Final Thoughts

SMU published an article in Tuesday evening’s issue about the comments made by General John Adams on national security and the need for steel. The title of the article was “General Goes Nuclear in Support of Section 232.” We received a number of comments from that article wanting to know if we had fact-checked what the general had to say and another disputing some of the assertions he made. The general is a staunch supporter of the Section 232 investigation and he was lobbying to get the president to make a decision (preferably in favor). With the election of Donald Trump and the selection of his cabinet and other officials, such as Trade Representative Lighthizer, there have been a lot of moving parts concerning trade. Just today, Whirlpool asked the International Trade Commission to include 50 percent duties in addition to quotas on ALL foreign-produced washers in its final safeguard recommendation, after the ITC voted unanimously in a Section 201 case that imports of large residential washers hurt the domestic industry. I could rename our newsletter “Trade Today” with all of the news coming from NAFTA negotiations, South Korea negotiations, antidumping and countervailing duty reviews, circumvention cases and Section 337. We feel that much of this is important to our readers, but we do not want to place ourselves in the position of specifically taking sides. Our goal has been to try to provide as much information as possible, link to other sources of good information, and then let you, the reader, make your own decisions. (One source I highly recommend for up-to-the-minute details is World Trade Online.)

I was listening to the Steel Dynamics earnings conference call this morning. Actually, I had the conference call going in the background as I tried to do three or four other things at the same time. I think it’s called multi-tasking. The thing about multi-tasking is there are times you don’t get to really concentrate on just one thing and follow it through to completion. Anyway, I could hear Mark Millett in the background answering questions about SDI’s latest quarter. Then I heard a familiar voice, Chuck Bradford, and he asked a question of Mr. Millett about the export of Chinese ferrous scrap and if SDI had any feeling for the quality of the material. There are many people in the industry who believe that Chinese scrap and exports of Chinese scrap could well be a major influence on future scrap prices around the world. Mr. Millett told Chuck that he didn’t have an answer to his question since SDI has never bought any Chinese scrap.

Anyway, the question sparked a wave of curiosity in me and I reached out to a trading friend of mine in China whose company has been exporting Chinese ferrous scrap. I asked him if he knew how much scrap has been exported and to where it was going. Even with the 12+ hour time difference, I got a response about an hour later. He told me that from January through August a total of 879,700 metric tons of scrap has been exported out of China. For the month of August, Chinese exports came from two provinces, Guangdong and Fujian. The picture to the left from my source shows bundles of Chinese scrap just before being exported.

By country, the Chinese scrap that was exported in August went to: Thailand = 109,800/MT, Indonesia = 102,400/MT, Taiwan = 67,600/MT, Vietnam = 67,900/MT and India = 23,400/MT.

None of the scrap has been sold to the United States (to date). If and when it does, I hope to be one of the first to find out…

Going back to trade and trade issues for a moment. I spoke with trade attorney Lewis Leibowitz this afternoon about the status of the reviews of the CORE, cold rolled and hot rolled trade cases. He essentially told me, “there is no news” to report. The reason being that the petitioners have 90 days from the date the administrative reviews are requested to withdraw the reviews. He told me that actually happens quite often for a variety of reasons. Everything seems to be getting held up and the consensus of opinion is it is due to the Section 232 investigation. Everyone in the steel industry is holding their breath waiting for 232 to become a reality. Once that happens, then we can all learn to work within whatever the new rules will be. Until then – well, stay tuned.

As always, your business is truly appreciated by all of us here at Steel Market Update.

John Packard, Publisher