October 4, 2021 – The LME started the week relatively quiet. In the U.S.-EU steel dispute, the views are still far apart – at least the consensus is that an agreement must be reached. And EU aluminum producers are running out of magnesium in two months, according to industry sources.
EU-U.S. steel dispute: “The positions are far apart”.
According to media reports, the positions in the U.S.-EU tariff dispute over steel and aluminum are far apart. Even though they are at an advanced stage of negotiations. Asked about his stance on a possible quota solution, EU trade chief Vladis Dombrovskis had said that a quota solution could only be considered in a win-win situation.
U.S. steel industry of national security interest
Gina Raimondo, U.S. Commerce Secretary said again that protecting the U.S. steel industry is of national security interest. She added that since the imposition of the tariffs, the domestic steel industry has reached a capacity utilization rate of over 80%, something that was unthinkable in the decade prior.
Unbalanced trade in steel
The unbalanced trade balance between U.S. steel exports to the European Union (about 1 million tons in 2019) and imports of steel products from the EU (about 4.5 million tons in 2019) is also likely to provide further points of contention.
Raw material dilemma: EU dependent on China
The European economy is dependent on the Chinese raw material drip. Due to drastic energy cuts in China, silicone metals and magnesium have become extremely scarce and prices have skyrocketed.
EU aluminum producers running out of magnesium
This is also being felt by the EU aluminum industry, whose primary manufacturers say they are 95% dependent on Chinese magnesium imports. And now warns that European aluminum producers will run out of magnesium in two months if no solution is found with China.
European Aluminium demands cheap raw materials from China
In the same breath, however, the lobby organization European Aluminium is calling for a stronger blockade of cheap semi-finished aluminum imports from the Asian country. It is not the best basis for negotiations, similar to the EU’s dispute with Russia over natural gas supplies or the ongoing nickel dispute with Indonesia, to insist on cheap raw materials, but at the same time exclude the higher quality semi-finished and finished products from the EU market.
London: Nickel and aluminum slightly up
The values on the LME tend slightly into positive territory today, Monday. The LME Daily is currently at about 1.16% in the plus. Nickel with 0.15% and aluminum with 0.22%.
Source: lme.com
Read also:
- Stainless Espresso: Deal on aluminum tariffs must include protection from China
- Stainless Espresso: Talks in EU-U.S. tariff dispute without solution
- Stainless Espresso: 3.5 million tons less aluminum production in China
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