Author Archives: Taras Berezowsky

china shipping port title

Whether you’re a regular MetalMiner reader, or have never heard of us before, you’re likely familiar with the outsize role China has played in trading with the Western world — and especially with the United States.

That’s why we’ve taken the opportunity to dive deep on a nuanced issue that’s central to the U.S.-China relationship, now and into the future. Our new project, China vs. the World: Why the Battle for New Trade Status is Such a Huge Deal, explores how China’s approach to global trade over the past several decades has affected American commerce (for better and worse), and how something called “market economy status” could change the rules of the game as we know it.

In the latest move, U.S. Representatives Tim Murphy (R-PA) and Peter J. Visclosky (D-IN), the chairman and vice-chairman of the Congressional Steel Caucus, respectively, introduced a House resolution calling on the current Administration to take action on this very issue. But resolving the issue will likely be a longer battle.

While the mainstream media has taken advantage of reporting presidential hopeful Donald Trump’s numerous references to China and his blunt stance on how he intends to change our relationship with that country, MetalMiner’s journalists and editors set out to unpack the tangible drivers behind these types of general sentiments, with a particular focus on — and for — U.S. manufacturing organizations.

Among the highlights:

  • The most comprehensive — yet easily understandable — exploration of what “market economy status” (MES) entails, why China is pushing the U.S. and Europe to grant the country MES, and what that would mean for trade, available today.
  • Our explainer video provides a quick ‘101’ on the topic, and an interactive timeline explores how China got from the dawn of Mao to WTO entry to today, step by step.
  • Personal video perspectives from key players across several different industries illustrate the China effect on American jobs, workers and approaches to business.

We hope you’ll find this type of project and its presentation refreshing and informative. If you like it, please share it with your networks! We welcome and value your feedback, so please feel free to send us a note at research@metalminer.com.

Thank you for reading,

Taras Berezowsky
Managing Editor

SSAB released a new high-temperature steel in its Hardox line, well suited to abrasive conditions in hot environments, back in April.

But evidently they REALLY want buyers and manufacturers to know about it, as their message hit the wires again today.

According to SSAB Product Manager Jenny Brandberg Hurtig, Hardox HiTemp wear plate’s “high temperature performance is achieved by using high-quality raw material in combination with a carefully controlled manufacturing process.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

Hardox HiTemp can be cut, welded, machined and cold formed by the same kind of workshop machinery and technology as other Hardox grades and conventional steel.

All this adds up to making Hardox HiTemp an ideal choice for high temperature wear applications in many areas—particularly in process industries such as steel, cement and coal power plants, and recycling and asphalt industries.”

AEC Ups the Fight vs. China Aluminum Subsidies

Read more

Our Global Precious Metals MMI took a slight step backward this September, coming in at a value of 85 — a 4.5% drop from the previous month’s 89.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

However, the latter half of the summer has been kind to the gold, silver, platinum and palladium prices we track, with the past three months representing the highest MMI values of the entire calendar year.

Global-Precious-Metals_Chart_September-2016_FNL

All four precious categories tracked by the MetalMiner IndX softened over the month of August for our September 1 reading, contributing to the overall 4-point decline.

Main Index Drivers: Platinum and Palladium Prices

In a forthcoming MetalMiner analysis, my colleague Stuart Burns will share his findings from interviewing Trevor Raymond, director of research at the World Platinum Investment Council. The main takeaway? That the platinum market is like a “ticking time bomb.”

Two-Month Trial: Metal Buying Outlook

Essentially, the global platinum market has been in deficit for five years running, with mine strikes and shortfalls leading the way into a supply-side headache for the industry. Demand, meanwhile, appears robust, according to WPIC’s data and quarterly reports, led by developments on the heels of Volkswagen‘s diesel scandal, China and India’s jewelry desires, and a potentially interesting knock-on effect from rising oil prices.

However, the investment community will likely be the prime driver of PGM price movements in the future; but whether it’s a chicken-and-egg situation — rising prices spurring investment activity, or vice versa — remains to be seen.

Secondary Driver: Gold Prices

According to a recent release by Sprott Asset Management, “August marked the fourth successive month that gold prices rose in contrast to the dollar — something that has not occurred since metal peaked five years ago amidst the global financial crisis.

Demand is now at a four-year high with metal displaying one of its best yearly performances since the 1970s. Due to the rise of negative interest rates and a more volatile market, gold is looking like a safe bet for many investors,” right alongside platinum, it would seem; with a secondary positive aspect of the latter being its industrial element.

“As a result of sluggish global economic growth, central banks are pushing interest rates into negative territory, which is positive for gold,” according to Senior Portfolio Manager Paul Wong, along with the Sprott Asset Management precious metals team. “We are likely in the early stages of the current gold bull market, driven by a global push to a negative interest rate policy, currency volatility and a high level of cross-asset class correlation.”

My colleague and our in-house metals procurement specialist and analyst, Raul de Frutos, agrees — see his most recent report on the gold market.

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

MetalMiner’s index of global precious metals prices notched the second-largest move for August in our Monthly MMI series, behind only the Stainless MMI.

Global-Precious-Metals_Chart_August-2016_FNL

The Global Precious MMI rose 7.2%, from 83 to 89, between July and August. Gold prices again drove the move, with U.S. bullion logging its second straight month above the $1,300 per ounce threshold; however, the U.S. palladium price experienced a significant jump, rising 18.4% over the month.

Palladium on a Bullish Rebound

After hitting multiyear lows at the beginning of 2016, palladium has begun a slow down but its long-term ascent is still acting rather bullish.

Two-Month Trial: Metal Buying Outlook

The PGM has been making higher highs and lower lows since January, and hit above $700 per ounce at the beginning of August.

palladium historical price chart 2016

Why?

Looks like investors have been giving palladium and its cousin platinum some more love.

Analysts at INTL FC Stone and Citi Research have said recently that they think investors have taken some of the money they’ve been putting behind gold and spreading it to the PGMs, according to the WSJ.

Back to Gold

While U.S. gold prices have hovered recently, they are still far ahead of their pre-Brexit levels. The Federal Reserve‘s dovishness has not given investors any reason to abandon their investments in gold, or silver for that matter.

Core Consultants Group opined recently that gold broke through a psychologically important barrier of when it crossed $1,300/ounce and is still finding overall bidding interest despite the slight declines in the price during the last few weeks.

Free Download: The July 2016 MMI Report

We, too, can’t see gold’s recent increases being pushed back, or even tempered, by anything other than significant interest rate increases by the Fed. The type of radical action that the central bank has shown no stomach for, lately, despite recent comments that it won’t rule out increasing rates this year.

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

Every single price point across the precious metals tracked by the MetalMiner IndX — gold, silver, platinum and palladium — increased over the month of June, helped mainly along by the boon that Brexit has been (for precious producers, anyway…more on that below).

Two-Month Trial: Metal Buying Outlook

As a result, our monthly Global Precious MMI for July shot up 8% to 83, the index’s highest value since June 2015.

black and gold precious metals price index chart

Exit Britain, Enter Gold Price Increases

Britain’s vote to exit the E.U. left the pound Sterling in turmoil, with the British currency recently troughing at a new 30-year low, with no end to the bleeding in sight, while the Euro has also suffered. We all know what that means: investors flocking to safe-haven assets, such as gold. Which, in turn, means producers will be able to justify keeping near-to-medium-term mine production levels and exploration status quo (at least).

The U.S. bullion price of the yellow metal jumped 8.7% month over month, a significant increase. (Correspondingly, US silver bars shot up 17.2%.) Just after the Brexit vote results came in, HSBC analysts predicted that gold will breach $1,400 per ounce. It has already been flirting with the high $1,300s the past couple weeks and, according to HSBC Chief Precious Metals Analyst James Steel, “the drive higher may be more than 10% in the longer term if there were to be broader concerns about the future direction of the E.U. after the vote,” as originally reported by Kitco News.

Investors Go Long

Adding more fuel to that fire, hedge funders increased their net long positions in COMEX gold and silver contracts to record highs by the end of last week, further showing their bullishness in the safe-haven asset, according to Reuters.

Another major driver of the gold price has been the U.S. bond market. As my colleague Raul de Frutos has written, treasury prices soared and yields plunged to four-year lows as investors continued to seek haven assets. The benchmark 10-year Treasury yield fell as low as 1.45% two weeks ago, the lowest level in four years. Bond yields not only fell in the U.S.; British 10-year government bond yields sank below 1% on Monday for the first time ever. Similarly, Japanese bond yields fell below 0.1% for the first time, reflecting unprecedented long-term pessimism.

The lower the yield, the lower the returns investors get from their bonds. That’s important, because in periods where yields are near zero, many investors prefer to buy gold rather than bonds. In this manner, in the current stock market turmoil, part of the money that would normally go to assets paying a yield is going to gold instead.

Negative interest rates worldwide also help gold’s case.

Big M&A News: Centerra Gold + Thompson Creek Metals

All this Brexiting has prepped large Canadian miner Centerra Gold to pull the trigger on acquiring Thompson Creek Metals last Tuesday, based in Denver, as reported by Reuters.

The price tag: $1.1 billion, including debt.

Compare Prices With The June 2016 MMI Report

The main reason: Centerra owns and operates its main asset, the Kumtor gold mine, in Kyrgyzstan, and seeing as how the Asian nation wants a bigger cut of Centerra’s pie lately, the Canadian miner wants to reduce its exposure in Asia while boosting its footprint in North America.

With the recent upsurge in gold prices, times for miners such as Centerra are looking quite rosy.

For full access to this MetalMiner membership content:
Log In |
Source: Adobe Stock/ epitavi

Source: Adobe Stock/ epitavi

Copper metal is continuing to pile up in warehouses and Chinese overstock may be making its way into London Metal Exchange warehouses all over Asia as the price has dipped to historic lows.

According to the Financial Times, “LME copper stocks have surged by almost 40% this month – or 50,000 metric tons – spooking investors already concerned about flagging demand for the metal and plentiful supplies.”

“One theory doing the rounds,” according to the paper, “is that a major metals trader is moving copper that had been sitting in China – the world’s largest consumer of copper – to LME warehouses in Singapore, Malaysia, Taiwan and South Korea where financial incentives are being offered to store metal.”

Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Sign up for your free trial to our monthly buying outlook reports!

According to this month’s Copper MMI analysis, Raul de Frutos and Jeff Yoders agree that supply-side issues, such as overproduction, are seminal.

“Investors are simply not excited enough to trigger a bull run in copper prices,” they write. “The Copper MMI fell 5% last month as overcapacity still plagued the red metal. Rather than cut capacity, Rio Tinto Group approved a $5.3 billion expansion to more than double output at the Oyu Tolgoi copper mine in Mongolia, making it one of the world’s largest copper mines.

“Rio is also expanding its iron ore efforts. Even though almost everyone seems to agree that the market is oversupplied, copper producers are still quite optimistic on the long-term picture and are expanding rather than curtailing production,” according to their analysis.

You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. Check it out to receive short- and long-term buying strategies with specific price thresholds.

Shiny aluminum ingots with a crane in the background while a plane is flying overAs aluminum prices have whittled away their May gains by the beginning of June, news from a Goldman Sachs report indicates Chinese aluminum output is about to get ramped up again.

Bloomberg recently reported that “with most producers in the world’s largest supplier [China] posting solid margins, output growth will accelerate to 4% year-on-year in the second half after contracting 1.7% in the first four months,” according to a Goldman report released Monday.

As capacity fires back up, “the bank sees prices dropping to $1,450 a metric ton in three months, $1,400 in six months and to $1,350 in a year, reiterating previous forecasts.”

However, we take some other factors into consideration.

Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Sign up for your free trial to our monthly buying outlook reports!

As my colleagues Raul de Frutos and Jeff Yoders have noted earlier this month, China exported 400,000 mt of unwrought aluminum back in April. This represents a year-over-year decline of 7.8%, supporting the argument that domestic demand has picked up there thanks to the stimulus effect. However, how robust and for how long that uptick is likely to last is extremely difficult to tell.

The sustainability of aluminum prices will still depend on this fluctuation in Chinese aluminum production and on how much China can inflate aluminum demand through further stimulus measures. Both factors remain quite uncertain at the moment.

You can find a more in-depth aluminum price forecast and outlook in our brand new Monthly Metal Buying Outlook report. Check it out to receive short- and long-term buying strategies with specific price thresholds.

The world may have never encountered a more crucial Year of the Monkey than 2016.

That is, at least as far as global trade between China and the Western world is concerned. At the end of this year, China believes it ought to receive Market Economy Status (MES). This would allow China to enjoy the same market status as the U.S. and European Union when it comes to anti-dumping investigations before the World Trade Organization.

Recently, China’s Ministry of Commerce responded to questions from the Financial Times with this: “China is firmly against any misinterpretation or delay in performance of the [WTO] clause [that “automatically” grants China MES on December 11, 2016]. We call on members, such as the U.S. and E.U., to take necessary measures as soon as possible in order to ensure ending the [current methodology used in anti-dumping cases] before the due time.”

However, since China’s economy — and the role of its government within it — operates differently than much of the rest of the world, that country is effectively able to export and offer its products much more cheaply to many of its trading partners. Depending on the circumstances, this has spurred allegations of “dumping” over the past several decades, and has now come to a head.

Currently, China is considered a ‘non-market economy’ under WTO rules. Achieving market economy status would ultimately put China on the same level as the U.S. and E.U. in the eyes of the WTO, taking what some already consider a global trade war to new heights.

For a more in-depth investigation of the criteria China must fulfill to achieve MES, and what it could mean for its Western trading partners, start here.

Two-Month Trial: Metal Buying Outlook

US Steel plant in Granite City wide

The U.S. Steel Granite City Works captured by Google Street View in September, 2014 — a year and two months before the latest idling of the mill.

See the latest multimedia version of this story here.

Dan Simmons has seen a lot during the 38 years he’s worked at U.S. Steel’s Granite City Works in Illinois, just outside St. Louis.

From starting out as a general laborer, to swinging hammers on the track gang, to “feeling like Mr. Haney from Green Acres” while trucking around the mill, Simmons took it all in. There were days “you were whistling when you came in, and whistling when you left,” he said.

But nothing compares to what he’s seeing now.

“I have grown men coming into my office, crying,” said Simmons. “You see the pain, the ‘what ifs,’ the blank stares…”

Simmons, who just turned 56, is now the president of the United Steelworkers Local 1899, and some of the grown men coming to him are pipefitters just like he had become during his long tenure, which began in 1978.

However, those men and women aren’t coming to him because they’ve been hurt on the job. They are coming to plead for help, because they have lost their jobs, and in many cases still don’t know when they’ll land their next one.

Cyclicality in steel production is nothing new, but it wasn’t until 2008 — when the global markets began crashing — that USS Granite City Works endured its first indefinite idling in its history.

“We had the unemployment office cycling 400 people through at a time,” Simmons told MetalMiner. “The biggest fear is not knowing. If I could have given them a definitive timeframe, they would’ve said, ‘OK, I can handle that.’ But after two to three months, people come to me and don’t know what to do with themselves.”

And now, after the mill went idle a second time in December 2015, some of those workers have been without a job for nearly half a year. Last December, 1,500 people were laid off — 75% of the mill’s total workforce. Across the country, a total of 13,500 steel workers have been laid off over the past year.

Simmons knows what it’s like to feel that fear firsthand. “I got a brother that works here, a brother-in-law that works here, so it’s personal. You worry about where your whole family will be.”

So what’s different today, compared to 2008?

For Simmons and scores of others in the country’s steel sector and other manufacturing industries, much of the pain can be traced back to one main source: China.

A History of Unfair Trade?

The world may have never encountered a more crucial Year of the Monkey than 2016.

That is, at least as far as global trade between China and the Western world is concerned. At the end of this year, China believes it ought to receive Market Economy Status (MES). This would allow China to enjoy the same market status as the U.S. and European Union when it comes to anti-dumping investigations before the World Trade Organization.

In its quest to grow its economy over the past two decades, China has become the leading producer — by far — of steel, aluminum, cement and other industrial materials. Read more

Simply looking down the list of prices contained within our Global Precious Metals MMI, the biggest story may appear to be gold’s significant increase over the past month. (Overall, the MMI reading for March reached a high we haven’t seen since last November: 77.) However, the focus should – and will – be on another precious category with greater industrial implications.

First, on the gold front…

US Gold Price Shoots Up – Why?

With China’s stock market turmoil of late, many investors turned to gold as the classic safe-haven commodity. Of course, now that the stock market in China has stabilized, the “damage” has been done, with the US gold bullion price on the MetalMiner IndX having increased nearly 15% since the beginning of February.

Global-Precious-Metals_Chart_March-2016_FNL

The US dollar has also taken a break from the tear it’s been on lately and weakened in January, which allowed gold — and other commodity metal — prices to rise.

The Main Story: Platinum

Speaking of investors and gold, back to the main event: platinum.

Editor at large Stuart Burns recently spoke with Trevor Raymond, the director of research at the World Platinum Investment Council in London about the firm’s sixth quarterly report on the platinum market, and subsequently analyzing the metal’s outlook based on the report’s contents.

But there are two interesting takeaways in particular from Stuart’s analysis, both relating to investment and gold.

#1 Investment-Grade Bars and Coins

While total global demand increased to 8,205,000 ounces as stronger automotive, industrial and investment demand more than offset a dip in jewelry demand from China (and demand again exceeded global supply in 2015 by some 380,000 ounces), bars and coins represented the most significant single uptick.

Free Sample Report: Our March Metal Buying Outlook

“Demand for physical coins and bars rose from 50,000 ounces in 2014 to 480,000 ounces in 2015, contributing to a net gain for investment of 73% from one year to the next,” Stuart writes. Wow. While WPIC doesn’t expect this gangbusters rate to continue in 2016, retail investment will still figure prominently in how the metal behaves.

#2 Relationship Between Platinum and Gold Price

And we finally circle back to gold…here’s quite a nugget:

“The platinum price has only four times previously — over the last forty years — been at a discount to gold for a sustained period. In all previous cases, the price has recovered strongly in the subsequent year. We have no axe to grind one way or another, but we do wonder — with supply constrained and the market in widely acknowledged and persistent deficit and demand from a number of sectors remaining robust — is this discount likely to prevail?”

Read Stuart’s full analysis of the WPIC report.

This Month’s Key Precious Metal Prices

US platinum bar prices bumped up 8.4% – but this was the 14th straight month of that metal being at a discount to gold.
For exact pricing, log in or sign up to become a MetalMiner member!

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