HIGHLIGHTS: Coking coal price rally, iron ore output data, Samarco charges...
Latin America editor Ana Paula Camargo reviews the main steel market news covered by Metal Bulletin over the past week.
Commodity prices continued to rise, with market participants conceding that they had no idea when the coking coal price rally would end.
On Friday October 21, Metal Bulletin’s fob Australia premium hard coking coal index stood at $241.51 per tonne, up from $227.18 per tonne fob a week earlier, while the fob Australia hard coking coal index increased to $209.79 per tonne from $196.23 per tonne over the same period.
The coking coal price surge was one of the reasons behind the rise in import slab prices in Asia.
The Brazilian flat steel association, Inda, also pointed out that local steel producers are under pressure from higher coal prices, which could lead to a 5% price rise in flat steel goods in November.
The iron ore benchmark index ended the week inching up closer towards $59 per tonne cfr China, with Metal Bulletin’s 62% Fe Iron Ore index reaching $58.72 per tonne cfr Qingdao – up by 29.77% month-on-month and 9.23% year-on-year.
And Metal Bulletin published a special report discussing the widening of the price gap between high-grade iron ore and lower-grade materials thanks to a supply shortage of coking coal and coke.
In the USA, no case was decided, but there has been a lot of talk about trade defence measures this week.
The American Institute for International Steel (AIIS) fears that innocent firms could be hit by “devastating” interim anti-dumping measures.
At the same time, US Commerce Department has been defending the wide scope of a trade case targeting imports of cut-to-length plate from a dozen countries, swatting aside concerns from plate consumers that the scope is too broad.
The department also decided to postpone its final determinations in an anti-dumping probe on imports of stainless steel sheet and strip from China to February 1 from November 23.
And Duferco has called on the same department to wait until at least December 1 before deciding whether to proceed anti-circumvention cases targeting flat steel from Vietnam.
Turkish steelmakers visited the USA this week, with the aim of improving trade relations between the two countries.
In Turkey itself, local flat steel producers are planning to apply for a new investigation into hot rolled coil (HRC) imports, with focus on China, Russia and Ukraine.
But on the other hand, the Turkish Steel Exporters Union said that the Turkish steel industry is unfortunately facing several unfair trade cases.
Several European mills signed an open letter calling on EU political leaders to “make the right choices to ensure that our sector and its value chain flourish”, including the development of stronger trade defence measures against cheap steel imports.
As effective in terms of trade cases, the Eurasian Economic Union launched a repeat anti-dumping probe into imports of certain steel tube & pipe from Ukraine, and Mexico extended a countervailing duty on imports of seamless steel tube from Japan.
In addition, Canada found preliminary injury in a rebar case against six countries.
Around the world
The world’s largest miners - BHP Billiton, Rio Tinto and Vale - have all disclosed output figures for the third quarter of 2016.
BHP Billiton’s iron ore production was stable year-on-year in the three months ending September 30, 2016, at 58 million tonnes.
Iron ore output at Rio Tinto increased by 2% over the same period, to 88.10 million tonnes, while Vale’s iron ore production was up by 1.50% on a record output at Carajás, to 92.09 million tonnes.
Rio Tinto has also revised downwards its iron ore shipment guidance for 2016 due to port and rail maintenance during the September quarter. It now expects to deliver 325-330 million tonnes of iron ore from its Pilbara operations, down from its previous target of 330 million tonnes.
Brazil’s federal prosecutor charged 26 individuals and four companies over Samarco’s tailing dam collapse last year – including Vale and BHP Billiton.
Pellet producer Samarco - a 50:50 joint venture between the two miners- controls the Fundão dam at its Germano mine in Brazil’s Minas Gerais state. The dam collapsed in November 2015, leading to 19 fatalities and flooding nearby settlements and the Rio Doce basin.
Vale repudiated the charges and said it will take appropriate measure to prove the innocence of the company and its executive, while BHP Billiton rejected the charges and will fully support each of the affected individual in their defence.
Meanwhile, China’s vice-premier Ma Kai said at an EU-China trade summit in Belgium that the country will cut steel capacity by 50 million tpy in 2016, as part of its plan to reduce steel overcapacity by 100-150 million tonnes in 2016-2020 period.
In the USA, steelmakers Nucor, Steel Dynamic Inc (SDI) and SSAB have agreed to settle a long-running, class-action anti-trust case for a combined $30 million, according to Metal Bulletin sister publication AMM.
The case, launched in 2008 and concerning alleged price-fixing that occurred more than a decade ago, has cost domestic mills nearly $200 million.
And finally, Ali Pandir, chairman at Turkish integrated steelmaker Erdemir, told Metal Bulletin in an interview that the company plans to increase coated steel output to meet growing demand from the local automotive sector.