Logistics

MetalCrawler’s latest news today includes an agreement in the oil strike that’s had managers camping in at a refinery in Toledo, Ohio.

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Low prices and cheap imports have caused a Minnesota iron ore operation to be shut down and Ford Motor Co.’s aluminum-bodied F-150 truck is enjoying sales success.

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Rio Tinto can’t count on aluminum to help it turn a profit. India places tariffs on imports of stainless from China, South Korea and Malaysia. Tepid housing demand in China is what’s caused all of its steel exports in the first place and gold is showing some resiliency.

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MetalCrawler searches the globe far and wide for the latest in metal market news and trends.

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LME Aluminum for three-month delivery has fallen back below the $1,800-per metric ton level from over $2,100 in the third quarter of last year. The prospect of a disorderly unwinding of the stock and financing trade, which, until recently, had locked up large amounts of aluminum in deals, is causing a chilling effect in the entire aluminum market.

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Physical delivery premiums are also falling worldwide. Reuters reports that South Korea’s state stockpiler bought 2,000 mt of aluminum at a premium of $330/mt over LME cash.

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The London Metal Exchange hosted a forum at Chicago’s Virgin Hotel last week and paramount on the minds of attendees was the Exchange’s recent clarification of “load-out” at warehouses, particularly those with long LME aluminum queues. The change was made to prevent the abuse of LME load-in, load-out (LILO) requirements.

The new definition of “load-out,” which went into effect February 1, states that metal must be shipped to a different warehouse operator or to a consumer in the same LME location, or it must physically leave the location altogether. This is to stop the so-called “merry-go-round” deals pioneered by Metro International in Detroit and that have taken hold at the Pacorini Vlissingen (Flushing) warehouse complex in Vlissingen, Netherlands.

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However, certain respondents in the LME’s consultation process indicated that participants would like to be able to temporarily use non-LME, or off-warrant, storage situated in the same warehouse complex, before the metal is loaded out per the revised definition. The LME has agreed to ask the physical market committee it created to address such questions to consider whether such a service could be allowed, while not diluting the protection against potentially abusive behavior provided by the new definition.

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The federal government spent $96 billion on infrastructure projects, according to a Congressional Budget Office report released on Monday.

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The figure, which includes water projects, is dwarfed by a total of $320 billion that was spent on infrastructure by state and local governments, according to the report.

The CBO said 57% of the money that was spent by governmental agencies was used for operating expenses and maintenance of existing infrastructure, while 43% was spent on new construction.

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The Nonresidential Construction Index (NRCI) from FMI Management Consulting climbed two points in Q1 and matched the same period last year.

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This normally is good economic news for US construction, however, construction companies are facing the challenge of not having enough people to keep up with increasing backlogs, warns Phil Warner, head researcher for FMI. A downloadable version of the report is available from FMI.

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The Associated Builders and Contractors’ (ABC) Construction Backlog Indicator (CBI) for the fourth quarter of 2014 declined 0.1 months, or 1%. Despite the quarter-over-quarter decline, the backlog ended the year at 8.7 months, which is still 4.4% higher than 2013’s.

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“Inconsistent growth in the volume of public work continues to suppress the pace of nonresidential construction; however, private construction momentum continues to build,” said ABC Chief Economist Anirban Basu. “With hotel occupancy rising, office vacancy falling and demand for data climbing exponentially, a number of key private segments are positioned for rapid growth in construction spending this year. There are a number of factors that are likely to be beneficial to nonresidential contractors in 2015,” Basu said.

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Following a nine-month stretch of positive billings, the American Institute of Architects‘ Architecture Billings Index (ABI) showed no increase in design activity in January.

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The January ABI score was 49.9, down from a mark of 52.7 in December.

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The American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) the U.S. Green Building Council, and the Illuminating Engineering Society are considering the developing biomass requirements for inclusion in their new, co-sponsored green building standard.

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Prior to the current biomass debate, the USGBC had a years-long internal feud over the use of wood as a building material and which organizations could certify wood as “sustainable” for LEED projects.

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