US to exempt some steel, Al from 232 quotas
The US will provide targeted relief from import quotas imposed on steel and aluminum from Argentina, Brazil and South Korea, but the move is expected to have "limited" impact on domestic steel trade flows and prices.
US President Donald Trump today authorized Commerce secretary Wilbur Ross to grant requests from US consumers for product exemptions from annual import quotas based on insufficient quantity or quality available from domestic producers. Exempted products would not be subject to the 25pc tariff on steel and 10pc tariff on aluminum.
The directive addresses a complaint among some US consumers that product exclusions were only available from the tariffs and now gives Commerce the same product exclusion authority for quotas.
The move is expected to further bottleneck a messy exclusion process marred by delays. Commerce has reviewed a only small fraction of more than 27,000 tariff-exemption requests submitted by US consumers.
Trump in his directive said that "projects in the US employing thousands of workers may be significantly disrupted or delayed," with some absolute quotas already filled for the year.
Commerce will expedite requests for import orders contracted prior to 8 March for use in facility construction in the US, provided that the value of the material constitutes 10pc or less of the cost of the facility and that the lack of relief would cause delays. But any such imports would be subject to the 25pc tariff if approved.
Investment bank Jefferies in a research note said it expects the impact on US steel imports and prices to be "limited," but singled out oil country tubular goods (OCTG) as a key beneficiary of today's announcement.
"We continue to see OCTG as the big winner of [Section] 232 as agreements with South Korea, Brazil and Argentina address 45pc of historical imports and ostensibly cap imports at 52pc below 2017 volumes," Jefferies said, even as OCTG prices were heard to be under pressure.
The company estimates that 93pc of the annual OCTG quota has been filled, driving expectations for a meaningful drop in second-half imports.
Still, Jefferies expects a majority of OCTG-related quota requests to be refused. OCTG utilization rates are the lowest of any major steel product and it will be challenging for consumers to prove that domestic material is not available, it said.
The move is also expected to benefit slab importers.
"While [quota-based exemptions] could ultimately amount to very modest changes to existing trade flows, it could also further the opportunity for Brazilian and Korean slab producers to enhance slab exports to the US," Cleveland-based investment bank KeyBanc said.
The president directed the Commerce secretary to issue the procedures for exclusion requests as soon as possible. Relief granted will be retroactive to the date the exclusion request was received by Commerce.
The US granted exemptions from the 25pc global tariff on steel imports, effective 23 March, to Argentina, Brazil and South Korea after the countries agreed to annual import quotas based on shipments in the prior three years. South Korea's exemption was also tied to a renegotiated trade deal that gives US automakers greater access to the South Korean market. Australia was exempted from the steel tariff but is not subject to an import quota.
Australia and Argentina are the only countries exempt from the 10pc tariff on aluminum imports, with Argentina subject to an annual import quota.
The four exempt countries accounted for 23pc of US carbon and stainless steel imports of 16mn t in the first half of 2018, down from 25pc of US imports of 18mn t in the same period a year earlier, according to Commerce.
Related news posts
US court asked for third Citgo auction extension
US court asked for third Citgo auction extension
Houston, 19 September (Argus) — The court-appointed special master overseeing the auction of US refiner Citgo has asked the court to delay the announcement of a successful bidder to 26 September and a sale hearing to December. Special master Robert Pincus planned to make an announcement of the proposed buyer on or about 16 September followed by a November sale hearing, but last minute legal challenges derailed what have otherwise been "robust negotiations with a bidder," according to a court filing today. "The special master is continuing to negotiate sale documentation with a bidder," today's motion said. Pincus previously requested a second extension in August and a first extension in late July . By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Industry decarbonization talks mark progress: EDF
Industry decarbonization talks mark progress: EDF
Houston, 19 September (Argus) — Growing decarbonization discussions in the oil and gas industry is a sign that momentum is building toward reducing emissions, according to Mark Brownstein, senior vice president of energy transition for the Environmental Defense Fund (EDF). Brownstein, speaking on the sidelines of the Gastech conference in Houston, Texas, noted a "robust conversation" was happening to address CO2 and methane emissions from natural gas use, which was "something you would not have seen five years ago." "Now, what would really make me happy, is to come back here next year, and see that it's not just talk," he said. "That there's real investment, that there's real action and that we're actually beginning to see emissions of methane and other pollutants going down." Brownstein noted that more than 70 companies in the oil and gas industry have committed to the COP 28 decarbonization charter to get to near-zero methane emissions by 2030. "That is a commitment that needs to be expanded to all players," he said. "A commitment that needs to be expanded by investment and real action. I believe the industry can do it. But of course you need to see it." Earlier this year the EDF helped launch MethaneSAT, a satellite that will allow for real-time monitoring of global methane emissions, aimed at bringing transparency to global emissions data. By David Haydon Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Fed rate cuts 'no bearing' for CCUS: NET Power
Fed rate cuts 'no bearing' for CCUS: NET Power
Houston, 19 September (Argus) — Interest rate cut by the US Federal Reserve this week have "no bearing" on carbon capture, use and storage (CCUS) projects, according to the chief executive of power technology company NET Power, since most are still in the development phase. The majority of CCUS projects are in the "pre-revenue" stage with companies that are still "more focused on the engineering" aspects, chief executive Danny Rice said on the sidelines of the Gastech conference in Houston, Texas, today. The Fed on Thursday cut its target interest rate by 50 basis points, the first cut since 2020 and following an aggressive rate increase regimen to fight inflation. Lower interests rates lower borrowing costs for companies. Rice said earlier in the day during a CCUS panel discussion there was still a need to "get capital costs down". "Historically it would be challenging to deploy a new technology and scale into a flat or declining market, but ... we're talking about decarbonization for power generation," Rice said. "Power generation is growing globally." CCUS projects and other carbon capture technologies have been repeatedly criticized by non-governmental organisations as an excuse for continued fossil fuel use, although the UN Intergovernmental Panel on Climate Change has backed the technology. Rice stressed the importance of an "objective, physics-driven view" for policy regarding decarbonization, describing CCUS projects for gas-fired powerplants as the most cost-effective method to decarbonize power. "People are going away from this exercise of 'what's clean or not'," Rice said. "What matters is the outputs. The affordability, the reliability, the carbon intensity." By David Haydon Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK's RJH ceases trading, merges with Amalgamet
UK's RJH ceases trading, merges with Amalgamet
London, 19 September (Argus) — London-based minor metals firm RJH Trading (RJH) will cease its trading operations and all business will be transferred to Amalgamet Limited, Argus learnt today. Starting from 1 October, Amalgamet — the physical trading arm of non-ferrous metals at UK-based AMC Group — will take over the management of all RJH operations. Amalgamet is hiring the team from RJH, including Charles Swindon, the founder and managing director of RJH and former chairman of the Minor Metals Trade Association (MMTA), who will work as a consultant. Senior RJH traders in Scandinavia and India will trade for Amalgamet. Amalgamet, also headquartered in London, aims to expand further into more high-growth metals and take advantage of trading a greater diversity of metals and concentrates, both parties told Argus . Amalgamet mainly supplies base and minor metals, and through the merger will add new products that RJH has been trading for years including ferro-alloys such as ferro-chrome, ferro-silicon and other minor metals such as magnesium. For several metals including antimony there will be a crossover, as both trading firms have positions in the market. Charles Swindon told Argus the mix of the two portfolios is a good match and added that it is important to spread risk at a moment of geopolitical fragmentation. "This [partnership] brings over 100 years of invaluable trading experience in all metals as well as new opportunities in all parts of the world," he said. The financial details of the transaction have not been disclosed. By Cristina Belda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more