Articles in Category: Company News

Ford Motor Company will invest $1 billion to upgrade and expand capacity at two assembly plants and $200 million to build a data center in Michigan. President Trump praised the move, which was part of a 2015 negotiation between the company and the auto union.

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The investments represent two strategies going forward: a traditional game plan that looks to create new models of high-demand trucks and SUVs; and a more forward-looking investment in the self-driving and connected vehicles that Ford and other companies are betting will drive the future.

Oil Traders Expect OPEC Cuts to Continue

Major oil traders gathered in Switzerland this week said they expected Organization of Petroleum Exporting Countries and non-OPEC producer-nations to extend their pact to curb output in the second half of this year, providing that main non-OPEC producer-nation Russia complies.

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“I think the surprise so far this year is how quickly shale came back on a relatively modest price rebound,” Gunvor CEO Torbjorn Tornqvist told a panel at the FT Commodities Global Summit in Lausanne.

NioCorp Developments Ltd. has successfully produced high-purity 99.9% commercial grade Scandium Trioxide from its Elk Creek, Ne., Superalloy Materials Project and the company has finalized plans for a proposed scandium purification circuit there.

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Niocorp also announced that it anticipates public release of the results of its Elk Creek Feasibility Study in the second calendar quarter of 2017. Following the release of the study, the company intends to intensify efforts to secure government permits and obtain project financing to prepare for the launch of construction operations in Nebraska.

NioCorp’s successful production of a high-purity commercial grade scandium, an element used to make superstrong and light alloys used in both the automotive and aerospace industries, was conducted at SGS Mineral Services lab in Lakefield, Ont., Canada. This is a major milestone in Niocorp’s plans to become one of the world’s largest producers of the high-value metal. A 99.9% purity level, otherwise known as 3Ns or “three nines” scandium, meets or exceeds the purity needed for the additive’s use in virtually all of its mainstream commercial applications, including ultra-high-performance aluminum-scandium alloys for the aerospace and automotive industries, in the solid oxide fuel cell industry, and in other defense and non-defense applications.

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NioCorp said in a news release that the test showed its scandium product meets or exceeds the purity specifications of all potential customers with whom it has been in discussions.

OPEC Output Cut Threatened: Saudi Arabia Demands Iranian Cut

Saudi Arabia may demand that Iran, which is allowed a slight rise in output under the Organization of Petroleum Exporting Countries’ deal with member-states and non-members such as Russia, commit to an output reduction as a condition of continuing the cuts, people familiar with the kingdom’s thinking told S&P Global Platts.

We had a chance to sit down and discuss the issues facing members of the Steel Manufacturers Association with SMA President Philip K. Bell at the recent S&P Global Platts Steel Markets North America conference here in Chicago. Bell also currently serves on the  Department of Commerce International Trade Advisory Committee on Steel (ITAC 12), advising the Secretary of Commerce and United States Trade Representative on trade policy, trade agreements, and other trade related matters that benefit U.S. businesses, workers, and the economy.

Philip K. Bell

Philip K. Bell. Source: SMA

Jeff Yoders: We’ve heard a lot about North American Free Trade Agreement and what changes to it might mean in the last two days. How do your members feel about reopening NAFTA to changes?

Philip K. Bell: NAFTA is over 20 years old and it’s probably time to look at it again. A lot has changed over the last two decades. We hope the approach that the administration takes is one that’s more methodical and takes into account that not only are Canada and Mexico two of our biggest trade partners but, when it comes to the steel industry, they ARE our two largest trade partners.

There is a lot of integration in this area. You have a lot of steel producers that either have businesses in Mexico such as Gerdau, ArcelorMittal and Nucor — through its joint venture JFE — and you have a lot of companies that want to do business there like Steel Dynamics which is hoping to increase its presence in that market by importing flat-rolled into Mexico. Read more

Indian billionaire Anil Agarwal’s audacious purchase of 13% of mining giant Anglo American PLC  took the stock markets by surprise last week. But Agarwal, chairman of London-listed Vedanta Resources is known for his bold and sometimes seemingly counter-intuitive acquisitions.

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Agarwal has bought the shares in the name of his family trust Volcan, saying it is just an investment in a “great company with excellent assets,” stating that he had no immediate plans to launch a takeover, according to the Financial Times.

No one believes him, of course, or at least not the part about it just being an investment in a great company with excellent assets. True, the prospect of Agarwal’s Vedanta with a market cap of $2.99 billion, being able to takeover Anglo-American with a market cap of  $20.84 billion (£16.7 billion) is verging on the absurd, but the truth is Agarwal is probably more interested in a seat on the board and the opportunity to influence Anglo-American’s future in South Africa than seriously taking over a group that is seven times the size of his own.

Source: Financial Times

Anglo-American has made no secret of its desire to divest some of its more troublesome South African investments.

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The political instability and red tape in South Africa has caused the miner problems in recent years and Anglo has already sold two assets to Vedanta including the Gamsberg zinc project in the Northern Cape which Vedanta should bring to production next year. Read more

Late last week, Indian media was rife with reports of Vedanta Resources PLC Chairman Anil Agarwal making a “surprise” bid for about 13% of mining giant Anglo American PLC for $2.4 billion, even as the British newspapers headlined the development as a “raid.” Anglo American owns De Beers, one of the world’s largest diamond exploration and mining companies.

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The move to acquire the shares was made through Agarwal’s personal investment firm Volcan Investments in London.

Here’s the lowdown on Anglo American: The U.K.-headquartered Group, with operations in South Africa, North and South America, Asia and Europe, has revenue of $23 billion, EBITDA (earnings before interest, tax, depreciation and amortization) amount to $6.1 billion, and it has a market value of over $20 billion. In addition to diamonds, Anglo is a global player in platinum and base metals and minerals — it mines copper, nickel, niobium and phosphates. It also sells commodities such as iron ore and manganese, metallurgical coal and thermal coal.

When the 13% shares are acquired, Agarwal’s Volcan will be the second-biggest shareholder after the South African Government investment firm Public Investment Corp., which owns 14%. Volcan, said news reports. Volcan intends to finance the investment through mandatory exchangeable bonds. Led by JPMorgan Chase & Co., the bond sale will take place on or around April 11, the closing date.

Agarwal is the founder of Vedanta but he said he doesn’t intend to make a takeover offer for Anglo American, though a merger between the two failed last year. Incidentally, in 2010, Vedanta acquired Anglo American’s portfolio of zinc assets in Namibia, South Africa and Ireland.

Agarwal told the Sunday Times that he “liked” Anglo’s entire balanced portfolio, both in South Africa and elsewhere.

Some years ago, through his entities, Agarwal had also signed an agreement with the South African government for sharing mining technology.

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He said he would be “fully supportive of the board, management and strategy”.

Metal trader turned mining tycoon Agarwal started as a scrap dealer way back in 1975, and his has been a rags to riches story so far but we’ll have to wait and see if his interest in Anglo American is more than just that of a minority investor.

Chinese steel exports tumbled to a three-year low in February, customs data showed last week, lower than expectations, as steelmakers in the world’s top producer shifted to meeting rising demand at home.

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Shipments for the month were 5.75 million metric tons, the lowest since February 2014, data from the General Administration of Customs showed. It was down 29.1% from a year ago and down 22.5% from January.

Duterte Wants Mining Compromise

Philippine President Rodrigo Duterte said recently he hopes there will be a “happy compromise” between the mining industry and protecting the environment, throwing support to Environment and Natural Resources Secretary Regina Lopez will appear before Congress ahead of her confirmation hearing. Lopez is under pressure because she has closed nearly half the nation’s mines.

For an industry that has for decades been criticized by environmental groups as the root of all evil it is ironic that oil and gas producers are aligned in championing carbon capture with such enthusiasm.

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The fossil fuel industry is at the forefront of lobbying for radical changes in public policy into research to cut the costs of extracting CO2 from hydrocarbon energy. Industry leaders like Bob Dudley from BP are quoted in the Telegraph as saying, “we can’t just keep our heads in the sand”.

The reality is the hydrocarbon industry has seen the writing on the wall. Public attitudes are hardening, aided by worries about particulate emissions from diesel cars and air pollution in major cities from Beijing to Delhi and even in western capitals like London. The industry is under huge pressure from sovereign wealth funds, pension funds and activist shareholders to find long-term solutions to the carbon question and thwart claims that hydrocarbons are our sunset energy source. Read more

This week, metals manufacturers, construction and automotive companies and even the Federal Reserve expressed optimism about the strong economy we’ve seen since the election of President Donald Trump.

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We love economic optimism as much as the next metals intelligence and price data service, but count us among the many who wonder if all these happy thoughts are based on real world data or just, well, feelings?

When Can We Get an Actual Bill?

We kind of expected to have at least something concrete (pun intended) out of the administration on infrastructure by now but even the most optimistic among us concede that an infrastructure bill might not even happen this year with a healthcare repeal currently sucking up all the oxygen in Washington and tax reform, supposedly, the next big hurdle.

The Fed raised interest rates a quarter-point this week and hinted at more rate increases later in the year, pointing to strong jobs and manufacturing data but the tax cut the administration promised looks like it will only happen after the Summer, if at all, this year.

Automakers got some good news this week in the form of a promised review of corporate average fuel economy emissions standards that the industry says will hurt sales and production by the time they’re fully implemented between 2022 and 2025, but the actual rules haven’t changed yet and no one knows what the final review will keep or cut.

All of this begs the question: Are we being too optimistic?

TIGERs Ensnared

While Trump’s budget blueprint cut construction TIGER grants that fund many transportation projects, including the New York-New Jersey Gateway, it did allocate $2 billion toward the design and construction of a  wall between the U.S. and Mexico. That’s not what many construction companies were planning on hearing.

“Looked at in the absence of any broader infrastructure plan, it is hard not to view proposals to eliminate programs like the TIGER grants and wonder how such cuts are consistent with the President’s oft-repeated pledge to invest in infrastructure,” the Associated General Contractors of America Executive Director of Public Affairs Brian Turmail said.

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We, too, would like to see the text of actual infrastructure and tax reduction bills from the administration before we predict continued economic growth or even a continuation of the metals bull market. Or at least a working framework. With the pace in Washington, many of the president’s priorities are going to have to move to year two and delays beyond that would further threaten action in this term.

If you can’t beat them, then join them? That may be the gist of UC Rusal’s latest proposal for dealing with Chinese aluminum overproduction: an OPEC-like organization for the global aluminum industry.

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In a Reuters article the world’s largest aluminiu producer outside of China was quoted by the TASS news agency at an economic conference in Russia’s Black Sea resort of Sochi as suggesting that Industry ministers should get together and explore ways and means of creating a producers club.

Liquid metal

The Chinese aluminum industry has been able to cut costs by essentially selling liquid metal to nearby product manufacturers. Source: Adobe Stock/Kybele.

The trade minister quoted by TASS, Denis Manturov, talked of creating a single policy in the area of standards and technology but, in reality, there would be little to be gained if that was the sole purpose. More attractive to western smelters in general, and Rusal in particular, would be any mechanism that curbed China’s growing dominance of the primary aluminum market.

Rusal was, until a few years ago the world’s largest aluminum producer. In 2016 Rusal produced 3.685 million metric tons, according to Reuters, but China now produces over half the world’s aluminum with Chinese producers overtaking the Russian firm. China’s Hongqiao is now the world’s biggest aluminum producer overtaking Rusal in 2015 and again in 2016. Read more

More and more Indian companies, including steelmakers such as Tata and Essar Steel, are entering the defense manufacturing sector. Essar Steel, for example, recently announced a game plan to develop steel grades for land and naval defense applications.

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Essar Steel made a low key entry into the sector about five years ago, but it’s now turned bullish on defense because of the increased marketability of its products. Essar’s products include an indigenous armor plate for ballistic protection. Some of its products are innovative while others are simple substitutes for imports for India’s native contractors looking to keep more of their supply chains close to home. The latter have been used in the construction of naval destroyers, offshore patrol vessels and floating docks. Other products are used in the construction of Coast Guard vessels, so also the repair of naval ships.

In land defense, Essar Steel’s products are used in battle tanks, the motor casings of missiles, combat vehicles, and artillery guns. Read more