U.S. new home sales hit six-month high; median price stays above $400,000

WASHINGTON (Reuters) – Sales of new U.S. single-family homes surged to a six-month high in September, but higher house prices are making homeownership less affordable for some first-time buyers.

New home sales jumped 14.0% to a seasonally adjusted annual rate of 800,000 units last month, the highest level since March, the Commerce Department said on Tuesday. August’s sales pace was revised down to 702,000 units from the previously reported 740,000 units. Sales increased in the populous South, as well as in the West and Northeast. They, however, fell in the Midwest.

Economists polled by Reuters had forecast new home sales, which account for more than 10% of U.S. home sales, increasing to a rate of 760,000 units. Sales dropped 17.6% on a year-on-year basis in September. They peaked at a rate of 993,000 units in January, which was the highest since the end of 2006.

Demand for housing surged early in the COVID-19 pandemic amid an exodus from cities to suburbs and other low-density locations as Americans sought more spacious accommodations for home offices and online schooling. The buying frenzy has abated as workers return to offices and schools reopened for in-person learning, thanks to COVID-19 vaccinations.

The median new house price accelerated 18.7% in September to $408,800 from a year ago. Sales continued to be concentrated in the $200,000-$749,000 price range. Sales in the under-$200,000 price bracket, the sought-after segment of the market, accounted for only 2% of transactions.

About 74% of homes sold last month were either under construction or yet to be built. There were 379,000 new homes on the market, unchanged from in August. Houses under construction made up 62.5% of the inventory, with homes yet to be built accounting for about 28%.

Builders are being hamstrung by shortages of key inputs like copper and steel because of strained supply chains. Lumber for framing remains expensive, while labor and some household appliances are also scarce.

The government reported last week that housing starts and building permits fell in September.

At September’s sales pace it would take 5.7 months to clear the supply of houses on the market, down from 6.5 months in August.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)

Trump sets metals tariffs but exempts Canada and Mexico

FILE PHOTO: Rolled steel are seen at a Hyundai Steel plant in Dangjin, about 130 km (81 miles) southwest of Seoul June 15, 2011. REUTERS/Lee Jae-Won/File Photo

By David Lawder, Antonio De la Jara and Dave Sherwood

WASHINGTON/SANTIAGO (Reuters) – President Donald Trump pressed ahead with the imposition of 25 percent tariffs on steel imports and 10 percent on aluminum on Thursday but exempted Canada and Mexico, backtracking from earlier pledges of tariffs on all countries.

Details of the plan came from a briefing by administration officials ahead of Trump’s speech, which had been due to start at 3:30 p.m. (2030 GMT). Trump will say that other countries can apply for exemptions, according to the administration, although details of when they would be granted were thin.

Trump has offered relief from steel and aluminum tariffs to countries that “treat us fairly on trade,” a gesture aimed at putting pressure on Canada and Mexico to give ground in separate talks on the North American Free Trade Agreement (NAFTA), which appear to be stalled.

Trump has also demanded concession from the European Union, complaining that it treated American cars unfairly and has threatened to hike tariffs on auto imports from Europe.

Stock markets in Canada and Mexico rallied on the news, as did the Canadian dollar and the Mexican peso.

There was no mention of Mexico and Canada giving ground on NAFTA in the proposals.

Trump’s tariffs have triggered the threat of countermeasures from the European Union and now China. The levies aim to hit Beijing, although China exports very little of either metal to the United States.

(Additional reporting by Michael Martina, Elias Glenn, Kim Coghill, Brian Love, Nichola Saminather, Doina Chiacu and Andrea Hopkins; writing by David Stamp and David Chance; editing by Jonathan Oatis and Frances Kerry)

EU upsets China with new steel price investigation

A worker verifies a product at a steel factory in Dalian, Liaoning province, China

By Philip Blenkinsop

BRUSSELS (Reuters) – The European Union has launched a new investigation into whether Chinese manufacturers are selling steel into Europe at unfairly low prices, angering China which says Europe’s steel problems are due to the region’s own economic weakness.

The European Commission has determined that a complaint brought by EU steel makers’ association Eurofer regarding certain corrosion resistant steel merits an investigation, the EU’s official journal said on Friday.

The Commission also said it would start another anti-dumping investigation into certain cast iron products from China and India as well as determining whether existing duties on Chinese steel seamless pipes and tubes should continue for another five years.

The EU has already imposed duties on a wide range of steel grades to counter what EU steel producers say is a flood of steel sold at a loss due to Chinese overcapacity and partly the cause of 5,000 British job losses.

A China Commerce Ministry official said Beijing attached a “high degree of attention and concern” to the case and that Europe’s steel problems were due to its own weak economic growth.

Wang Hejun, the head of the trade remedies investigation department, said in a statement on the ministry’s website that Europe should rationally analyze its steel industry’s problems.

“It should not adopt mistaken trade protectionist measures that limit fair market competition,” he said.

The EU investigation begins just days before the 15th anniversary of China’s accession to the World Trade Organization, when the country says new trade defense rules are supposed to kick in.

Until now, the EU has been able to compare Chinese prices with those of another country – in the current case Canadian prices. But, Beijing insists this should no longer be possible from Dec. 11.

If the United States, European Union, and other WTO members begin to take Chinese prices as fair market value, it will be much harder for them to challenge China’s cheap exports.

The European Commission proposed last month a new way of treating China, but its proposals still await approval from the EU’s 28 members and the European Parliament.

Aegis Europe, a group of European industry federations including Eurofer, said there was no legal requirement to change the way the EU treated China on Dec. 11 and that EU’s partners the United States and Japan would not be doing so.

G20 governments recognized in September that steel overcapacity was a serious problem. China, the source of 50 percent of the world’s steel and the largest steel consumer, has said the problem is a global one.

The EU currently has 40 anti-dumping and anti-subsidy measures in place, 18 of which are on products from China. Twenty more investigations related to steel are still ongoing, including three for which provisional duties are in place.

(Reporting By Philip Blenkinsop in Brussels, Yawen Chen and Nicholas Heath in Beijing,; Editing by Greg Mahlich and Jane Merriman)

China supporting steel exports, U.S. imposes hefty tariffs

Columns of steel are stacked inside the China Steel production factory in Kaohsiung, southern Taiwan

By Ruby Lian and David Lawder

SHANGHAI/WASHINGTON (Reuters) – China said it would persist with controversial tax rebates to steel exporters to support the sector’s painful restructuring, defying a United States move to impose punitive import duties on Chinese steel products.

A worldwide steel glut has become a major trade irritant, with China under fire from global rivals who say it is dumping cheap exports after a slowdown in demand at home.

In a marked escalation of the spat, the United States on Tuesday said it would impose duties of more than 500 percent on Chinese cold-rolled flat steel, widely used for car body panels, appliances and in construction.

However, China’s Ministry of Finance said it would “continue to implement a tax rebate policy on steel exports” as it tries to finance a costly capacity closure plan.

By far the world’s largest steel producer, China plans to eliminate 100-150 million tonnes of annual production – more than the U.S. produces per year – over the next five years. The cabinet said central government-controlled firms will cut steel and coal production capacity by a tenth in 2016-17.

The finance ministry said China was making special funds available to curb overcapacity in both steel and coal and would reward local authorities for exceeding their targets and meeting them early.

The policy document, though dated May 10, was published just hours after the U.S. tariffs were announced. It is the latest policy announced by different departments including the Ministry of Human Resources and Social Security to push forward capacity cuts.


The U.S. Commerce Department said the new duties effectively increase more than five-fold the import prices on Chinese-made cold-rolled flat steel products, which totaled $272.3 million in 2015. It found that products were being sold in the U.S. below cost and with unfair subsidies.

China’s Commerce Ministry expressed its “strong dissatisfaction” with the U.S. ruling, and said the United States should rectify its mistakes as soon as possible.

“The United States adopted many unfair methods during the anti-dumping and anti-subsidy investigation into Chinese products, including the refusal to grant Chinese state-owned firms a differentiated tax rate,” it said.

The Group of Seven rich nations plans to address the steel glut when it meets in Japan later this month, in a move seen likely to add to pressure on China.

Analysts said the potential closing off of the U.S. market would not substantially reduce China’s exports, accounting for just 2 percent of its total shipments.

“The duty will not have a big impact on China’s overall steel exports because the volume to the United States is very small… but because of anti-dumping, export destinations are becoming more and more dispersed,” said Kevin Bai, an analyst with CRU in Beijing.


While a flood of cheap Chinese steel has been blamed for putting some overseas producers out of business, China denies its mills have been dumping their products on foreign markets, stressing that local steelmakers are more efficient and enjoy far lower costs than their international counterparts.

China has also denied there are any inducements in place that encourage steelmakers to sell their products overseas, saying trade flows are determined by the market.

“Global demand is increasing, and Chinese steel products are very competitive, so exports are increasing a little, but the steel sector is mainly used to satisfy domestic demand and there has never been any policy support for large volumes of exports,” China Iron and Steel Association (CISA) chairman Ma Guoqiang said at a conference this week.

However, a vaguely-worded statement from the central bank and several other government bodies last month said China would encourage exports and provide financing for steel and coal firms looking to move overseas.

While the government has offered as much as 100 billion yuan ($15 billion) to help handle worker layoffs, China’s debt-ridden steel sector cannot afford to abandon the financial lifeline provided by exports.

Foreign sales reached a record 112.4 million tonnes last year, up 19 percent, though total value fell 10.5 percent to $62.8 billion as a result of plunging prices.

More than half of large steel mills still made losses last year, according to the CISA.

Steelmakers have called on more proactive support for the export business, with Chen Ying, the general manager of Jiangsu Shagang, telling a conference on Monday that boosting foreign sales would help speed up the country’s restructuring efforts.

“China should support exports – steel product exports and moving projects and plants abroad,” she said.

(Reporting by Ruby Lian and David Lawder, with additional reporting by David Stanway and Michael Martina; Editing by Lincoln Feast and Ian Geoghegan)