Author Archives: Taras Berezowsky

Welcome to the (re)launch of the MetalMiner Podcast!

(We’re calling it a relaunch because, well, remember this?)

With everything that’s been happening on the international trade policy front over the past year, we wanted to give metal buying organizations more insight into the issues they may not be reading or hearing enough about — or at all — in the mainstream B2C media.

What better way to do so than go straight to the source — or sources — and interview some key movers and shakers on the manufacturing and policy fronts? So we’re starting a brand-new series called “Manufacturing Trade Policy Confidential.”

New Series: Manufacturing Trade Policy Confidential

In this first episode of the series, MetalMiner Executive Editor Lisa Reisman interviews Michael Stumo, CEO of the Coalition for a Prosperous America.

Stumo’s concerns, and those of his organization, cut across industry sectors and political leanings. In this conversation, Stumo outlines what he sees as the most crucial elements to consider in today’s trade environment, touching on everything from China to the German Mittelstand to Alexander Hamilton as economic visionary.

Manufacturing Trade Policy Confidential: Background

If you’ve visited MetalMiner’s digital pages over the past several months, you’re no stranger to the phrase “Section 232” — shorthand for the U.S. Department of Commerce investigation into whether certain steel imports constitute a national security risk, under the namesake section of the U.S. Trade Expansion Act of 1962.

The outcome of the investigation (findings from which were slated to come down last summer but have been delayed) could have significant effects on upstream and downstream manufacturing organizations, ranging from metal producers to buying organizations – even the mom-and-pops.

But Section 232 is only one small part. Trade circumvention, China’s non-market economy status, domestic uncertainty amidst proposed tax plans and many other issues have pushed us to start this new podcast series.

We’ll be publishing several more interviews in the coming weeks and months – stay tuned!

Follow the MetalMiner Podcast on SoundCloud.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Here’s What Happened

  • MetalMiner’s Global Precious MMI, tracking a basket of precious metals from across the globe, ticked back up a point to 87 for the November reading, a 1.2% increase. After a sizable dropoff last month, it looks as though this sub-index is crawling back toward the 2017 high of 89 reached this past September.
  • Palladium forged ahead, hitting a new high this year and landing a bit shy of the $1,000 per ounce mark. The platinum group metal’s U.S. bar price has jumped a whopping 44% since the beginning of the year.
  • Platinum rose marginally over the last month, staying just above the $900 per ounce level. It has receded from its most recent high of March 2017, when it landed above $1,000 per ounce. Notably, this is the second straight month in which palladium is priced at a premium to platinum.
  • After breaking and holding above the $1,300 per ounce threshold at the beginning of September for the first time since October 2016, the U.S. gold price is in its third straight month of retracement, ending up $9 per ounce lower than last month.

What’s Going On in the Background?

  • Why has palladium been trading at a premium to platinum? First, a bit of history.
  • “Palladium has traded at a discount to platinum because of platinum’s greater cost of extraction and its wider scope of applications,” MetalMiner’s editor at large Stuart Burns recently wrote. “But one application in which palladium does excel is catalytic converters for petrol engines. The diesel engine’s relative loss of favor over the last 12 to 18 months to the petrol engine has boosted demand for palladium, driving up the price to the point that it exceeded that of platinum for the first time in 16 years.”
  • Burns quotes analysts from UBS and SP Angel as saying they anticipate both palladium and platinum production to fall.

What Metal Buyers Should Look Out For

  • In the short term, keep an eye out on car sales. “With car sales growth featuring more in petrol-engine-dominated American and Chinese markets, and less in diesel markets like Europe, the demand bias has been for palladium, rather than platinum,” Burns writes. “But even within Europe there is gradual shift from diesel to petrol.” In fact, according to industry research group LMC, sales of diesel cars in western Europe fell from 45.1% of the market to 42.7% this year.
  • In the long term, the Rise of the Machines — electric vehicles, specifically — could really dent platinum and palladium demand.

Free Sample Report: Our Annual Metal Buying Outlook

Key Price Movers and Shakers

For full access to this MetalMiner membership content:
Log In |

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Here’s What Happened

  • MetalMiner’s Global Precious MMI, tracking a basket of precious metals from across the globe, cooled off considerably after a sharp rise last month. For October, the sub-index dropped 3.4% to hit 86. That’s nearly back to the August 2017 level.
  • Palladium held steady for a month, but still continues a measurable march upwards. The platinum group metal held above the $900 per ounce level for the second straight month.
  • Platinum did lose a bit of its luster, however, falling back toward the $900 per ounce level and receding from its most recent high of March 2017 (when it landed above $1,000 per ounce). What does that mean? Something quite historic (see the section below)
  • After breaking and holding above the $1,300 per ounce threshold at the beginning of September for the first time since October 2016, the U.S. gold price retraced its steps as well, diving back under that level for the beginning of October.

What’s Going On in the Background?

  • We have quite the record to report. ICYMI, my colleague Fouad Egbaria noted recently that the platinum-palladium relationship reached a milestone: “As of Oct. 1, palladium closed higher than platinum. The last time that happened? Sixteen years ago.”
  • According to a research note from commodities broker SP Angel quoted within a report by Kitco News, “Palladium is benefitting from its inclusion in catalytic converters in gasoline-powered vehicles, which is expecting robust growth from the shift from diesel engines following the 2015 Volkswagen emissions-rigging scandal, and hybrid electric vehicle demand.”

What Metal Buyers Should Look Out For

  • Other analysts have thoughts on platinum/palladium outlook as well. “In the short term, we think platinum is undervalued for a whole host of reasons. Therefore, we think there is scope for platinum to move back to a slight premium in the short to medium term,” Robin Bhar, metals analyst at Societe Generale, was quoted as saying in the Kitco News report. “We don’t see a sustainable premium of palladium over platinum…until about 2020 or 2021.”
  • Overall, however, investors have been seeing nice returns, according to International Banker. The article notes a Reuters poll “of 26 analysts and traders conducted in July, [in which] the average palladium price for 2017 [was] being predicted at $811 per ounce for this year, which is 5 percent above the previous poll conducted in April…[and] the highest annual average price on record, going back three decades.” Well, now we’ve broken $900 per ounce.
  • That makes Standard Chartered rosy as well. “We remain constructive on palladium’s outlook,” according to the bank’s analyst, Suki Cooper. “Not only is the market set to deliver a deficit this year, but it looks set to be undersupplied over the coming years.”

Free Sample Report: Our Annual Metal Buying Outlook

Key Price Movers and Shakers

For full access to this MetalMiner membership content:
Log In |

Pavel Losevsky/Adobe Stock

Standing in for Fouad Egbaria, here is your morning in metals, folks.

Aluminum Highlights

Feeling behind on aluminum industry activity and economic drivers? Look no further than the Aluminum Association’s latest comprehensive rundown, including import trends and key raw material inputs such as energy.

According to their highlights, the majority of aluminum imports into the U.S. are in ingot form. “After three consecutive months of declining volumes, ingot imports increased 1.8 percent month-over-month in July,” the report states, citing U.S. Census Bureau figures. “Nevertheless, imports of ingot increased 19.0 percent year-over-year in July, and are up 22.7 percent year-to-date over the same period in 2016. While the growth has occurred across the spectrum of ingot importing countries, the largest year-to-date increases have originated from South Africa, India, and Australia.”

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

EPA Clean Power Plan: Trump Takes Over Obama’s ‘Fuzzy Math’

President Trump made quick moves to ax the Clean Power Plan, whose benefits the previous administration said would dwarf its costs (of which, MetalMiner speculated, there would be many).

Now, Trump and his EPA chief, Scott Pruitt, are trying to massage the numbers behind those costs and benefits — and it may be a tough proposition to get things right.

Electric Cars All the Rage?

Arnoud Balhuizen, chief commercial officer at BHP, was quoted by Reuters as saying on Tuesday that 2017 will be a “tipping point” for electric cars, adding that “the impact for raw materials producers would be felt first in the metals markets and only later in oil,” according to the news service.

“In September 2016 we published a blog and we set the question – could 2017 be the year of the electric vehicle revolution?” Balhuizen said in an interview, Reuters reported.

Free Download: The September 2017 MMI Report

MetalMiner’s correspondent in India, Sohrab Darabshaw, will have an upcoming piece later this week about how that very revolution is shaping up in the world’s second-most populous country – stay tuned!

Here’s What Happened

  • MetalMiner’s Global Precious MMI, tracking a basket of precious metals from across the globe, tore itself away from a one-month downward trend to rise 4.7% for a reading of 89. That value was up from 85 at the beginning of August.
  • Palladium continues its steady yet undeniable march upward. The platinum-group metal (PGM) crushed it with yet another recent high, ending up above the $900 per ounce level as of Sept. 1. As of this writing, palladium is holding on to that increase, still hovering near that level.
  • Platinum is no slouch either, creeping upward even closer to its recent high of March 2017, when it landed above $1,000 per ounce.
  • The U.S. gold price broke — and held above — the $1,300 per ounce threshold at the beginning of the month for the first time since October 2016.

Two-Month Trial: Metal Buying Outlook

What’s Going On in the Background?

  • Unless you’ve been living in a cave, you would’ve been hard-pressed to miss the hurricane and tropical storm news of the past couple weeks. No sooner did Hurricane Harvey slam into the Texas Gulf Coast region, Hurricane Irma made her way up into the center of Florida soon after.
  • Aside from natural disasters, other price drivers, such as political uncertainty surrounding North Korea and the U.S. Congress’ tussle over how to deal with the debt ceiling — and potential government shutdown — certainly have taken their toll on investor sentiment.

What Metal Buyers Should Look Out For

  • How will the recent storm disasters affect precious metals prices? It could hit gold and silver refiners especially hard, as South Florida is home to one of the biggest precious refiners in the country and is also a hub for “assaying, refining, logistics and financing operations,” according to this article citing, ultimately, reporting done by the Miami Herald. If you’re in the market for those two metals, keeping an eye on the short-to-medium term aftermath of Hurricane Irma looks to be crucial.
  • As for the PGMs, platinum prices may turn around to the downside soon, if the recent outlook of the World Platinum Investment Council (WPIC) is to be believed. The WPIC foresees a stalling of supply out of South Africa for the balance of 2017, while demand will equally stall, according to the council. In terms of palladium’s future, analysts at Commerzbank told DigitalLook “the metal used by the auto industry in emissions-controlling catalytic converters was benefiting from strong Chinese car sales data but that sales there are likely to weaken.”
  • Of course, vehicle replacement in Texas and Florida post-hurricanes could do their part to support platinum and palladium prices. Be sure to check out how MetalMiner’s Automotive MMI fared.

Key Price Movers and Shakers

    For full access to this MetalMiner membership content:
    Log In |

Here’s What Happened

  • MetalMiner’s Global Precious MMI rose 2.4% to a value of 85, breaking into a new high for 2017.
  • Our sub-index tracking gold, silver, platinum and palladium prices from around the globe last hit this level in October 2016, when it reached a value of 86.
  • That makes two straight Augusts (2016 and 2017) of strong performance for precious metals. After a lackadaisical second half of 2015 and first half of 2016, the Global Precious MMI hit a scorching 89 in August 2016 — the index’s highest peak since February 2015.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

What’s Going On in the Background?

  • Since we tend to keep a closer eye on the platinum group metals (PGMs) due to their automotive applications, the U.S. platinum price tracked by the MetalMiner IndX ticked back up 2.3%, while the U.S. palladium price continued steamrolling, rising 3.4% on the month.
  • These PGM prices increases, in addition to marginal upticks for gold and silver in the U.S., are the main drivers of the index’s gain.
  • As we reported in June, platinum companies continue to battle for profitability — one such firm being South Africa’s Lonmin. After the company reopened shafts and expanded its biggest operation a couple months ago, it’s now planning to sell excess processing capacity “of up to 500,000 platinum ounces per year, to maximize cash from processing operations and preserve cash,” according to Reuters. The tough economic environment in South Africa, as well as inflationary pressures on platinum mining in general, are to blame.

What Metal Buyers Should Look Out For

  • Certainly keep an eye on the global automotive sector, which has been motoring along lately in China especially, as the longer-term driver (HA!) here.
  • Certain rosy outlooks from firms such as Research and Markets indicate a bullishness that refuses to let up on the gas (it’s August, y’all, we’re getting those all out of our system before the fall revs up — see?!). According to my colleague Fouad Egbaria’s coverage, “advances in automobile technology and pharmaceutical applications will see a rise in demand for this subset of metals, according to the research report.”
  • The dog days of summer have shown life with a last gasp, perhaps setting the stage for a continued rise into autumn, especially if political turmoil gets any worse and any looming stock market corrections set the tone.

Free Sample Report: Our Annual Metal Buying Outlook

Key Price Movers and Shakers

    For full access to this MetalMiner membership content:
    Log In |

Here’s What Happened

    • MetalMiner’s Global Precious MMI took a bit of a dip this month, coming down 1.1% to 83.
    • The sub-index’s value held at 84 in June and May, but on balance, the price drops within the overall basket of metals couldn’t hold the ship steady into this post-Independence Day summer lull.
    • While our U.S. platinum bar price got very close to its 2017 start-of-the-month low (which it hit in January; more on platinum below), U.S. palladium rose 3.8% month-on-month to record its highest price in 34 months — nearly a 3-year high.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

What’s Going On in the Background?

  • Diesel goin’ down? Due to negative sentiment after Dieselgate, as MetalMiner’s Editor at Large Stuart Burns pointed out recently, sales of diesel vehicles in some parts of Europe have taken a dive in the past few months over concerns that “authorities will raise costs or otherwise make living with diesel engines a less attractive proposition for owners.” Overall, total car sales have dropped in some European markets, including the U.K. — but in the spots where they haven’t, gas-powered vehicles have been winning over diesel. In short, not awesome for platinum prices.
  • BEVs are not the panacea. Battery electric vehicles (BEVs) could be the ticket … except that the World Platinum Investment Council forecasts BEVs to make up no more than 5% of the market by 2025, so that wouldn’t work either.
  • Of course, investor demand, jewelry demand and other industrial sectors, such as chemical, all play into it. But “platinum’s fortunes will in part ride on the coattails of the auto industry’s ability to re-establish the diesel engine as an environmentally acceptable propulsion unit,” according to Burns.
  • Meanwhile, as my colleague Fouad Egbaria reported yesterday, gold is now trading on the LME.

What Metal Buyers Should Look Out For

  • The divergence between platinum and palladium prices of late certainly merits attention, and perhaps may drive industrial manufacturers to broader substitution efforts — but that could be a stretch. According to analysts cited by the Financial Times (paywall), “the divergence reflects a number of factors, including speculative demand and several years of production deficits that have eroded stockpiles and reduced available supplies.” The article goes on to say that longer term, “with the increasing popularity of electric vehicles, analysts say this year’s turbocharged run for palladium could be a last hurrah for the material, which has few industrial uses outside of the car industry.”
  • Last month, we wrote that “while we’re unsure of when prices will swing back up, mainly because output cuts in South Africa and elsewhere have seemingly not helped, it may be hard to discount current windows for smaller spot buys.” Fortunately for platinum spot-buyers, this still holds true.

Key Price Movers and Shakers

For full access to this MetalMiner membership content:
Log In |

Join MetalMiner‘s Lisa Reisman, Ecovadis‘ Daniel Perry and Jaggaer‘s Roger Blumberg as they share how to bolster your organization in these times of uncertainty in the following ways:

  • Quickly drawing up a model of a company’s parts and bill of materials to identify areas in need of support and glean insight into the negotiation process
  • Managing the lifecycle relationship of parts, products, and suppliers
  • Reducing risk and improve agility in the MRO supply chain while more reining in small dollar spend

And much more — Join us on June 27th at 12pm EDT/9am PDT for the FREE WEBINAR:

goodluz/Adobe Stock

MetalMiner just reported that the Trump administration, in its efforts to curb imports it maintains are harmful to U.S. industry, may just have injected more volatility into the landscape for domestic manufacturers.

The European Union is worried about a “trade policy readjustment” from President Trump’s team, which could evidently include tariffs placed on the bloc’s metals and materials imported into the U.S.

The Section 232 investigation has mainly put China and its imports into the crosshairs, but now the EU is concerned that these new tariffs would “unjustifiably hit” EU nations, according to Cecilia Malmström, the EU trade commissioner.

What does this mean for U.S. manufacturers — and will events such as this affect how you should be managing your organization’s (and your suppliers’) commodity risk?

Find Out in a Free Webinar Tomorrow

Join MetalMiner‘s Lisa Reisman, Ecovadis‘ Daniel Perry and Jaggaer‘s Roger Blumberg as they share how to bolster your organization in these times of uncertainty in the following ways:

  • Quickly drawing up a model of a company’s parts and bill of materials to identify areas in need of support and glean insight into the negotiation process
  • Managing the lifecycle relationship of parts, products, and suppliers
  • Reducing risk and improve agility in the MRO supply chain while more reining in small dollar spend

And much more — Join us on June 27th at 12pm EDT/9am PDT for the FREE WEBINAR:

 

2017 has seen no shortage of uncertainty when it comes to manufacturing policy.

For example, with the Section 232 investigation is in full swing, other issues remain on deck. From the Dodd-Frank conflict minerals rule getting repealed, to potential changes in visa requirements, the landscape is littered with unpredictable twists and turns.

That’s why getting smart on the following is crucial for your manufacturing organization — not just today, but well into the future:

  • Optimizing supplier management to accommodate new suppliers and streamline complex qualification processes such as PPAP, product testing, and more
  • Quickly drawing up a model of a company’s parts and bill of materials to identify areas in need of support and glean insight into the negotiation process
  • Managing the lifecycle relationship of parts, products, and suppliers
  • Leveraging best-in-class minerals traceability processes and programs to further enhance CSR initiatives
  • Reducing risk and improve agility in the MRO supply chain while more reining in small dollar spend

MetalMiner‘s Lisa Reisman, Ecovadis‘ Daniel Perry and Jaggaer‘s Roger Blumberg are set to share the tools for all of the above, to bolster your organization in these times of uncertainty.

Join us on June 27th at 12pm EDT/9am PDT for the FREE WEBINAR: