Laura Metaal expands Maastricht coil centre

Dutch service centre Laura Metaal, located in the port of Maastricht, is in the process of expanding in size and services offered, Kallanish learns from managing director Friso de Vries.

This month the company has completed the acquisition of the premises of its neighbour Broekman Logistics at the Ankerkade in the Beatrix Haven, also known as Steelport Maastricht. The acquisition of warehousing space and land “… enables Laura Metaal to expand its warehousing capacities substantially for both coil and plate,” de Vries says.

Part of the investment is the expansion of one of the coil storage warehouses, extra automated coil crane capacity and structural adaption of the newly acquired warehouse.

The company is investing some €6 million ($6.9m) in the venture, which grows its operating space from 3.1 hectares to 4.2ha, including an expansion of isolated and covered warehousing from 1.8ha. to 2.5ha. The works are projected to be completed by June 2019.

The company handles some 400,000 tonnes/year of material on commission for edge trimming, pickling, oiling, levelling, and other services, and has the ambition to grow further, de Vries says. In 2017, it added a welding robot with double manipulator at its site. It also runs a processing operation in Eygelshoven.

Stockholder Drösser invests in sheet processing

German steel stockholder Drösser Stahlhandel, headquartered in Cologne, is currently expanding its site in Engelskirchen, located to the east of the aforementioned city.

The Engelskirchen site will get another workshop with 6,000 square metres of additional space, for storage and for expanded processing activities in particular. Drösser is a comprehensive distribution operation with an emphasis on sheet products and processing services such as cutting, flaming, and sandblasting. It recently became the fifth German company to be certified by Swedish steelmaker SSAB as a laser partner.

The company operates in three locations, but with the upcoming expansion it will concentrate on the sites in Cologne and Engelskirchen, managing director René Hülser tells Kallanish. Among other developments, Engelskirchen will benefit from the creation of a high-bay warehouse and the installation of an automatic cut-to-size machine.  The installation work and new machinery will cost a two-digit million-euro amount, and the upgrade is planned to be finished in summer 2019, in time for the company’s 100th anniversary, Hülser notes.

Apart from its full-service locations, Drösser also operates eight so-called ‘ProKilo’ stores for small lots in the Cologne area but also in Berlin, Wiesbaden and Vienna.

European Commission extends steel safeguards investigation

The European Commission has extended the steel safeguard investigation period by up to two months, the EC said Wednesday.

The initial investigation period was to last nine months, starting from March 26 and ending in December.

The EC said that if definitive measures were to be adopted, it would publish the new regulations by February 1, 2019. Preliminary safeguards were published in July this year, in response to US Section 232 steel and aluminum tariffs.

“The size of the investigation, in terms of product scope as well as number of interested parties, is unprecedented,” the EC said. “The investigation, therefore, entails a heavy administrative burden on the Commission in order to deal with a significant number of representations made by the parties, as well as a complex legal and economic analysis of recent data.”

Safeguards announcements have been heavily anticipated by the European steel industry and a delay of the announcement means continued uncertainty, according to sources.

“This means the market is still kept in uncertainty, but for the flat buyers — as quotas are not even close — not filing [the regulation] is not a big problem. The real problem is for the long buyers, in particular for rod and rebars buyers,” a senior industry source told S&P Global Platts.

Through Tuesday, only 5.78% of the EU’s rebar quota was left to be filled and only 2.86% of the wire rod quota remained.

Laura Varriale and Annalisa Villa

WTO largely upholds Turkey’s challenge of US pipe duties

A WTO panel has largely upheld Turkey’s claims against US for imposing duties on imports of certain pipe and tube products from Turkey, S&P Global Platts learned Wednesday.

In the panel report issued on December 18, the WTO said: “With respect to Turkey’s claims under Article 1.1(a)(1) of the SCM Agreement (Subsidies and Countervaling measures) relating to the OCTG, WLP, and HWRP countervailing duty investigations and the CWP sunset review, the United States acted inconsistently with Article 1.1(a)(1), because the USDOC failed to apply the correct legal standard and failed to provide a reasoned and adequate explanation for its public body determinations regarding Erdemir and Isdemir.”

The US also acted inconsistently with Article 12.7 of the SCM Agreement in the OCTG investigation because the USDOC failed to engage in a process of reasoning and evaluation in selecting facts available for missing price information for Borusan’s Halkali and Izmit facilities and in calculating the quantity of the HRS purchases at Halkali and Izmit facilities, WTO said.

Turkey, however, failed to establish that the US acted inconsistently with some of the articles of the SCM Agreement, WTO also noted at the panel report.

Under Article 3.8 of the DSU (Dispute Settlement Understanding), in cases where there is an infringement of the obligations assumed under a covered agreement, the action is considered “prima facie” to constitute a case of nullification or impairment. “We conclude that, to the extent that the measures at issue are inconsistent with the SCM Agreement, they have nullified or impaired benefits accruing to Turkey under that Agreement.”

“Pursuant to Article 19.1 of the DSU, we recommend that the United States bring its measures into conformity with its obligations under the SCM Agreement,” the WTO concluded.

— Cenk Can

German strip processors campaign for fair import measures

Germany’s sheet formers and cold-rollers are asking that the EU refrains from across-the board trade defence measures against imports that fail to take product categories into consideration, Kallanish learns. The German Sheet Metal Forming Industry Association, Industrieverband Blechumformung IBU, and the cold-rollers federation Fachvereinigung Kaltwalzwerke FVK have issued a joint statement on the matter.

Shortly before the end of the European Commission’s 200-day investigation period set in the summer, their respective interest groups have sent a letter to the German ministry of economy and energy. This emphasises that the steel processing industries and their approximately 4.2 million employees would be the losers in the case of the introduction of import quotas.

“The winner would be the steel industry. It already has good sales shown both by the economic indicators of the World Trade Organization and the company results of important flat steel producers,” say the IBU and the FVK in a joint statement.

Both groups emphasise that input materials account for 60% of the costs of their members, which therefore depend on imports, IBU’s managing director Bernhard Jacobs notes. On the other hand, those protected by the safeguard measures, the mills, are doing fine. “We do not see any current ‘shock situation’ for the steel-producing industry triggered by external events,” they say.

Both organisations claim that the measures are largely based on speculation about trade flows. “This cannot be the grounds for [… implementing] such far-reaching measures,” FVK’s managing director Martin Kunkel says.

Steel safeguard to avoid restrictive import drop

The European Commission’s definitive steel safeguard will provide an adjustment mechanism ensuring country-by-country measures for products already subject to anti-dumping duties do not lead to a restrictive drop in imports.

On products such as cold-rolled coil, hot-dip galvanised coil and rebar, where existing duties would prevent some countries fulfilling quotas, there will be an instrument to ensure security of supply. It is not yet clear what form this might take, but countries with restrictive duties already in place could gain access to average global quotas. Alternatively, the quota would somehow have to be redistributed among other countries.

“In the interest of users, there has to be a certain security of supply to the European market, giving importers and users access to the total volume they used to import duty free, even if it is from different destinations,” one source close to the commission said.

The commission yesterday extended its definitive nine-month investigation, which was initially due to lapse on 26 December. This is because of the complexity of the case and the amount of submissions and views it has received, but also as it does not want to fall foul of the World Trade Organisation (WTO) — those exporters receiving a country-by-country quota could complain to the WTO about the measures in certain instances.

For Turkey, which has seen its volumes surge this year because of the whack-a-mole effect of duties on the likes of China, a quota based on its 2015-17 volume may also be deemed unfair.

But domestic mills are acutely aware of the increase in Turkish shipments into the EU, and regularly say they have notified the commission. The quotas will still be based on 2015-17 averages, although the commission is monitoring the volume trends of this year.

The delayed definitive investigation had no impact on the structure of the hot-rolled coil quota. This will remain global and in line with the preliminary safeguard, although there is some debate as to whether it may be quarterly or annual. The commission’s declaration that its investigation will be completed by 1 February should see a seamless transition from the expiration of the provisional measures to the imposition of the definitive safeguard.

Brazilian distributors’ November flats sales 3% higher

Brazilian independent flat steel distributors and service centers shipped 262,100 mt in November, a 3% increase compared with 254,400 mt a year ago, data released by national flat distributors association Inda showed Tuesday.

Purchases from mills reached 270,300 mt in November, down 2.1% from 276,000 mt a year earlier, the data showed.

Imports totaled 89,800 mt, a 0.4% increase when compared with 89,400 mt in the year-ago period.

Inventories held by independents totaled 931,100 mt at the end of the month, up 0.9% from end-October, while average inventory increased to 3.6 months of supply.

Inda expects a retreat of 12% in December shipments and purchases, due to the year-end holiday season.

Based on Inda’s data, total shipments and purchases by Brazilian independent flat steel distributors and service centers in 2018 may increase 6% and 6.7% year-on-year to around 3.14 million mt and 3.16 million mt, respectively each.

Priscilla Antunes

European steel imports continue to rise in October

European Union imports of both long and flat products continued to increase in October, while exports remained well below the levels registered last year, Kallanish learns from data published by European steelmakers’ association Eurofer.

Overall imports of flat products surpassed 2 million tonnes in October, an increase of over 400,000t compared with October 2017. Monthly volumes of flat imports have continued to increase year-on-year since June 2018 compared to those in 2017. This confirms that the implementation of the new US tariffs on steel have had an impact on the global trade of steel into Europe.

Long products’ imports also increased again in October, jumping by almost 200,000t y-o-y to 752,000t.

During the January-October period imports of flat and long products reached almost 25mt, growing by 2.7mt y-o-y. Nearly 2mt of the additional imported products in Europe were long products, but flats also grew compared to the already-high levels registered in 2017.

The jump in imports happened as European producers saw their exports of flat and long products decrease during the first ten months of the year. Overall exports reached 17.2mt during the January-October period, down 1.5mt compared with 2017.

Turkey remains the largest supplier of most steel products to the European market. The country supplied almost 270,000 tonnes/month during the first ten months of the year to Europe, for example, followed by Russia at some 150,000 t/m.

Turkey continued to be the largest importer of European steel products during the first ten months of 2018, with the US in second place. Algeria, historically a major client for Europe, saw its imports fall by around 1mt to just above 650,000t during the first ten months of 2018.

Trump’s Use of National Security to Impose Tariffs Faces Court Test

President Trump has weaponized tariffs to upend the global rules of international trade — but can his policies withstand the peanut butter test?

On Wednesday, a three-judge panel, deliberating in a federal courtroom in Lower Manhattan, considered the most far-reaching legal challenge to the president’s aggressive use of national security to justify placing levies on steel and aluminum imports from Europe as well as from Canada, Mexico, China and other nations.

The case, filed by an alliance of steel importers, revolves around an important constitutional question: whether a provision of United States trade law, known as Section 232 of the Trade Expansion Act of 1962, gives the president too much power over taxes and tariffs — powers that the founding fathers explicitly granted to Congress.

Mr. Trump has used Section 232 to impose tariffs on foreign steel and aluminum after a Commerce Department investigation determined the metals pose a threat to national security by degrading the American industrial base. Mr. Trump has also initiated investigations into whether imports of uranium, as well as autos, pose a national security threat and should somehow be limited.

Judge Claire R. Kelly of the United States Court of International Trade quickly cut to the heart of the matter, asking the Trump administration’s legal team if it could think of a single product or service that the president did not have the authority to tariff in the name of national security.

“Could he, say, put a tariff on peanut butter?” Judge Kelly asked, peering over her glasses.

Tara Hogan, the Department of Justice lawyer handling the case, declined to answer the question in yes-or-no fashion. Instead, she countered with a lengthy explanation of the process, which includes a Commerce Department investigation, required to determine if anything, even peanut butter, was a substance necessary to preserve national security.

“O.K. But I did not hear an answer on the peanut butter,” said Alan B. Morrison, a George Washington University Law School professor who argued on behalf of the plaintiffs.

The constitutional challenge is considered something of a long shot in legal circles because the Supreme Court almost never overturns a congressional decision to delegate power to the executive branch.

“There are very few cases, but the precedents all suggest that Congress can delegate this authority to the president, and he has a wide discretion when it comes to issues of national security,” said Mark Wu, a professor at Harvard Law School who studies international trade issues. “The question here is whether the court is going to use this case to demarcate any limits on what the president can do when it comes to tariffs.”

Still, the issues raised in the case — the widening use of national security concerns to justify trade barriers — were deemed important enough to warrant the appointment of the three-judge panel, the first time the court has assigned more than a single judge to a trade case since 2005.

“It would be the first time since the early New Deal era that courts ruled that Congress went too far in delegating its lawmaking powers,” Todd N. Tucker, a political scientist with the progressive Roosevelt Institute, wrote this year on the Lawfare website. “This is but the latest way that Trump’s aberrant behavior is prompting reactions that undermine longstanding norms.”

The trade law’s provision has been used previously — before Mr. Trump took office, there had been 26 investigations into whether imports pose a risk to American national security. In six of those cases, the president imposed a trade action, such as quotas, according to the Congressional Research Service.

But, according to Ms. Hogan, no president had used Section 232 to impose tariffs before Mr. Trump placed tariffs of 25 percent and 10 percent on steel and aluminum imports this past spring.

In June, the American Institute of International Steel, an association of companies that trade with the affected countries, filed a lawsuit attacking the law itself, after a legal challenge to Mr. Trump’s authority to use it was dismissed this year.

“We are challenging the law because no president before Trump ever used the law like this,” Mr. Morrison said. “The law has an opening, and he has taken advantage of it. There are no limits on what he can do.”

The judges in the case, all appointed by President Barack Obama, seemed to acknowledge the constraints placed on them by Supreme Court precedents, including the landmark 1976 case FEA v. Algonquin SNG Inc., which upheld the broad use of national security as a justification to impose quotas and licensing fees on imports.

But they also questioned specific provisions of the 1962 law granting the executive branch nearly unfettered authority to impose tariffs or fees on trading partners, especially the exemption of presidential decisions from judicial review.

And they quickly moved beyond hypothetical peanut butter scenarios to the national security justifications for the aluminum and steel tariffs.

Judge Gary S. Katzmann grilled Mr. Trump’s lawyers repeatedly about a letter from Defense Secretary Jim Mattis, which supported the administration’s efforts to limit imports but said the action should be aimed more squarely at China, rather than at allies like Canada. Mr. Mattis, in the memo, said imports of steel and aluminum accounted for a negligible percentage of materials used in the production of military hardware.

“I’m scratching my head about your rationale,” he said.

It is not clear when the court will decide in the case. Both sides have suggested they will appeal directly to the Supreme Court if they lose.

New York Times
By: Glenn Thrush 
12/19/18