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Commodities Roundup: Catalytic Converter Thefts, A $200 Billion Tariff Announcement

09/21/2018 By

For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts from particular commodity markets.

From price movements to policy decisions, our MetalMiner editors scour the landscape for what matters. This week:

Catalytic Converter Thefts on the Rise in the U.K.

MetalMiner’s Stuart Burns touched on an unfortunately familiar story: thefts of catalytic converters from automobiles.

On account of rising prices of rhodium, platinum and palladium, according to a Telegraph report, thefts of the converters have picked up in the U.K.

“Thieves are becoming very discerning, choosing certain models because of their relatively higher precious metal content (such as older Honda Jazz and Accord models) or due to their greater road clearance and easy accessibility (such as the Mitsubishi Shogun SUV).

“For reasons of accessibility alone, SUVs are a favorite target because a jack isn’t required to get underneath, speeding up the process and reducing the chance of being seen or heard.”

ArcelorMittal Nears Deal on Ilva Takeover

Burns also delved into ArcelorMittal’s takeover bid of Italy’s Ilva, for which discussions have focused on job levels at the plant post-takeover.

“The final deal agreed this month and announced on the company’s website states ArcelorMittal has committed to initially hire 10,700 workers based on its existing contractual terms of employment,” Burns wrote. “In addition, between 2023 and 2025, ArcelorMittal has committed to hire any workers who remain under Ilva’s extraordinary administration (essentially, its nationalized current operating position).”

Trump Administration Announces $200B in Tariffs on China

In perhaps the biggest news of the week, the Trump administration announced it plans to impose $200 billion worth in tariffs on Chinese goods, effective Monday, Sept. 24.

The finalized list of products has been dropped to 5,745 tariff lines from a previous list featuring 6,031 tariff lines.

“For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies,” the White House statement read. “We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But, so far, China has been unwilling to change its practices.”

The tariff rate on those products will increase from 10% to 25% as of Jan. 1, 2019, according to the White House statement.

Norsk Hydro Steps Away from Deal to Buy Icelandic Smelter

Hydro has backed away from a previous deal to buy Rio Tinto’s Icelandic aluminum smelter, Burns detailed earlier this week.

“The transaction to acquire Rio’s last remaining aluminum assets in Europe was initially expected to be finalized in the second quarter of 2018 following the surprise agreement by Rio to sell its aluminum Dunkerque smelter in France to Liberty House for U.S. $500 million in June,” Burns wrote.

“The announcement of sanctions on Oleg Deripaska in April this year — and by extension En+ and Rusal, the largest aluminum producer outside of China — has cast some doubts on alumina supplies for European smelters, as Rio sources some of the alumina for its ISAL plant from the Russian company’s Aughinish refinery in Ireland.”

Indian Steel Duties and Chinese Steel

In other steel news, India is considering raising its duty on some steel products, according to Reuters. The consideration comes as the Indian government is looking to offer support for the rupee.

Meanwhile, in China, investment in the country’s subways could prove to be a boon for the steel sector, per another Reuters report.

The report cites previously announced plans by two Chinese cities, Suzhou and Changchun, that would see the equivalent of billions of dollars invested in their subway systems (which, of course, would require quite a bit of steel).