Trade Tensions Escalate As Mexico Targets Vietnamese Steel Imports

By Metal Miner - Jan 03, 2024

• Vietnamese exporters of cold-rolled steel sheets now face new tariffs, although they can exempt themselves by proving non-Chinese steel sourcing.
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• The U.S. has also raised concerns over the origin transparency of steel and aluminum imports from Mexico.
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• Latin American steel production has declined due to low-cost imports and fluctuating global steel prices, affecting the region's self-sufficiency in steel production.
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Via Metal Miner

Neither China nor rising global steel player Vietnam had a very good 2023 due to fluctuating steel prices and demand. Like some other steel-producing countries, both have primarily resorted to flooding foreign markets with cheap steel products to remain in the black. This has led to massive protests from countries where these imports land, including India. 

Some importing nations have already imposed steep tariffs on such imports to protect their domestic players. Recently joining this growing list is Mexico. Indeed, 2024 may have started off on the wrong note for Vietnam, as this Mexico recently imposed a massive entry tariff of up to 80% on imports of certain steel products.

The decision came after domestic manufacturers like Ternium protested about unfair competition. The Mexican government then launched a major investigation to help them understand whether imports from Asian countries were a indeed serving as a major deterrent for local steel makers.

Hoa Phat and Posco Vietnam Can Still Avoid Tariffs

As a result, certain Vietnamese exports of cold-rolled steel sheets are now subject to the new tariffs. However, exporters can exempt themselves if they can demonstrate that they source their steel from countries other than China. This was made official in a statement by the economy ministry in Mexico’s official gazette. Hoa Phat, Vietnam’s largest steel manufacturer, now has a tariff of nearly 12%, whereas Posco Vietnam faces a 26% tariff. That said, the exemption for proving the country of origin is also available to these companies.

The U.S., too, continues to raise issues regarding the import of steel and aluminum goods from Mexico, citing concerns about the transparency of the products’ actual origins. Meanwhile, other global players wonder how all of these new developments will impact steel prices.

Why Vietnam?

Many steelmakers accuse China of dumping or selling off its excess steel in the Mexican market at prices that some report as being lower than production costs. Now it seems that certain Vietnamese companies are little more than a proxy for these Chinese firms. When the accusations of this “proxy trade” grew shriller, the Mexican government ordered an investigation. Soon after, they determined that any imports from Hoa Phat and Posco Vietnam, among others, would be taxed.

In Latin America, as with many other parts of the world, China is the biggest steel exporter. As per one estimate, the country supplies about one-third of steel products in this region. It was only last August that Mexico increased tariffs to 25% on a few steel imports from those nations, including China, that did not have a free-trade agreement. 

Is Steel Production in Latin America Declining?

The NASDAQ recently quoted a Reuters report saying that steel production in the Latin American region has fallen in the past few years. They mainly cite the low cost imports as well as fluctuating global steel prices and demand. Meanwhile, according to the Latin American association Alacero, the region was supposed to produce 83% of the steel it consumes in 2023. 

At a recent seminar, Alacero predicted that 2023 would see consumption go up by 2.4% compared to 2022, touching 71 MT. However, domestic production would see a decrease of 7.5%, totaling 58 MT. Compared to 2022, export volumes would show a drop of 2.6 MT, registering at 7.9 MT. At the same time, the volume of imports would go up by 2.1 MT to about 26.5 MT. 

Vietnam’s Side of the Story, Steel Prices, and Production Levels

If one were to look at steel market performance in Vietnam, the past year has not been too good. Indeed, there’s been a steep fall in steel prices and poor uptake, just like in China. Meanwhile,, Vietnam’s steel sector continues to experience a significant decline, as evidenced by the 19 price drops implemented since early 2023. The current price is approximately U.S. $548.56 (13.5 million VND) per ton.

Most analysts attribute the slumping Chinese steel prices to a sluggish real estate market, delayed public investment payouts, and intense competition from imports. Yet, some experts remain positive that the industry will recover this year due to the government’s ongoing policies. This includes a revised Land Law that could help the realty market and the construction industry.

Per figures from the Vietnam Steel Association (VSA), steel manufacturing output in September 2023 was about 2.34 million tonnes – up 2.41% month-on-month, but down 4.2% year-on-year. However, the domestic use of steel was about 2.2 million tonnes. This represents a 4.69% increase month-on-month and a 9.4% jump year-on-year. The VSA claims this is an indication of the positive steps taken by the government to remove hurdles and help the economy.

The VSA also noted that despite signs of revitalization in public investment and the real estate sector, the steel market will likely not experience a robust rebound until the first quarter of 2024.

By Sohrab Darabshaw

UK Manufacturing Sector Plunges Deeper Into Crisis

By City A.M - Jan 03, 2024, 

• The UK's manufacturing PMI fell to 46.2 in December, indicating a contraction in the sector.
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• Declines were driven by reduced new orders both domestically and from key trading partners like the US and Europe.
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• Business optimism dropped significantly, and the sector faced job losses and minimal increases in selling prices.

The UK’s manufacturing sector fell deeper into contraction in December, while business optimism fell to its lowest level in a year, a closely watched survey suggested.

S&P’s global UK manufacturing Purchasing Managers’ Index (PMI) slipped back to 46.2 in December, lower than the 46.4 recorded in the ‘flash’ estimate in mid-December.

December’s reading also marked a downturn from November’s reading of 47.2, which was a seven-month high. The 50-mark separates growth from contraction.

The deterioration in the manufacturing sector reflected weaker demand, both at home and abroad.

New business placed with UK manufacturers fell for the ninth month in a row with companies reporting that the weak economic backdrop was impacting demand. Poor weather conditions also contributed to the decline.

Source: S&P

Demand from key trading partners, like the US and Europe, saw a “further retrenchment” in new export business, which declined for the twenty-third consecutive month.

“UK manufacturing output contracted at an increased rate at the end of 2023,” Rob Dobson, Director at S&P Global Market Intelligence, said.

“The demand backdrop remains frosty, with new orders sinking further as conditions remain tough in both the domestic market and in key export markets, notably the EU,” he continued.

Things look unlikely to get better any time soon. Business optimism dropped to its lowest level in a year, reflecting a weak economy, high interest rates and client closures.

“With concerns about high interest rates and the cost-of-living crisis hurting demand, the outlook for manufacturers in the months ahead remains decidedly gloomy,” Dobson said.

With demand low and optimism fading, December saw further job losses in the manufacturing sector. This was linked to efficiency gains and hiring freezes, the report noted.

Selling prices rose for the second straight month, although only slightly. “Where an increase was reported, this was mainly due to efforts to protect margins,” the report said.

By City AM 

U.S. LNG Growth Sparks Climate Activism Uproar

By Irina Slav - Jan 03, 2024

• Climate activists focus on U.S. LNG, criticizing its health impacts on Gulf Coast communities and calling for a halt to new LNG facilities.
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• The U.S. LNG industry has grown rapidly, benefiting from the shale boom and bolstering the country's energy security, but now faces conflict between market demands and climate change goals.
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• Activists' pressure puts the Biden administration in a difficult position, balancing commitments to climate change agendas with geopolitical and economic realities of LNG exports.
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At the COP28 conference last month, climate activists were perhaps the most numerous demographic.

Normally, this demographic focuses either on oil and coal or all three hydrocarbons, including gas. This time, a group of activists had a much more specific target: liquefied natural gas. Even more specifically, the target for 250 activist organizations was U.S. LNG.

Last year, the United States became the world's largest LNG exporter, dethroning Qatar and Australia. It took the U.S. a little over a decade to do that, thanks to the shale boom that led to a surge in domestic gas supply. It was this abundance of supply that made it possible to turn the country into the world's largest exporter.

The industry is not stopping, either. There are plans for more capacity in the coming years as demand for gas—and specifically LNG—remains robust despite pessimistic forecasts from the International Energy Agency.

In this context of fast capacity growth, it was really only a matter of time before activists set their sights on LNG. According to one group representing people from poor communities on the Gulf Coast, the LNG industry expansion adds insult to injury for those who already live in the shadow of the massive Gulf Coast petrochemical industry and pay for it with their health.

They call the Gulf Coast a "sacrifice zone," which until recently was dominated by the massive refineries that turn the crude oil into fuel and petrochemicals. Now, the LNG trains turning gas into liquid to be sent across the world have been added to the targets.

"Because of what happened in Ukraine [they say] that American gas is freedom gas — we're no longer being held hostage by Russia. Well we have a saying in the states: freedom ain't free . . . The price we pay for it is pollution," former refinery worker and community activist John Beard told the Financial Times last November.

At the COP28 event, activists were blunter: they directly called on the Biden administration to stop approving new LNG facilities.

"We urge the Biden administration to publicly commit during COP to no further regulatory, financial, or diplomatic support for LNG in the United States or anywhere in the world," the group said in a letter to the White House.

This new gas-focused pressure is a tricky one for the Biden admin. It came into office with an ambitious climate change agenda, and it has largely stuck to it—with some notable exceptions, including LNG capacity approvals and the Willow oil project in Alaska.

That's not all, either. The Biden admin has essentially celebrated LNG—as did Europe until it saw the bill—as a means to reducing geopolitical allies' dependence on the new arch-enemy, Russia. This was bound to cause a stir among activists who happen to constitute a significant portion of Biden's voting base.

On a more practical level, it is all just another instance of the battle between climate targets and market forces. Climate targets dictate a phaseout of all hydrocarbons, even gas, which is the smallest emitter. Market forces dictate energy security, which hydrocarbons provide. Reconciliation of these two is, to put it mildly, challenging.

"The big question is: should the government step in to limit construction of new LNG facilities, or should it let the market decide if there is sufficient gas demand and financing for these projects to be built?" Ben Cahill, senior fellow at the Center for Strategic and International Studies, told the FT back in November. "So far, the latter approach has worked well, but it's getting harder to sustain."

In other words, for now, market forces are winning, but they won't keep winning forever if governments—and specifically the U.S. government—are serious about the energy transition. It's election year. Biden is running for re-election. His approval ratings are already dismal. Now, activists who typically vote Democrat are pushing for action against the LNG buildout that politicians widely consider to be a big positive for the U.S. as a global economic power.

It's a tough spot to be in, torn between transition and energy security. The two appear irreconcilable, and indeed, they are at this point. If the transition away from hydrocarbons worked as intended, Germany, for instance, would not need so much gas with its massive wind and solar generation capacity.

Yet the transition has not worked as intended, and even the most active builders of wind and solar have found themselves still very much dependent on oil and gas. And thanks to the U.S. and its LNG buildout, they have been able to secure the gas they need from a jurisdiction with which they don't have a geopolitical beef—an important public image consideration in this day and age.

Global natural gas demand is set to continue growing for the foreseeable future. LNG is the most convenient form of gas transport-wise. Demand for it will also grow in the coming years and likely decades unless activists prevail. If they do, it will be a major win for non-U.S. LNG producers.

By Irina Slav for Oilprice.com

Nutrien in Rocanville, Sask. fined $200K

for workplace injury

By Jeanelle Mandes 

 Global News

Posted January 3, 2024

Nutrien Tower in Saskatoon, Sask., which houses Nutrien’s executive leadership and corporate teams . 

Nutrien Ltd. was fined $200,000 for a workplace injury that occurred at a company facility near Rocanville, Sask., in 2021.

On Dec. 19, the company pleaded guilty to one violation of The Occupational Health and Safety Regulations, 2020, according to a release from the Saskatchewan government.

The company was fined for failing “to ensure that any opening or hole in a floor or other work surface into which a worker could step or fall is covered.”

A court fined the company $142,857.14 with a surcharge of $57,142.86, for a total amount of $200,000, the government said.

The charges stemmed from an incident on Sept. 20, 2021, near Rocanville, when a worker suffered a serious injury after stepping into an unguarded floor opening.

However, one other charge was withdrawn, according to a release.

A release read that the Ministry of Labour Relations and Workplace Safety works with employers and workers to eliminate workplace injuries and illnesses through education, inspections and prosecutions.

New hub starts commercial production of recycled rare earths in the UK

Staff Writer | January 3, 2024 |

Nickel-plated neodymium magnet cubes. (Reference image from Wikimedia Commons.)

A rare earths hub set up by the University of Birmingham, HyProMag Ltd and Mkango in Tyseley, central England, has started the production of recycled rare earths for the magnets used in electric vehicles, wind turbines and other clean technology industries.


The initiative is re-introducing commercial sintered magnet manufacturing back into the UK for the first time in over 20 years.

In a press release, the partners said that the Tyseley Energy Park is employing a mechanism dubbed Hydrogen Processing of Magnet Scrap (HPMS), which is a short-loop recycling method delivering materials that need only a few process steps to produce recycled ‘sintered’ rare earth permanent magnets that are made to recognized industrial grades.

HPMS is a new recycling technology that preserves the quality of the original magnets for reprocessing. Delivering an 88% energy savings and 98% human toxicity savings when compared to primary production, it is considered a cleaner and more energy efficient process than the traditional dismantling, thermal demagnetization and cleaning processes and lends itself to automated and efficient processing.

The Tyseley scale-up is underpinned by a successful pilot at the University of Birmingham. Since its commissioning in 2022, the pilot has produced over 3,000 finished NdFeB magnets for project partners and potential customers, which are now being tested in a wide range of applications in the automotive, aerospace and electronics sectors. Magnets have been produced in different grades from a variety of different scrap sources.

At present, this is the only local source of recycled rare earth permanent magnets in the UK.

The first production runs from the Tyseley site will provide further customer and project partner samples. Commercial production is targeted for 2024, with initial throughput targets of 20 tonnes per year of rare earth magnets and alloys, scaling up to a minimum of 100 tpa in subsequent months.

In the statement, HyProMag noted that it has received significant interest for recycled magnets from potential customers and for recycling solutions from original equipment manufacturers and automotive and recycling companies with larger scale-up scenarios capable of producing up to 1,000 tpa currently being evaluated.

“This is a major milestone for the company, HyProMag and for the UK, creating a strong platform to advance to commercial production and for the scale-up and roll-out of HPMS technology into Germany, the United States and other jurisdictions,” Will Dawes, Mkango’s CEO, said.

“HyProMag’s recycling technology has major competitive advantages versus other recycling technologies and is a key enabler for the cost-effective and energy-efficient separation and recycling of rare earth magnets, avoiding the need for dismantling, and enabling the production of magnets with a significantly reduced carbon footprint.”

Ivanhoe ships first copper through Angola via railway

Cecilia Jamasmie | January 3, 2024 

The first train of copper concentrate from Kamoa-Kakula, consisting of 16 wagons. (Image courtesy of Ivanhoe Mines.)

Ivanhoe Mines (TSX: IVN) (OTCQX: IVPAF) said its first shipment of copper concentrate from its Kamoa-Kakula copper complex in the Democratic Republic of Congo (DRC) had arrived by rail to the port of Lobito, in Angola.


The trial run consists of sending a total of 10,000 tonnes of copper concentrate along the new railway from the DRC through Angola, along the Lobito corridor.

The first 1,100 tonnes were sent on December 23 and arrived at Lobito on December 31, 2023. The shipment shows that Ivanhoe could shorten its export route from Kamoa-Kakula by two thirds, simplifying logistics and cutting costs.

Currently, the Canadian miner trucks copper concentrates from Kamoa-Kakula across sub-Saharan Africa to the ports of Durban in South Africa and Dar es Salaam in Tanzania, as well as Beira in Mozambique and Walvis Bay in Namibia.

The rail line, linking the DRC Copperbelt to the port of Lobito in Angola, is known as the Lobito Atlantic Railway Corridor. (Image: Ivanhoe Mines.)

Last year, nearly 90% of Kamoa-Kakula’s concentrates were shipped to international customers from the ports in South Africa and Tanzania, with an average round-trip taking between 40 and 50 days.

“Our first trial shipment is an important milestone on the path to creating a new supply chain linking the Central African Copperbelt to world markets,” Ivanhoe Mines founder and co-chairman Robert Friedland said in the statement.

“Establishing a reliable, modern rail link to the port of Lobito in Angola will have transformational benefits for the people of the Democratic Republic of the Congo, Angola and Zambia,” Friedland said.

Once fully active, the Lobito Atlantic Railway Corridor is also expected to reduce the Scope 3 emissions carbon footprint of Kamoa-Kakula copper exports.

P3

Top lithium miners eye partnership with Chilean government

Cecilia Jamasmie | January 3, 2024 |
SQM already has a deal with Codelco to mine lithium in northern Chile. (Image courtesy of SQM.)

Some of the world’s top lithium miners including Tianqi Lithium Corp. (SHE: 002466), LG Energy Solution (KRX: 373220) and Eramet SA (EPA: ERA) have met with Chilean government representatives in the past two months to explore potential partnerships to develop the country’s vast resources of the battery metal.


Data released on Chile’s transparency platform shows the three companies and Tesla’s representatives held meetings with authorities to discuss the new public-private lithium exploitation model announced in April.

Under President Gabriel Boric’s ambitious plan, any company wishing to explore for or mine lithium in the copper-rich nation must be in a partnership with the government, with the state holding a controlling stake.

The strategy aims to expand the extraction of lithium while using pioneering environmentally-friendly technology and including the input of local Indigenous communities.

Executives from China’s Tianqi, already a major SQM shareholder, discussed investment intentions in a meeting in December. So did LG Energy, while France’s Erament had approached authorities in November to explore an alliance in the 120,000-hectare lithium concession it owns in the Atacama region.

According to local paper El Mercurio, Tesla’s regional business development manager, Eugenio Grandio, also met with government officials to talk about strategies for electric mobility.

Tesla executives had met with the ministers of foreign affairs and mining in early 2023, just weeks before Boric announced the country’s new lithium strategy.

The two largest lithium producers, Albemarle (NYSE: ALB) and SQM (NYSE: SQM), already have operations in the country, which is the world’s second largest producer of the battery metal.

Only day before the end of 2023, Chilean lithium miner SQM managed to ink a deal with copper giant Codelco for the future development and production of the metal in the Atacama salt flat, in a tie-up set to kick off in 2025 and run through 2060.

Albemarle’s current contract with Chile expires in 2043, but CEO Kent Masters has said he is open to negotiating before the deadline.

 

Former Manitoba cabinet minister accused by colleagues of trying to rush mine project

Steve Lambert, The Canadian Press

A former Manitoba Progressive Conservative cabinet minister is denying accusations by two former colleagues that he tried to rush approval of a proposed mining project. The Manitoba Legislature in Winnipeg, Saturday, August 30, 2014. (THE CANADIAN PRESS/John Woods)

Infighting has erupted among Manitoba Progressive Conservatives with two former Tory cabinet ministers accusing a third of trying to push through approval of a large mining project after the party lost the Oct. 3 election.

Kevin Klein, who was environment minister, and Rochelle Squires, who was families minister as well as acting environment minister, say they were called by Jeff Wharton, who was economic development minister, with an unusual request. 

The date was Oct. 12 — nine days after the Tories lost the election but six days before the new NDP government was to be sworn in. Klein and Squires say Wharton, in separate phone calls, asked them to rush approval of the proposed Sio Silica mine project, which would create thousands of wells over 24 years across a large swath of southeastern Manitoba.

Wharton denies the accusation, and says he was simply calling to help collect information across various departments to pass on to the incoming government.

"That's what good governments do. They share information to ensure that we're making informed decisions," Wharton said in an interview this week.

"And in this case, going forward, we're ensuring this particular project was in a position for the new government to make an informed decision."

Klein and Squires say that's not true. They say Wharton asked them specifically to issue a ministerial order to a director in the bureaucracy to issue a licence for the project. Such a move would bypass cabinet.

Squires and Klein say they refused. In separate interviews, they said one reason was the fact the Tories had lost the election and approving a major project would violate a long-standing constitutional practice called the caretaker convention, which forbids outgoing governments from making big decisions except in cases of emergency.

"We lost the election, and it was the decision of the next government, and that's who it should have been the decision of," Klein said Wednesday.

Klein also cited the fact the project is still undergoing a review.

Squires, who served in cabinet for seven years, said such decisions are normally based on information from bureaucrats, and then taken to cabinet for a full discussion.

"I've never in my capacity as minister … approved something without having a full briefing from the respective department and its deputy (minister)," she said.

Klein and Squires had lost their seats in suburban Winnipeg. Wharton was re-elected in his rural seat northeast of the city.

A political analyst said an approval of such a major project by a defeated government would be unusual.

"The case of the silica sand project approval is precisely the type of major, consequential, highly contentious, longer-term decision which should not (be) considered to be made during the transition period," said Paul Thomas, professor emeritus of political studies at the University of Manitoba.

"Such an action would represent the far end of a continuum of inappropriate behaviour."

In the end, no licence was granted by the outgoing Tory government and the project remains a proposal. 

Manitoba's environmental regulator, the Clean Environment Commission, recommended against any decision in June, pending further study of the project's impacts.

Wharton said he had no power to try to force anyone's hand on the project.

"There was never any intent, nor did I have the authority, to direct or approve a project. Simple as that," he said.

"Getting all of our departments working through (and) sharing relevant information across all departments for the incoming government during the transition was what we were doing."

This report by The Canadian Press was first published Jan. 3, 2024

 

B.C. union representing Lower Mainland transit workers issues 72-hour strike notice

The Canadian Press

A union representing more than 180 transit workers in B.C. has issued a 72-hour strike notice.

CUPE Local 4500 represents workers employed by the Coast Mountain Bus Company, which runs transit operations for all of Metro Vancouver.

The notice is effective at 8 a.m. local time on Wednesday.

The union says it is still available to negotiate a collective agreement that avoids service disruptions.

It says job action could begin at 8 a.m. on Saturday with an overtime ban that would affect all operations in the Coast Mountain system.

The union says the last collective agreement expired at the end of 2022 and bargaining didn't start until this past October. 

Members voted 100 per cent in favour of a strike mandate last month.

"We regard job action as the last resort in our effort to reach a fair deal, but we don't see an alternative," Chris Gindhu, president of CUPE Local 4500, said in a statement. "To date, Coast Mountain has been unwilling to address our key issues."

Coast Mountain Bus Company President and General Manager Michael McDaniel said in a statement that the company has offered CUPE Local 4500 the same basic wage increase that was already agreed to by all other CMBC employees.

"This offer is consistent with other public sector settlements in British Columbia. We urge the union to return to the bargaining table to finalize a deal," said McDaniel.

The company says it does not anticipate the union’s potential overtime ban to impact transit services at this time.

This report by The Canadian Press was first published Jan. 2, 2024.

 

Elon Musk's SpaceX illegally fired workers who criticized him, U.S. labour board alleges

Josh Eidelson and Loren Grush, Bloomberg News

Elon Musk’s SpaceX illegally fired employees because they wrote and shared a letter about their workplace concerns, the U.S. labour board alleged.

A regional director of the National Labor Relations Board issued a complaint against SpaceX Wednesday, alleging that the company illegally interrogated, surveilled and retaliated against workers, agency spokesperson Kayla Blado said in an email. The fired workers include authors of a 2022 open letter protesting “inappropriate, disparaging, sexually charged comments on Twitter” by Musk, according to their attorneys.

The company, formally known as Space Exploration Technologies Corp., didn’t immediately respond to a request for comment.

A trial is set to begin March 5, the NLRB said.

Complaints issued by NLRB prosecutors are considered by agency judges, whose rulings can be appealed to the NLRB members in Washington, and then to federal court. The agency has the authority to order companies to reinstate fired workers and provide back pay, but generally can’t hold executives personally liable for alleged wrongdoing or issue any punitive damages.