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This morning in metals news, the United States Trade Representative outlined the mini-trade deal reached with China late last week, ArcelorMittal and Nippon Steel completed their acquisition of Essar Steel, and the Pilbara Ports Authority saw its November throughput increase 8% year over year.
Late last week, the U.S. and China announced they had reached a deal in principle on a mini-trade deal that would see the U.S. pull back on $160 billion in tariffs on Chinese goods in exchange for the latter’s agreement to purchase more U.S. agricultural goods.
In 2017, U.S. agricultural exports to China reached $23.8 billion, accounting for 17% of all U.S. agricultural exports. The U.S.’s agricultural exports reached a high of $29.4 billion in 2013.
In an interview Sunday on CBS’ “Face the Nation,” United States Trade Representative (USTR) Robert Lighthizer said agricultural exports to China are expected to reach between $40 billion and $50 billion annually over the next two years, Reuters reported.
While the text of the agreement itself has yet to have been made public, the USTR summarized the deal in a release Friday.
“The United States and China have reached an historic and enforceable agreement on a Phase One trade deal that requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange,” the USTR said. “The Phase One agreement also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years. Importantly, the agreement establishes a strong dispute resolution system that ensures prompt and effective implementation and enforcement. The United States has agreed to modify its Section 301 tariff actions in a significant way.”
According to the USTR fact sheet, the deal includes chapters covering: intellectual property, technology transfer, agriculture, financial services, currency, expanding trade and dispute resolution.
ArcelorMittal, Nippon complete Essar acquisition
After a long and winding process that has played out in the courts over the last two years, ArcelorMittal and Nippon Steel have finally completed their acquisition of the insolvent Indian steelmaker Essar Steel.
The joint venture will be called ArcelorMittal Nippon Steel India Limited, which will run Essar Steel; ArcelorMittal owns 60% of the joint venture, with Nippon holding the balance.
“The acquisition of Essar Steel is an important strategic step for ArcelorMittal. India has long been identified as an attractive market for our company and we have been looking at suitable opportunities to build a meaningful production presence in the country for over a decade,” ArcelorMittal Chairman and CEO Lakshmi Mittal said. “Both India and Essar’s appeal are enduring. Essar has sizeable, profitable, well-located operations and the long-term growth potential for the Indian economy and therefore Indian steel demand are well known. The transaction also demonstrates how India benefits from the Insolvency and Bankruptcy Code, a genuinely progressive reform whose positive impact will be felt widely across the Indian economy.”
PPA sees November throughput rise 8%
Australia’s Pilbara Ports Authority recently reported November shipments increased 8% on a year-over-year basis.
Total throughput for the 2018-2019 fiscal year reached 291.5 million tons, marking a 2% year-over-year increase.
Port Hedland, a critical iron ore terminal, saw throughput of 43.8 million tons (43.3 million tons of which was iron ore), which marked a 9% year-over-year increase.
Meanwhile, imports of 158,000 tons in November at Port Hedland marked a 45% year-over-year increase.
