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This morning in metals news, President Donald Trump on Sunday said he is not ready to make a trade deal with China just yet, ArcelorMittal faces falling steel prices as it attempts to revive India’s Essar Steel and the Department of Commerce today added 46 Huawei affiliates to the Entity List.

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Trump ‘Not Ready’ for a Deal

On Sunday, President Trump said he’s “not ready” to make a deal with China on trade.

Earlier this month, the president announced a 10% tariff on an additional $300 billion in Chinese goods.

“We’re doing tremendously well, our consumers are rich, I gave a tremendous tax cut, and they’re loaded up with money,” Trump was quoted as saying by Reuters.

Falling Steel Prices Impact ArcelorMittal’s Essar Plans

Falling steel prices could complicate steelmaker ArcelorMittal’s plans to bring India’s Essar Steel back to health, according to a report by the Hindu Business Line.

Earlier this year, ArcelorMittal put forth a $6 billion bid to buy the bankrupt Indian steelmaker, which was approved by an Indian court in July.

DOC Adds Huawei Affiliates to Entity List

On Monday, the Department of Commerce announced the addition of 46 affiliates of Chinese tech firm Huawei to the Bureau of Industry and Security (BIS) Entity List.

However, the BIS will also extend certain licensing agreements to Huawei for 90 days, effective today.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

“BIS has also announced that it will extend the Temporary General License (TGL) authorizing specific, limited engagements in transactions involving the export, reexport, and transfer of items – under the Export Administration Regulations (EAR) – to Huawei and its non-U.S. affiliates which are subject to the Entity List,” the Department of Commerce said in a release. “The continuation of the TGL is intended to afford consumers across America the necessary time to transition away from Huawei equipment, given the persistent national security and foreign policy threat. This license will be effective on August 19, 2019 and last an additional 90 days.”

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As metals buyers look to lock in their metals spend strategy, a reported decision by U.S. Steel could throw a wrench into some of those plans.

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According to a report by S&P Global Platts, the Pittsburgh-based steelmaker plans to move away from spot market-based adjustable price contracts for its sheet steel customers in 2020.

According to an internal letter cited by Platts, the steelmaker said “volatile and unpredictable” conditions in the flat-rolled market have contributed to increased use of adjustable price mechanisms.

A spokesperson for U.S. Steel declined to comment for this story, stating the company does not discuss customer relationships publicly.

In the second quarter of 2019, 23% of U.S. Steel’s steel in its flat-rolled segment was sold on spot-based contracts, according to the steelmaker’s quarterly reporting.

Meanwhile, 77% of the steelmaker’s sales came via contract-based arrangements, including: firm prices (33%); cost-based (5%); market-based, quarterly (20%); market-based, monthly (18%); and market-based, semi-annual (1%).

For the full-year 2018, the flat-rolled segment’s sales mix came in at 21% spot to 79% contract (33% fixed; 23% market-based, quarterly; 16% market-based, monthly; 6% cost-based; and 1% market-based, semi-annual).

The steelmaker recorded shipments in its flat-rolled segment of 3.08 million net tons in Q2 2019, up from 2.73 million net tons in Q1 2019.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

However, in Q2 the average selling price per net ton from the steelmaker’s flat-rolled segment came in at $779 per net ton, down from $798 per net ton in Q1 and $819 per net ton in Q2 2018.

U.S. steel prices have steadily declined since mid-2018, a few months after the Trump administration used Section 232 of the Trade Expansion Act of 1962 to impose a 25% tariff on imported steel.