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This morning in metals news, U.S. imports of steel dropped in February after an import-heavy January, Alcoa released its first-quarter financial results and flat-rolled aluminum producer Novelis is looking to secure exemptions on its pending requests related to tariffs covering Canadian aluminum.

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Steel Imports Fall Back in February

Steel import market share for the U.S. hit 20% in February, down from 25% in January, according to an American Iron and Steel Institute (AISI) report citing Census Bureau data.

The U.S. imported 2.43 million net tons (NT) of steel in February 2019 (down 30.1% from January).

Meanwhile, for the first two months of the year, imports reached a combined total of 5.91 million NT, up 10.2% from the January-February 2018 period.

Alcoa Reports Q1 Financial Results

Pittsburgh-based aluminum producer Alcoa unveiled its Q1 financial results this week, reporting revenue of $3.09 billion in the quarter (up from $2.72 billion in Q1 2018 but down from $3.34 billion in Q4 2018).

“We improved our operations in the first quarter, even as alumina and aluminum prices weakened,” Alcoa President and CEO Roy Harvey said. “Our Bauxite and Alumina segments increased their production rates, and we took steps last quarter to restructure our Aluminum portfolio.”

The firm reported adjusted EBITDA (excluding special items) of $732 million, down from $770 million the previous quarter and up from $467 million in Q1 2018.

Alcoa expects the 2019 global aluminum deficit to range between 1.5 million and 1.9 million metric tons, marking a slide from the previous quarter’s full-year estimate of between 1.7 million and 2.1 million metric tons.

Novelis Seeks Canadian Aluminum Tariff Exemption

The U.S.’s Section 232 tariffs on imported steel and aluminum remain in effect, including against NAFTA partners Canada and Mexico. The countries’ executives signed a new trade deal — the United States-Mexico-Canada Agreement (USMCA) — to replace NAFTA late last year, but the deal still must be ratified by each country’s legislature.

So, the tariffs continue to remain in place for U.S. imports of steel and aluminum from its neighbor to the north.

U.S. flat-rolled aluminum product maker Novelis is hoping to secure additional exemptions on Canadian aluminum, WRVO reported, as it argues the tariffs are negatively impacting its Oswego plant in western New York State. The report notes Novelis has already received exemptions for a large number of other products, but has approximately 250 requests pending with the Department of Commerce and Customs and Border Protection.

In other Novelis news, the firm announced automaker Toyota had selected it to supply aluminum for the 2019 RAV4.

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According to a Novelis release, Novelis aluminum would be featured in the vehicle’s hood, fenders and lift gate, yielding a vehicle that is 4% lighter than previous models.

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Miner Rio Tinto released its first-quarter production results this week and downgraded its 2019 iron ore guidance on the heels of the recent cyclones battering the Western Australia coast.

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“Our iron ore business faced several challenges at the start of this year, particularly from tropical cyclones,” Rio Tinto CEO JS Jacques said in a prepared statement. “As a result, and following the continuing assessment of damage at the port resulting from the cyclones and other minor disruptions, 2019 guidance for Pilbara shipments is reduced to between 333 and 343 million tonnes.

“The quarterly operational performance in our other products was solid, generally higher than last year. Our focus remains on safety, delivering our ‘value over volume’ strategy and allocating capital with discipline, to continue delivering superior returns to our shareholders in the short, medium and long term.”

The new guidance for Pilbara iron ore shipments — of 333 million-343 million tons — is down from previous guidance of 338 million-350 million tons.

Pilbara iron ore shipments reached 69.1 million tons in the first quarter, down 14% year over year. Pilbara iron ore production of 76.0 million tons marked a 9% decline from Q1 2018.

“Production was significantly impacted by the weather disruptions in March and a fire at Cape Lambert A in January,” the Rio Tinto announcement states. “These events will have an impact on second quarter performance.”

Last month, Tropical Cyclone Veronica battered the northwestern Australia coast, leading to damages at the Cape Lambert A port terminal. The weather event led to the miner declaring force majeure on some iron ore contracts.

Earlier this month, Rio Tinto said the impact of Tropical Cyclone Veronica amounted to 14 million tons of iron ore production.

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Meanwhile, in other materials:

  • Rio Tinto’s Q1 bauxite production reached 12.8 million tons, up 1% from Q1 2018 and up 8% from the previous quarter.
  • Aluminum production hit 796,000 tons, flat on a year-over-year basis and down 3% from Q4 2018.
  • Iron ore pellets and concentrate production reached 2.5 million tons, up 5% from Q1 2018 but down 13% from Q4 2018.