CRU aluminum: Trade continues to be hot topic

Written by Marziyeh Horeh

Mexico to remove the import tariffs on 76011002 and 76012002

The Mexican federal government backed down on the application of tariffs on raw non-alloyed and alloyed aluminum decreed on April 22. Through a decree published on Wednesday, May 8, in the Official Gazette of the Federation (DOF), the Ministry of Economy (SE) eliminated the application of tariffs to fractions 7601.10.02 and 7601.20.02, as well as the tariff corresponding to sulphate of ammonium. The elimination of tariffs applies as of May 9, in accordance with the provision.

In April, Mexico implemented tariffs on more than 500 product categories spanning various industries. Among these were specific categories of steel, aluminum, and ferroalloy products. These tariffs were applicable only to countries lacking a free trade agreement with Mexico.

Sims braces for poorer results

Ferrous and non-ferrous metal recycler Sims Ltd. says it anticipates its core performance measure, underlying Ebit, will end fiscal H2 to June marginally lower than the A$13.4 million (US$8.70 million) reported in the financial year’s H1. “The negative sentiment surrounding global steel markets continued to soften export scrap markets,” the Sydney-headquartered company said. “Despite relatively resilient performance, US steel markets weakened as evidenced by steel price reductions. US domestic scrap prices followed, although were less pronounced given sustained demand. Intense competition for scrap intake, particularly shredder in feed, continues.”

CEO and managing director Stephen Mikkelsen drew attention to SA Recycling in the US and ANZ Metal in Australia and New Zealand each facing greater hurdles. SA Recycling’s ferrous intake volumes and margins deteriorated in March and April, while ANZ Metal has faced lower domestic demand coupled with what Sims described as challenging export markets influenced by Chinese steel exports causing reduced demand and prices.

Mikkelsen added: “Pleasingly, despite North America Metal facing similar market challenges, we anticipate an improved second-half performance as early positive outcomes of the targeted strategies for margin improvement are emerging.” Those factors include increased unprepared scrap and stronger domestic sales volumes. In the UK, operational changes such as closure of non-strategic, loss-making yards, have reduced the cost base and improved margins, said Sims.

“The strategic review of UK operations is progressing as anticipated and has attracted significant interest. All options, ranging from a total sale through to retention of the business, remain under review,” the company added. The review was announced last November.

Norsk Hydro: Minutes from the Annual General Meeting 2024

On May 7, 2024, Norsk Hydro distributed the minutes from the Annual General Meeting 2024. According to the press release, all proposals on the agenda provided in the notice of the Annual General Meeting published on April 12, 2024, were adopted, including the proposal to distribute a dividend of NOK 2.50 per share. In addition, the Annual General Meeting resolved a capital reduction by cancellation of own shares and by redemption of shares held by the Norwegian State.

Finally, the company mentioned that the dividend will be paid on May 21 to shareholders as of May 7 who are registered as shareholders with the Norwegian Central Securities Depository as of May 10. The shares will be traded excluding the right to dividend from and including May 8.

US authorities could introduce duties on $100M of plate imports

It was previously reported that in the autumn of 2023, Kodak called for the tariffs citing  low prices that significantly undercut pricing in Kodak’s domestic market.

Preliminary findings from the US Department of Commerce state that combined countervailing (anti-subsidy) duties and anti-dumping duties should be applied to plates manufactured in China for Fujifilm of 102.07%; and for all other manufacturers of 171.12%; while plates made by Fujifilm in Japan have been handed a preliminary dumping duty of 87.81%.

Strong performance from Novelis despite weaker shipments

US-based aluminum recycler and products’ manufacturer Novelis suffered an 8.8% year-on-year (y/y) drop in net profit to $600 million in its fiscal year, ending in March. A higher income tax provision plus increased interest costs, as well as the “unfavorable timing” of unrealized derivative losses compared to a gain in the previous year, were to blame, the Atlanta-headquartered company said. Turnover went down 12.4% to $16.2 billion chiefly due to lower aluminum prices and a 3.2% decline in shipments to 3.67 million metric tons (mt).

Rolled shipments in FYQ4 2023 (January – March 2024) increased 2% year y/y but declined in FY23 overall 3% y/y. “The decrease in shipments is mainly due to lower beverage packaging shipments driven by customer inventory reductions in the first half of the fiscal year as well as softer demand for specialties products in a weaker macro-economic environment, partially offset by higher automotive shipments on strong demand,” Novelis said. “With customer inventory reductions complete, beverage packaging shipments increased sequentially each quarter of fiscal 2024 and demand continues to strengthen.”

Focusing on the positive, president and CEO Steve Fisher said: “Novelis delivered strong improvements in key financial metrics in the fourth quarter driven by lower operating costs, improved market demand, and higher benefit from recycling.” Net income went up 6.4% y/y in FYQ4 to $166 million and deliveries by 1.6% to 951,000 mt on the back of increased demand for beverage packaging sheet. But Novelis’ sales revenue dipped 7.3% to $4.08 billion.

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Marziyeh Horeh

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