outperform, while Nucor, Steel Dynamics, and Schnitzer Steel Industries (SCHN) earned Neutral ratings. They initiated Commercial Metals (CMC) with an Underperform rating.

FILE PHOTO: A worker controls a tapping of a blast furnace at German industrial conglomerate ThyssenKrupp AG’s steel plant in Duisburg, Germany December 6, 2012. REUTERS/Ina Fassbender/File Photo

ESSEN, Germany (Reuters) – Thyssenkrupp’s European steel business, expected to be merged soon with its counterpart at Tata Steel, will get a boost from the auto industry’s shift toward electric vehicles, a senior executive at the group said.

Investors and analysts are closely watching any hints from Thyssenkrupp over the restructuring of its steel operations in Europe, with many expecting a merger could mark the first step towards a full exit of the business.

However, Bernhard Osburg, head of automotive sales at Thyssenkrupp Steel Europe, highlighted the potential value of the steel business in future as major car industry customers shift away from combustion engines towards battery technologies.

“Without steel there will not be electric mobility,” he told journalists at Thyssenkrupp’s headquarters late on Tuesday.

“We expect e-mobility to be a positive business case for us,” he added, singling out electrical steel strip and high-strength steel as two products that will see higher demand as more electric vehicles are made.

Thyssenkrupp has been in talks with Tata Steel for more than a year about a merger of both companies’ European steel operations, arguing it was the best way to eliminate overcapacity in the volatile sector.

Thyssenkrupp Steel Europe supplies about 6 million tonnes of steel to the car industry and its supply chain per year, accounting for about half its total annual production.

The automotive industry is Thyssenkrupp’s single biggest customer group, accounting for 9.8 billion euros ($11.7 billion), or a quarter, of group sales. Thyssenkrupp says its components are used in nine out of 10 premium cars, including all models of electric car maker Tesla.

Osburg said electrical steel strip was instrumental in helping extending ranges for electric cars, a key source of concern among prospective buyers, adding the growing need to protect batteries inside cars also required stronger steel.

“Here you need highest strength levels in a confined space,” he said.

GFG Alliance propose a wind farm in the Scottish Highlands to power aluminium smelter plant in Fort William and a steel plant in Motherwell

GMG Alliance plans to pour £170m into renewable energy projects into the Scottish Highlands REUTERS

Up to 54 new wind turbines are set to be installed in the Scottish Highlands by the owners of the UK’s last aluminium smelter.

Renewable energy generated from the Scottish wind farm, proposed by GFG Alliance, will power the infrastructure group’s Lochaber Smelter near Fort William, from the nearby location of Glenshero.

The proposed scheme will also provide electricity for Liberty’s Dalzell steel mills in Motherwell, which forms part of the GFG Alliance group.

Steel required for some elements of the planned wind turbines may be produced locally at the Motherwell steel plant.

GFG Alliance says housing and accommodation for visitors in the Highlands location are part of the £170m investment programme. It will now proceed with a public consultation with the local community.

GFG added that it will consider offering local residents shared ownership into projects at Glenshero and discounts on energy bills for residents living in the vicinity of the windfarm.

Jay Hambro, GFG’s chief investment officer, said the proposed wind farm is a “win-win project” offering clean energy to supply the Scottish metals industry.

On Tuesday, Scottish First Minister Nicola Sturgeon’s unveiled plans for clean energy investment in Scotland, including a bottle deposit scheme.

“We live in a time of unprecedented global challenge and change”, the First Minister said.

“We face rapid advances in technology [and have] a moral obligation to tackle climate change”.

Source: Shafi Musaddique, INDEPENDENT

Along the Detroit and Rouge rivers, Michigan steel workers watch the news out of Washington and hope.

“We still don’t have the orders we used to have,” said Cathy Ferguson, 43, who works at U.S. Steel Corp.’s Great Lakes Works facility in Ecorse. “I still worry if the company is going to be in business when I retire.”

The 17-year industry veteran and her husband, Jeffrey, 41, who also works at the mill, are two of thousands of workers waiting to see what President Donald Trump and his advisers will do to address foreign dumping of steel in the U.S.

Some steel officials anticipate that a Trump crackdown on imports would be a boon for the struggling industry, even as voices calling for the president to avoid a potential trade war with China have grown louder.

That national conversation pits auto companies posting near-record profits against a U.S. steel industry that saw employment fall by over 11 percent in the last decade.

The southeast Michigan industry sees steady work due to demand from Detroit’s Big Three, which means Ferguson and others don’t see a short-term threat of losing their jobs. Still, Ferguson said morale is low.

Workers take a lot of overtime because steel companies aren’t hiring to meet current demand, and it’s unclear if there’s any “upturn” coming for what has been a cyclical industry.

On the campaign trail, Trump was focused on jobs: creating jobs, bringing back jobs, stopping the loss of jobs.

James Allen, president of United Steelworkers Local 1299, which represents workers at Great Lakes Works, said he supports anything that stops foreign steel from coming into the U.S. But Allen said the industry needs more help than a protective tariff against China.

“That won’t bring the jobs back,” he said. “We’ve already been affected; we’ve already laid off members, members have lost their houses, had to move, change jobs.”

Allen has lost around 3,000 workers since taking office five years ago. His local had to freeze wages for a few years after the last contract negotiation to cut costs. Manpower is down, and morale is the lowest he’s seen in the 24 years he’s been in the industry.

‘Surge in imports’

In June, Trump asked the U.S. Department of Commerce to conduct what’s known as a Section 232 investigation into steel and aluminum imports to determine whether they are hurting U.S. national security. If the government finds a threat there, the rarely used measure allows the administration to levy protective tariffs against a country or group of countries.

The Trump administration is expected to argue the military needs domestic steel for military operations and the “dumping” of foreign steel is harming U.S. steel mills, thus threatening national security.

Kevin Dempsey, senior vice president of the American Iron and Steel Institute, which represents U.S. steel companies, said the tariffs would be a start.

“We’re under enormous pressure from high levels of imports (that are) driven largely by a global problem of overcapacity,” he said. “Addressing the surge in imports is very much needed to ensure the survival and viability of the domestic steel industry.”

According to the most recent data from the steel institute, U.S. mills are running at around 74 percent of capacity, up from a year ago but still historically low. As of May, there were around 149,000 people employed at iron and steel mills in the U.S., a roughly 4,000-employee increase from the start of the year, but down about 5.3 percent from January 2012.

That’s caused plant downtime, layoffs and closed facilities around the country.

Lisa Jester, spokeswoman for AK Steel Corp., which has operations in Dearborn near Ford Motor Co.’s Rouge facilities, including a 350-acre site where it employs 1,500, said imports nabbed 30 percent of the U.S. market in June. The company supports the 232 investigation, and Jester declined to say if the company had recently reduced its workforce.

Representatives from U.S. Steel, which employs around 1,700 union members at the Great Lakes Works, did not respond to request for comment.

Meanwhile, Dempsey and Allen said separately the U.S. has always failed to find a permanent solution to import dumping. Allen fears Trump’s attempt won’t be much different.

“They need to do something to prevent (foreign) steel from ever hitting our shores,” Allen said. “Anything in excess of (our) capacity we can’t produce, I understand us importing, but we need to keep the businesses in this country going.”

‘It’s painful for them’

Meanwhile, a growing number of economists, analysts and organizations representing industries that rely on foreign and domestic steel have urged the Trump administration not to impose tariffs. Even though U.S. automakers build vehicles primarily from U.S.-sourced steel, economists say a protective tax on imported steel would give makers of domestic steel the incentive to raise their prices.

That would be a boon for the domestic steel industry, but it would make U.S.-made cars more expensive and push consumers to buy cheaper cars from foreign companies unaffected by the tariff, economists say.

“If (Trump) uses a tariff that raises the prices China sells to us, we will buy less, and China’s exports will fall, and that will hurt them,” said Alan Deardorff, professor of public policy and economics at the University of Michigan. “It’s painful for them, (but) is it more painful for them than our companies that will buy the imports?”

The American Automotive Policy Council, a trade group representing Ford, Fiat Chrysler Automobiles and General Motors Co., said U.S. automakers buy 15 percent of all the steel consumed in the U.S. A vast majority of that is domestically sourced, according to comments the organization submitted in May to the U.S. Department of Commerce.

Tariffs on foreign steel would adversely affect the auto industry, according to those comments: “This would lead to lower sales of domestically built cars and trucks in the highly competitive U.S. auto market, a decrease in U.S. auto exports, and a loss of the jobs that those economic activities support.”

But labor leader Allen and steel officials don’t believe that.

“That’s a really preposterous idea that (tariffs) will cause them to lose money,” Allen said. “When they’re reporting record profits again, and we’re still barely operating.”

Operating at just over 70 percent of capacity is not sustainable over the long term, said Dempsey. The American Iron and Steel Institute executive is confident that U.S. steel companies would absorb rising demand that import tariffs would cause by activating existing facilities that aren’t being used to capacity. That would result in some job increases in domestic steel.

“The president acting to ensure the viability of the steel industry is critical to the automotive industry and others,” Dempsey said.

“It’s only through these collaborative efforts that we’re able to innovate. We think in the long run, it’s in the auto industry’s interest to ensure they have a viable steel industry in the U.S.”

Source: Ian Thibodeau, The Detroit News

U.S. steel stocks have lagged the market so far in 2017, but the groundwork may be set for a strong finish to 2017. On Tuesday, Bank of America analyst Timna Tanners upgraded United States Steel Corporation X 0.89% to Buy and said steel prices are headed higher in the second half of the year.

According to Tanners, reduction in Chinese production coupled with elevated demand will offset any pricing pressures that result from a disappointing resolution to the Section 232 investigation in the United States. After opening the investigation into steel imports earlier this year, President Trump recently said that a final decision on potential restrictions is not a priority for the administration at the moment.

“We’re waiting till we get everything finished up between health care and taxes and maybe even infrastructure,” Trump said in July.

Related Link: Morgan Stanley: Now Is The Time To Forge A Position In US Steel Names

Tanners said some degree of trade protection should be possible for U.S. steel producers, even if it’s not as much as investors had initially hoped.

Hurricane Harvey rebuilding could also provide a bit of a demand boost in the U.S., but Tanners said hurricanes have historically not moved the needle much.

Bank of America has raised its year-end price forecast for hot rolled coil steel by about 5 percent to $700/st.

“We think a rising steel price is not fully anticipated by steel buyers, with many holding off purchases, or investors, with the group underowned and still recovering from its wounds after Section 232 so far has disappointed,” Tanners wrote.

In addition to the new Buy rating and $31 price target for U.S. Steel, Bank of America has Buy ratings on the following domestic steel stocks as well:

• AK Steel Holding Corporation AKS 1.41% ($9 price target)
• Nucor Corporation NUE 1.28% ($73 price target)
• Steel Dynamics, Inc. STLD 1.67% ($44 price target)
• Reliance Steel & Aluminum Co RS 0.93% ($89 price target)

Related Link: NAFTA Round One: Gordon Johnson Weighs In On Free Trade’s Effects On Steel, Manufacturing

Source: Wayne Duggan , Benzinga Staff Writer

FILE PHOTO: Laborers work at a steel plant of Shandong Iron & Steel Group in Jinan, Shandong province, China, July 7, 2017. REUTERS/Stringer

BEIJING (Reuters) – China’s steel rebar futures jumped to their highest in four and a half years on Monday, extending the previous session’s gains on concerns that a furnace fire might spark a new round of safety inspections and closures, tightening supply.

The most-active rebar futures on the Shanghai Futures Exchange rose as much as 5 percent to 4,194 yuan ($642.25) a tonne, their highest since February 2013, as reports of a fire at Bengang Steel Plates Co’s new blast furnace startled the market.

It closed 1.7 percent higher at 4,060 yuan a tonne.

Spot rebar prices picked up 0.9 percent to 4,310.42 yuan a tonne on Friday, showed data from Mysteel website.

The furnace fire is estimated to affect 4,500-5,000 tonnes of daily steel output at Benang, a subsidiary of government-backed Benxi Iron and Steel Group Co. Beyond the impact on Benang itself, analysts and investors worry the incident could trigger stricter safety inspections at mills, bringing production halts and intensifying a supply shortage.

“Under the pressure of strict environmental policy, expectation of tight supply has offset concerns over weak demand downstream which is also likely to be affected by inspections,” analysts from Orient Futures wrote in a note.

The rebar price rise was also supported by strong manufacturing activity data released on Friday, with the Caixin/Markit Manufacturing Purchasing Managers’ Index picking up to 6-month high.

The potential impact of environmental and safety checks is overshadowing a number of industries in the world’s second-biggest economy. Last week, China’s State Administration of Work Safety said it will carry out nationwide safety inspections since this month in various industries, including coal, chemical, transportation and construction.

Meanwhile, to meet politically crucial 2017 air quality targets, the Ministry of Environmental Protection (MEP) said it will launch a new round of inspections starting from September till the end of March.

Steel production in smog-prone Beijing-Tianjin-Hebei region will be limited during winter. Mills in some cities, including top steel producer Tangshan, have been ordered to cut capacity by as much as 50 percent in polluted days.

Meanwhile, the most-traded January iron ore contract on the Dalian Commodity Exchange fell 2 percent to 565.5 yuan a tonne after hitting a high of 598 yuan in early trade.

SOURCE: Reuters

Steel pipe and tube CEOs urge Trump to move forward on import restrictions

• The request came in a letter to President Donald Trump sent Tuesday and signed by 23 pipe and tube chief executives.
• They urge Trump to impose a combination of quotas and tariffs.

Getty Images

The chief executives of 23 pipe and tube manufacturers are urging President Donald Trump to move forward quickly on steel import restrictions, according to a letter obtained exclusively by CNBC.

The Department of Commerce has undertaken an investigation into whether foreign-made steel imports threaten U.S. security. Trump signed a memorandum in late April asking Commerce Secretary Wilbur Ross to prioritize the probe, which could result in higher tariffs for Chinese and other foreign steel firms, to the benefit of the U.S. steel industry.

According to the letter the executives sent to Trump on Tuesday, “Time is running out for the industry and its workers and we urge you take immediate action under the provisions of U.S. law that allow you to intervene to ensure that domestic producers can meet the national security needs of our great country by imposing a combination of quotas and tariffs.”

The executives are members of the Committee on Pipe and Tube Imports (CPTI), a trade association.

The CEOs of ArcelorMittal, Bristol Metals and Boomerang Tube, who signed the letter, said the situation is not sustainable and warned it would only deteriorate further.

“Because the U.S. pipe and tube industry is the third-largest purchaser of flat-rolled steel … reduced pipe and tube production will also greatly harm the U.S. flat-rolled industry,” they said.

“Based on the amount of imports flooded into America now we will not be able to help rebuild Houston,” Robert Griggs, president and CEO of Trinity Products, told CNBC.

“Not one U.S. pipe company will get a lick of work in rebuilding Houston. It will all go to China. The president needs to level the playing field and make it fair. The way it is now, American steel pipe companies will lose the opportunity to rebuild Houston,” said Griggs, who also signed the letter.

During the rebuilding of New Orleans after Hurricane Katrina, Trinity produced 10,000-15,000 tons of steel for infrastructure projects. Trinity Products makes the second-largest large diameter structural pipe, which is used in bridges, tunnels and other heavy construction projects

Executives enclosed a chart of carbon and alloy steel pipe and tube from July 2016 to 2017 showing a steady increase in foreign steel imports since the president announced the investigation.

The CEOs specifically cited China, Korea, Taiwan, Turkey and Vietnam as the major sources of foreign imports into the United States.

“The staggering levels of pipe and tube imports clearly indicates foreign competitors refuse to do so and that is why we support the remedial action,” said Lee Searing, CEO of Searing Industries.

Barry Zekelman, executive chairman and CEO of Zekelman Industries, the largest independent steel tube manufacturer in North America, told CNBC: “The pipe and tube industry has been used as a conduit for foreign steel producers, primarily China, to circumvent duties and decimate our industry for many years. We are tired of playing ‘whack-a-mole.’ The future of our industry is at stake, we don’t want handouts, just fair trade!”

The trade association represents companies that purchase steel from integrated manufacturers to make tubular products. It has 40 members that operate 123 facilities in 32 states and employ more than 40,000 workers.

Source: Lori Ann LaRocco(Senior Editor of Guests)

• Union Minister for Steel, Chaudhary Birender Singh

Seemingly not too happy with the show of PSUs like SAIL and RINL, Steel Minister Chaudhary Birender Singh, has a policy prescription — put to good use the huge $60,000 crore investment made by them and beat private peers.

Acknowledging that things are not as bad for the steel sector as it used to be some two-three years ago, Singh strongly felt that PSUs should develop appetite for special steel as value addition remains the mantra for success.

“PSUs … when they have advantages like captive mines…why don’t they utilise it…why not to put up washeries…why not to go for value addition..special grades of steel,” Singh told PTI in an interview.

“₹60,000 crore has been spent on expansion and modernisation of our PSUs …Their capacities have ramped up but the need today is to produce special steel also,” he said.

Despite India being the world’s third largest producer of steel, it still is dependent on imports for some products and “there is dire need to develop technologies to produce electrical grade and auto grade steel in India to become self-sufficient. Instead of producing just semi-finished and basic steel products, we must produce high value added products, which also get better prices,” he asserted.

Barely a few months back, Singh had minced no words in cautioning PSUs, including domestic giant SAIL, to “perform or perish”, saying complacency cannot be tolerated when private players are excelling on various parameters.

Chairing a meeting of chiefs of top steel PSUs, the minister had pulled up public sector firms like SAIL and RINL for lagging behind not only on international benchmarks, but also their private counterparts and being complacent in ramping up capacities.

He said one area which his ministry has prioritised for roll out of National Steel Policy is raw material security.

“I have directed the ministry officials to take two actions on priority basis. These are setting up of coal washeries and optimising pellet utilisation. These will help reduce dependence on imports by maximising usage of domestic raw materials,” he said.

The minister said Coal India and Bharat Coking Coal have agreed to set up 12 new coking coal washeries by 2019-20.

He added that many players have shown interest in starting operations at a mine in Mozambique owned by ICVL, a JV of five PSUs including SAIL.

ICVL had suspended work in Mozambique mine in December 2015 on viability grounds following a crash in coking coal prices.

Asked about any plans for PSUs acquiring stressed assets of companies in the sector recommended for insolvency, Singh said, “As far as stressed assets are concerned, only a few companies are from the steel sector… One of the PSUs made request (for acquiring) to the Finance Ministry in this regard.”

SOURCE: The HINDU Business Line