Day: 28 June 2022

The US will raise tariffs to 35% on certain steel and aluminum products imported from Russia in a move that will affect 570 different groups of products across various sectors, according to a White House proclamation June 27.

“I have determined that increasing the column 2 rates of duty to 35% ad valorem on certain other products of the Russian Federation, the importation of which has not already been prohibited, is warranted and consistent with the foreign policy interests of the United States,” President Joe Biden said in the proclamation.

The White House did not release information on which specific products would be subject to the higher tariffs. In a separate statement, however, US Trade Representative Katherine Tai said the list of products the announcement covered would include “steel and aluminum; minerals, ores, and metals; chemicals; arms and ammunition; wood and paper products; aircraft & parts; and automotive parts.”

The raising of “column 2” rates is tied to the US’ previous action of suspending normal trade relations with Russia in April to escalate pressure on Russian President Vladimir Putin for the country’s invasion of Ukraine.

The US Harmonized Tariff Schedule, which the US International Trade Commission compiled, outlines separate duty rates for favored trade partners (column 1 duties) and non-favored trade partners (column 2 duties).

The April removal of normal trade relations allowed the US to apply column 2 duty rates on imports from Russia until January 2024.

For metals, column 2 duty rates reach up to 20% for finished steel, 18.5% for most unwrought aluminum, 11% for high purity aluminum, and 10.5% for some categories of value-add aluminum products. Duties on these products and others could now potentially reach 35% pending the release of the official list of product categories impacted by today’s proclamation.

Representatives from the US Commerce Department and ITC were not immediately available for comment when S&P Global Commodity Insights contacted them June 27.

The higher duties also apply to imports from Belarus in retaliation for its aid to Russia. The US may restore normal trade status with either country pending permission from Congress.

— Nick Lazzaro

Turkey has set new customs duties on some flat and long steel products from Organization of the Islamic Conference, or OIC, member countries under the preferential trade arrangement framework agreement, with a presidential decree published June 25.

According to the decree seen by S&P Global Commodity Insights, the duties will be imposed from July 1 on some steel products imported from Bahrain, Bangladesh, the United Arab Emirates, Morocco, Iran, Qatar, Kuwait, Malaysia, Pakistan, Saudi Arabia, Oman and Jordan.

Hot-rolled coils under HS code 7208 will be subject to customs duties of 9% and 13%, depending on thickness and carbon content, while cold-rolled coils under HS code 7209 will be subject to a duty of 10%.

The duty for uncoated flat steel products with widths below 600mm under HS codes 7211 will be 15% and the duty for steel sections under HS codes 7216 will be 16.5%.

According to the decree, duty on CRC imports by the Turkish white goods sector will temporarily be 7%.

Industry sources also expect upward adjustments in customs duties on flat steel products from the EU and some Asian countries, as low priced imports, especially from some Asian producers, have been putting pressure on Turkish mills’ flat steel pricing.

The Turkish Trade Ministry is expected to announce the final decision on its antidumping investigation into HRC imports from the EU and South Korea in late-June or early-July, industry sources said.

Turkish mills HRC prices exceeded $1,200/mt in mid-March amid some availability issues due to the war in Ukraine, but have declined since April on low demand and was assessed by Platts at $750/mt FOB on June 24.

— Cenk Can

The European hot-rolled coil market fell June 27 due to weak demand.

Platts assessed hot-rolled coil in Northern Europe down Eur10/mt from the previous session at Eur845/mt ex-works Ruhr June 27, S&P Global Commodity Insights data showed.

Producer sources considered the tradable value at Eur850/mt ex-works Ruhr and Eur830-Eur850/mt ex-works Ruhr, respectively, as prices continued to fall.

“There is still downward pressure on domestic prices from poor demand,” said a mill source. “There is no light at the end of this tunnel — prices will drop further.”

End-consumer demand was “non-existent,” according to multiple sources.

HRC was assessed stable in the Southern market at Eur780/mt ex-works Italy.

Service center sources said prices of Eur780/mt ex-works Italy were achievable, with another service center source citing a buyer bid level at Eur780/mt against offers at Eur820-Eur830/mt ex-works Italy.

Offers in the import market were reported at Eur740-Eur760/mt CIF Italian ports ex-Asia.

Sources cited a potential downward price driver from the Turkish market on the day, with a mill ready to offer HRC competitively at $650/mt FOB Italy ex-Turkey — the equivalent of Eur690-Eur695/mt CFR, duty included.

— Benjamin Steven, Maria Tanatar

As the market awaits the UK’s formal approval of steel import safeguards by the end of June, UK Prime Minster Boris Johnson indicated in his speech at the G7 Summit in Germany that steel tariffs will likely be extended to protect the British steel industry.

Johnson told the summit June 26 that the UK steel industry was “going through a difficult time, partly because of energy prices,” and until British steel could be provided with cheaper energy and electricity for its blast furnaces, it was “reasonable for UK steel to have the same protections that absolutely every other European steel economy does.”

The UK Secretary of State for International Trade Anne-Marie Trevelyan recommended June 23 that the UK extends tariffs and quotas on 15 categories of steel products to sustain domestic steel production for a further two years.

The proposal is expected to be given formal approval in parliamentary business June 30.

The UK safeguards system, which is due to expire on June 30, has been under review since late 2021. It mirrors the EU safeguards system, put in place in mid-2018 in response to the US’s imposition of Section 232 import tariffs of 25% on steel imports in March 2018.

UK industry is partly dependent on imported steel, as it produces only around 70% of its annual requirement of around 10.2 million mt crude steel, according to trade body UK Steel.

A tightness in some products, and soaring energy costs, led to abrupt price increases in many steel products since Russia’s Feb. 24 invasion of Ukraine.

Platts assessed the weekly UK hot-rolled coil price at GBP1,220/mt ($1,495/mt) DDP West Midlands June 24, up from GBP830/mt at the start of 2022, according to S&P Global Commodity Insights data.

Trevelyan proposes that, based on the basis of a Report of Findings from the Trade Remedies Authority, or TRA, the measure should be extended for a further two years to June 30, 2024 for category 6 (tin mill products), category 7 (non-alloy and other alloy quarto plates), category 12 (merchant bars and light sections), category 16 (non-alloy and other alloy wire rod) and category 17 (angles, shapes and sections of iron or non-alloy steel).

The conclusion was reached as there was clear evidence that if it was discontinued, “there would be serious injury or the threat of serious injury to UK producers,” the government said.

The trade secretary also concluded that the retention of the measure was in the economic interest of the UK.

The TRA identified severe supply problems for category 12, potentially involving associated increased costs to businesses using those products, which resulted in Trevelyan proposing a tariff-free quota increase for the category 12a by 126,136 mt to better reflect trade flows.

The steel safeguard measure will also continue to apply to 10 other steel categories for another two years on the basis of grounds raised by interested parties.

Trevelyan’s decision was previously welcomed by UK steel producers.

However, there are concerns that the safeguards could potentially go against World Trade Organization principles, with Lord Christopher Geidt citing the steel import tightening as one of the reasons for his recent resignation as Johnson’s ethics adviser.

At the G7 Summit, Johnson said there were “tough choices” to make on what action to take and the difficulty came in over whether it was possible to help the UK steel industry, while also staying within WTO obligations.

— Jacqueline Holman, Annalisa Villa

To reduce dependence on imports and make India self-reliant, the country’s coal ministry aims for coking coal production to reach 140 million tonnes through the fiscal year ending 31 March 2030 (FY30), Kallanish notes.

India produced 51.7mt of raw coking coal in FY22, up by 15% on-year against 44.8mt produced in FY21. To further enhance raw coking coal production, the ministry has in the last two years auctioned ten coking coal blocks to the private sector, with a peak-rated capacity of 22.5mt. Most of these blocks are expected to start production by FY25.

Additionally, the ministry has identified four other coking coal blocks. The Central Mine Planning and Design Institute (CMPDI) will meanwhile finalise geological reserves (GR) for four to six new coking coal blocks in the next two months. These blocks may be offered in subsequent rounds of auctions for the private sector to further step up domestic raw coking coal supply in the country, the ministry says.

Currently, India’s domestic raw coking coal washing capacity is 23m t/y. Coalfield India (CIL) is planning to set up and operationalise nine more new washeries with 30m t/y combined washing capacity. CIL would thus be able to supply about 15mt of washed coking coal to the steel sector, thereby reducing coking coal imports.

“There is a need to set up more washeries to enhance capacity to meet the fast-increasing demand for coking coal in the country,” says the coal ministry. “During FY22, CIL supplied 1.7mt of washed coking coal to the steel sector and has set a target of 3.45mt during FY23.”

Sayed Aameer India