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U.S. court upholds Trump’s national security tariffs on steel imports

The U.S. Court of International Trade upheld former President Donald Trump’s “Section 232” U.S. national security tariffs on steel imports on Thursday, denying a steel importer’s challenge to the duties.

A three judge panel at the New York-based federal court, which hears challenges to trade actions under U.S. laws, found that the Commerce Department and Trump properly applied a Cold War-era trade law in imposing the tariffs.

Trump imposed 25% tariffs on imported steel and 10% on imported aluminum from most countries in 2018, arguing that these protections were necessary for U.S. national security to maintain healthy domestic production.

He invoked Section 232 of the Trade Act of 1962, which allows the president to restrict imports of goods critical to national security.

Universal Steel Products Inc, a New Jersey steel importer, had argued before the court that the legal process used to imposed the tariffs was “procedurally deficient” and did not specify an expiration date, there was no “impending threat” to U.S. national security and Trump exceeded his discretionary authority in applying the tariffs to steel and aluminum, which are commodity products.

The panel of judges disagreed, writing here that Section 232 “grants the president latitude in evaluating whether imports threaten the national security. The statutory language makes clear that the list of factors to be considered in determining whether a threat exists is nonexclusive.”

The American Iron and Steel Institute, which represents steelmakers, industry groups welcomed the decision. It urged current U.S. President Joe Biden to maintain them to protect the industry from a flood of excess global production, largely centered in China, that has only grown since the tariffs were first imposed.

“President Biden has acknowledged importance of addressing global overcapacity and I think he understands that these tariffs are important for national security,” said Kevin Dempsey, AISI president.

Biden signaled that he is likely to keep the tariffs in place on Monday, when he reversed a tariff exemption on aluminum imports from the United Arab Emirates that had been granted by Trump on his last day in office.

Maintaining tariffs on UAE aluminum is “necessary and appropriate in light of our national security interests” Biden said in a proclamation.

Story originally pubished February 4th 2021
Image courtesy of Ant Rozetsky
Reporting by David Lawder, additional reporting by Andrea Shalal; Editing by Marguerita Choy; Editing by Chris Reese

Nucor, Liberty Steel increase US wire rod prices by $110/st

Nucor intends to hike wire rod transaction prices in the US effective with new orders Jan. 13, the company said in a letter to customers.

The steelmaker announced an increase of $110/st on all wire rod transaction prices, with price-protection for existing orders shipped by Jan. 31. All wire rod diameters below 0.25 inch would continue to be subject to a $10/st size extra, according to the letter.

Evraz NA had also raised its wire rod pricing by $90/st, according to a buy-side source. At the time of writing, Platts had not received a price increase announcement letter from Evraz.

Later in the day, Liberty Steel followed with an increase of $110/st on all wire rod transaction prices, effective with shipments Feb. 1.

A main reason for the announcements was a large increase in shredded scrap pricing, which rose by about $90/lt during the January scrap buy. The move marks the third round of price increases in as many months. Wire rod producers had previously raised their prices by $95-$105/st in early December after significant increases in shredded scrap pricing.

Initial reactions to the latest price increase announcements were mixed.

“I’m not sure it’s justified considering the sharp rise in scrap prices,” said a distributor. “They are just piling on at this point.”

Amid tight availability and extended lead times, a price increase larger than the scrap price increase was to be expected, according to a buyer. “Those conditions warrant margin expansion,” he added.

S&P Global Platts’ latest weekly wire rod assessment was $745-$765/st on Jan. 8, representing a 20-month high.

News story brought to you by S&P Global Platts



Double E Pipeline gets US FERC nod to begin work on most of 135-mile route

US regulators have given the go-ahead for work to begin on almost all of the route of the 135-mile Double E Pipeline that would link growing natural gas production areas in the Permian’s Delaware Basin to delivery points near the Waha Hub in Texas.

The 1.35 Bcf/d pipeline will interconnect with Kinder Morgan’s Gulf Coast Express and Permian Highway Pipelines and Energy Transfer’s Trans-Pecos Pipeline, allowing for increased delivery to downstream demand markets of Permian supplies that are forecast by S&P Global Platts Analytics to reach 15.5 Bcf/d in 2023.

Permian spot gas prices have been buoyant recently, lifted higher by a spate of below-average temperature days across Texas and the US Southeast. Cash Waha Hub reached a six-week high of $2.70/MMBtu on Jan. 13.

Part of the upward movement in the cash market has likely been due to the Jan. 1 entrance into commercial service of Permian Highway Pipeline, which flows gas from Waha east to the Katy-Houston area.

While PHP connects with a number of regional pipelines networks, including Enbridge’s Texas Eastern Transmission and MidAmerican Energy’s Northern Natural Gas, it provides the largest capacity addition to Kinder Morgan’s El Paso Natural Gas pipeline system.

In a Jan. 12 letter to Double E Pipeline, which is owned by affiliates of Summit Midstream Partners and ExxonMobil, the Federal Energy Regulatory Commission said general construction could begin in all areas except for about two miles of the planned route. Work on the remaining route will need to be requested and approved separately, the letter said.

The pipeline received certificate approval from FERC on Oct. 15 by a 2-1 vote. Pushing back the targeted in-service while it was awaiting FERC approval, Double E last fall set a new target of placing the project into service in the fourth quarter of 2021.

Environmental groups filed a late motion to intervene in the FERC review last April, but the commission rejected the request.

News story brought to you by S&P Global Platts
Image courtesy of Quinten de Graaf

S Korea 2020 ferrous scrap import volumes lowest in more than 25 years

Refinery closures in Asia-Pacific are likely to offset a wave of new supply streams into the region.

The pandemic accelerated a wave of refinery closures, with several regional refiners forced to close or review operations due to poor refining margins.

BP’s plans to shut Australia’s largest refinery in Kwinana and Pilipinas Shell Petroleum Corp’s plans to shutter its Tabangao-based refinery in the Philippines, with several other potential closures on the horizon.

According to market sources, this will help offset a wave of new supply streams, especially of gasoil, entering the market, sources said.

One example is China’s private greenfield 20 million mt/year Zhejiang Petroleum & Chemical, designed to produce 1.7 million mt/year of gasoil. In addition, gasoil output from two refinery start-ups in the Persian Gulf — Saudi Arabia’s Jazan and Kuwait’s Al-Zour — are set to spill fresh barrels into the spot market.

Meanwhile, some refineries in the region have raised their runs though others continue to operate at lower rates due to weak margins.

** India’s No.1 state-owned refiner Indian Oil Corp. has been running its plants at full capacity since early November.

** India’s Mangalore Refinery and Petrochemicals Ltd. is running at 90%.

** India’s state-owned refiner Bharat Petroleum Corp. Ltd. has returned operation levels at its Kochi and Mumbai refineries to near full capacity.

** India’s Chennai Petroleum Corp. Ltd-owned Manali refinery is operating at a run rate of 95%.

** Shell will halve the crude processing capacity at its Pulau Bukom refinery in Singapore as part of the energy major’s initiative to reduce its CO2 emissions to net zero by 2050. “Bukom will pivot from a crude oil, fuels-based product slate towards new, low-carbon value chains,” the company said. “We will reduce our crude processing capacity by about half and aim to deliver a significant reduction in CO2 emissions.”

** South Korea’s top refiner SK Energy has shut two CDUs at Ulsan but plans to restart the 60,000 b/d No. 1 crude distillation unit and 170,000 b/d No. 3 CDU at Ulsan in January.

** Indonesia’s state-owned Pertamina was reported to be keeping the run rate at its Balikpapan refinery in East Kalimantan steady at around 80% with industry sources noting that the refinery has no plans to raise its run rate back to 100%, as refining margins across the barrel remain poor.

** Pilipinas Shell Petroleum Corp plans to shut down its Tabangao refinery and transform the facility into an import terminal, the company said in a statement. The refinery has been shut since May 24, having been idled due to weak demand for domestic products.

** Philippines’ Petron plans to halt temporarily its Bataan refinery in the middle of January. The refinery would resume processing depending on the improvement of the Philippines economy. The company has previously said that the Bataan plant may close should discussions regarding customs tax with the government fall through.

** New Zealand’s Refining NZ is moving ahead with its plans to convert its refinery into an import terminal, putting into motion the next phase of long-term strategic plans that will turn New Zealand into a full importer of refined oil products. Marsden Point has been operating at a “cash neutral” position, since simplifying its operations after restart in October.

** Australia’s second-largest refiner, Viva Energy, has decided to avoid closure of its Geelong refinery, as the company takes up a payment lifeline extended by the Australian federal government. The grant, also known as the “interim Refinery Production Payment,” will last for six months from January-July 2021. Refineries that take part in the grant will have to agree to maintain operations at least during the tenure of the program, committing to “an open book process and long-term self-help measures to further inform the development of the long-term Refinery Production Payment.” Should refining margins stay on an upward trajectory, “the company expects to be able to maintain refining operations once the interim Refinery Production Payment concludes at the end of June 2021,” it said in a separate statement.

** Ampol, formally Caltex Australia, has announced the start of a “comprehensive review” of its Lytton refinery in Brisbane as a prolonged period of poor refining margins and an uncertain outlook threaten the closure of the facility. “The review will consider all options for the facility’s operations and for the connected supply chains and markets it serves,” Ampol said.”These options include closure and permanent transition to an import model, the continuation of existing refining operations and other alternate models of operation, including the necessary investments required to execute each of the options,” the company added.

** The Maritime Union of Australia has urged the federal government to nationalize BP’s Kwinana oil refinery, rather than allow it to be closed. BP Australia on Oct. 30 said it was planning to shut its Kwinana refinery and convert it into a fuel import terminal, in a strategy aimed to better meet the needs of a changing oil market.

** Vietnam’s Nghi Son refinery will keep its operating run rate above 100% of capacity in the near term, even as a buildup of inventories put domestic buyers under pressure, industry sources with close knowledge of the matter said.

** Taiwan’s Formosa Petrochemical plans to operate its Mailiao refinery at reduced rates of around 60% of capacity in January and February as demand for refined products remains tepid and several secondary units are shut over this period, a company spokesman said. Formosa plans to operate its refinery at 320,000 b/d in January and 330,000 b/d in February, putting operations at 59% and 61% of nameplate capacity, respectively. Formosa had idled one of its crude distillation units of 180,000 b/d in November due to weak margins and low secondary unit operations. The idled CDU is expected to restart in the second half of the year, when the company’s No. 2 RDS unit restarts following the completion of repairs, the source said, adding that margins are also expected to improve by then. The company’s No. 2 RDS was shut July 15 after a fire. The unit’s restart was originally planned for April at the earliest. The company has three CDUs at the Mailiao refinery, each with a capacity of 180,000 b/d.

** SK Energy plans to keep its run rate at crude distillation units in the Ulsan refinery at 60% in January, down from 65%-70% in December, a company source said. A second company source said the run rate cut is due to thin margins for oil products, even though light and middle distillates markets saw a rise in cracking margins in recent months.

India’s fuel demand fell 11% year on year to 193.4 million mt, or 4.1 million b/d, in 2020 due to the coronavirus impact, according to the latest provisional data from the Petroleum Planning and Analysis Cell. The decline in demand for oil products in 2020 was the first annual contraction since 1999, analysts said. Diesel demand fell 14.5% on the year to 71.91 million mt while demand for gasoline dropped 9.3% on the year to 27.27 million mt in the period. LPG demand rose 4.3% to 27.41 million mt in 2020 due to demand from the domestic cooking segment. Jet fuel demand fell 47.8% year on year at 4.27 million mt as air travel was badly hit due to the lockdowns.

Meanwhile, domestic consumption of gasoline in India rose for the fifth straight month in December, with public confidence in resuming daily activities gradually increasing in the near term amid a steady fall in COVID-19 cases across the country, industry sources told S&P Global Platts. Continuing the recovery in demand, the latest consumption data from India’s Petroleum Planning and Analysis Cell showed that December recorded the highest consumption of fuel oil last year at 559,000 mt, an 8.54% increase on the month, although this was still 11% down on the year.

In other news, Indonesia’s Pertamina is expected to raise its Cilacap refinery’s production of higher quality gasoline moving forward, with the proportion of gasoline of octane rating above 90 RON set to increase, industry sources with knowledge of the matter told S&P Global Platts. The move is to increase production of 90 RON gasoline, the next step in the refinery’s plans following the completion of the Cilacap Blue Sky Project in 2019, which had allowed the refinery to produce Euro 4 gasoline.

Click here for more on this and other Metals news from S&P Global

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ArcelorMittal continues price rally

ArcelorMittal has raised hot-rolled coil prices by Eur50/mt to Eur650/mt EXW Ruhr on the spot market with immediate effect, sources told S&P Global Platts December 4th.

The move is the latest in a number of price hikes since late summer, increasing steel coil prices by almost Eur200/mt in a period of less than six months.

Prices for the Italian market have been raised to the same level on a delivered basis, Platts understands, and are set for April delivery. The Dec. 3 index for HRC EXW Ruhr stood at Eur570.50/mt. Sources said Dec. 4 that spot market levels were around Eur600/mt EXW Ruhr as lower priced possibilities have dried up.

Prices for hot-dip galvanized sheet have been raised to Eur750/mt EXW Ruhr for DX51D grade.

The European coils market is experiencing temporary supply issues ranging from a lack of slabs at European mills to coil shortages from mills to customers while stockholders struggle to secure any material to build up stock.

Demand has outpaced supply as European mills struggled to ramp up fast enough following shutdowns earlier this year. Although there will be more capacity coming online in Q1 next year as mills are further ramping up, market participants expect the supply shortage to last at least into Q2 next year.

The shortage is currently supported by a lack of import material but an Italian re-roller was heard to have booked HRC at USD720/mt FOB Egypt to secure volumes.

Most mills are currently out of the spot market, having filled Q1 order books and are now starting to offer into Q2.

“What I can see is that price is reflecting material – there is no material around,” said a trader.Another trader said that mills are on and off the market, changing prices daily while securing any bigger sixed volume is a struggle.

“Daily announcements like that are fueling the sentiment and overheating, it’s not healthy,” said a German stockholder, adding that he would be shying away from buying beyond April as the question remains how long the price rally is going to last.

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USSC (NYSE: X) announce closing of $63.4 million of Environmental Improvement Revenue Bonds

United States Steel Corporation (NYSE: X) today announced the closing of $63.4 million of Environmental Improvement Revenue Bonds with a green bond designation. The company will use proceeds from the green bonds to partially fund work related to its new environmentally preferred, low-emission electric arc furnace at U. S. Steel’s Fairfield Works.

“Our first green bond is an important step forward for U. S. Steel in our drive toward more sustainable practices,” said U. S. Steel President and Chief Executive Officer David B. Burritt. “This is doubly relevant for our new electric arc furnace, which recycles scrap steel as its primary feedstock and uses electricity for power. By partially funding the electric arc furnace, the green bond is helping advance our commitment to reduce greenhouse gas emissions intensity by 20 percent by 2030.”

The green bonds issued through The Industrial Development Board of the City of Hoover, Alabama, have a coupon of 6.375% and carry a final maturity of 2050. In its agreement with the Alabama bond issuers, U. S. Steel will pay the semiannual interest and repay the principal upon maturity.

Founded in 1901, the United States Steel Corporation is a Fortune 250 company and leading integrated steel producer. With extensive iron ore production and an annual raw steelmaking capability of 22 million net tons, U. S. Steel produces high value-added steel products for the automotive, infrastructure, appliance, container, and energy industries. The company’s “best of both” integrated and mini-mill technology strategy is advancing a more secure, sustainable future for U. S. Steel and its stakeholders. With renewed emphasis on innovation and customer focus, the company produces cutting-edge products such as U. S. Steel’s proprietary XG3™ advanced high-strength steel. U. S. Steel is headquartered in Pittsburgh, Pennsylvania, with world-class operations across the United States and in Central Europe. For more information, please visit

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US sheet prices surge up ahead of the holiday

US sheet prices appear to be moving up organically ahead of the Thanksgiving holiday, with some market sources predicting a break above $800/short ton by the end of the year. 

A source at one top-tier mill puts transaction prices for hot-rolled late last week at around $750/st and quotes for new orders beginning at $780/st. 

A Midwest buyer likewise predicts hot-rolled “…will be much more pricey by Thanksgiving” – around $800/st. 

“I’d say coil prices are clearly moving on supply/demand dynamics and haven’t needed [mill] announcements to signal change,” he says. “There could be some mill announcements, but they are not required for higher prices.”

A second Midwest buyer says transaction prices are not keeping pace with rising index prices, but buying should remain consistent throughout what is usually a seasonally slow period.

“I expect the spot market will remain consistent with the past two weeks’ activity,” he says. “Many spot buys are going to service centres that have heavier inventory than they are comfortable having and no lead times. We sold many tons that we purchases from a mega-sized service centre – most was sold to other distributors.”

Kallanish raised its hot-rolled price Monday to $750-780/st, with cold-rolled moving up to $940-980/st.  

Article courtesy of Kallanish Steel

Image courtesy of Pepi Stojanovski

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