British Steel, the U.K.’s second-largest steelmaker, went into liquidation Wednesday. The firm had previously acquired a government loan equivalent to $152 million to pay its carbon bill, and sought another loan to avoid collapse.
Unfortunately for the firm — which employs 5,000 directly with an additional 20,000 depending on its supply chain — that never came.
MetalMiner’s Belinda Fuller touched on the relationship between a weakening Chinese yuan and U.S. imports of cold-rolled coil (CRC).
“With the Chinese currency weakening once more against the U.S. dollar, MetalMiner expects Chinese imports will start to look increasingly attractive to would-be U.S.-based importers,” Fuller wrote.
“However, once we account for the tariffs and import costs, the spread between U.S. and Chinese prices looks effectively negligible.”
Housing starts showed more life in April, according to data released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.
U.S. steel mills continue to operate above the 80% capacity utilization barrier, noted by the Department of Commerce at the outset of its Section 232 investigations into steel and aluminum as its goal for those sectors.
According to the American Iron and Steel Institute (AISI), U.S. steel mills reached a capacity utilization rate of 81.8% for the year through May 18. In that time, domestic mills churned out 37.5 million net tons.
The European Steel Association (EUROFER) argued the European steel sector is faced with a “perfect storm” of challenges, namely rising imports, rising raw material costs and slower economic growth.
EUROFER bemoaned the import situation, arguing the EU’s steel safeguards imposed this year have not been effective.
“Surging import volumes, stalling economic growth, high and volatile raw material costs, and sharply growing carbon costs are coming together to form a perfect storm that could knock the European steel industry back into a period of severe crisis,” the association said in a release last week. “The impact of this combination of factors has already begun to affect European steel producers, with facilities being idled and production being cut back significantly across Europe.”
MetalMiner Executive Editor Lisa Reisman took a deep dive into the world of tariffs this week, including some misconceptions about its impacts.
Black Concrete Nails
“Commodities move from bear to bull and back to bear markets cyclically,” Reisman wrote. “Tariffs — at least, Section 232 tariffs for steel and aluminum — have not resulted in undue ‘costs’ to consumers. The data from 2011-2012 shows us metal prices can rise to similar levels as they did in 2018 without tariffs.
“Blaming rising prices on Section 232 tariffs and a trade war might sound convenient but lacks all historical price perspective.”
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