Articles in Category: Manufacturing

I had the pleasure of attending the S&P Global Platts Steel Markets North America conference held recently in Chicago.

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

The general outlook at the conference for steel markets in the year ahead was notably optimistic, although each of the initial speakers differed in who and/or what the audience should pay attention to in the coming months and years.

Conference keynote speaker, Herb Black, CEO of American Iron & Metal Company had his eyes on Turkey and its burgeoning scrap market. Timna Tanners, Managing Director of U.S. Metals and Mining at Bank of America Merrill Lynch, encouraged the audience to focus on China, while Beth Ann Bovino, Chief U.S. Economist for S&P Global Ratings, spoke to present macroeconomic conditions with a watchful eye on the current administration and potential post-election policy changes. Read more

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.

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

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.

Two-Month Trial: Metal Buying Outlook

“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.

A lighted underground tunnel in a nickel mine.

Nickel prices remained steady last week due to a lack of new fundamentals that would drive the commodity either up or down.

According to a recent report from the Economic Calendar, nickel traded on the London Metal Exchange at $10,210 to $10,115 a metric ton with support at $9,860/mt and resistance at $10,735/mt.

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

Leia Toovey, writing for the Economic Calendar, said “Nickel futures experienced upside earlier in the month when Philippine President Rodrigo Duterte threatened to stop all mining in the world’s biggest exporter of nickel. This comes after the Philippines suspended mining activities at numerous nickel mines found to be in violation of environmental regulations.”

Nickel Prices Break Even in Q1

Our own Raul de Frutos recently wrote extensively on the current state of the nickel market, and found that while most industrial metals will finish Q1 2017 on the upside, nickel is one exception.

de Frutos wrote: “The metal has traded up and down to finish the first quarter close to flat. Nickel prices are significantly higher than they were one year ago and traders are now finding little reason to be any more bullish than bearish due to a mix of news that helps both positions.”

He concluded that nickel is in dire need of new fundamental price drivers, positive or negative.

“With all of this uncertainty, industrial buyers might want to wait for new clues before making purchasing decisions,” he wrote.

How will nickel and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:

President Trump will use an executive order today to dismantle the Obama administration’s climate change agenda, according to Environmental Protection Agency Administrator Scott Pruitt.

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The order will compel the EPA to review the Obama administration’s chief climate rule for power plant emissions, the 2015 Clean Power Plan, Pruitt said.

“We’ve made tremendous progress on our environment, and we can be both pro-jobs and pro-environment,” Pruitt told ABC’s George Stephanopoulos on “This Week.” “And the executive order’s going to address the past administration’s effort to kill jobs across this country through the Clean Power Plan.”

The action will order several other federal agencies to undo the Obama administration’s climate change work: It will tell the Interior Department to end a moratorium on new coal leasing on federal land, the official said, and the Obama administration’s assault on methane emissions — outlined in early 2014 and overseen by Interior and EPA — will be ended, too.

Two-Month Trial: Metal Buying Outlook

A major hydraulic fracturing regulation from the Bureau of Land Management will be reviewed under the order. It will also end President Obama’s climate action plan, the main 2013 directive outlining the federal government’s response to climate change.

Following the fortunes of Boeing and Airbus, you could be forgiven for thinking that aircraft manufacturers always run late, over budget, and the resulting end product can struggle to meet initial expectations.

Emrbaer E2

The Embraer E2. Source: Embraer.

But Brazil’s Embraer, the world’s third-largest commercial jet maker, has shown with its next generation narrow body regional aircraft, the E-2 series, that it doesn’t have to be that way. Embraer introduced the aircraft at the Paris Airshow in 2013 and it was first displayed last summer at the Farnborough Airshow just 45 days after its maiden flight. The aircraft is set to be delivered on time, on budget, and even slightly underweight.

Segment Dominance

Embraer has been very successful with their current E-jet series and the new E-2 program looks set to maintain the company’s 55% market share dominance of the regional jet market. The E-2 will commence deliveries in the first half of 2018 and variants will be capable of carrying between 70 and 130 passengers. An FT article notes that Embraer has a backlog of commitments from airlines for 690 E2 aircraft, including firm orders of 275.

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

The company has struck a wide-ranging and exclusive arrangement with Alcoa Corp. for aluminum sheet and plate for the wings, skins and fuselages of the model, with other Alcoa products being used in key applications such as wing ribs, fuselage frames and other structural parts. The long-term collaboration is said by Aluminum Today to be worth $470 million to Alcoa. “PurePower” engines will be supplied by Pratt & Whitney. Read more

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

The head of an Indian zinc company is using the surge in metal prices to the financial benefit of his shareholders in a major way.

According to a recent piece from Bloomberg, Anil Agarwal, the billionaire head of Hindustan Zinc Ltd., is parlaying metal price increases into a $4 billion dividend for shareholders in what is being called a record return for the company.

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

The closest beneficiaries include Vedanta Ltd. (65% ownership) and the Indian government (30% ownership), Bloomberg stated. Hindustan Zinc is the largest zinc producer in India.

“Vedanta continues to be in a very good space given all its verticals are doing well and if they can reduce debt that would be a better ploy and would increase the returns for shareholders,” Sanjiv Bhasin, executive vice president at India Infoline Ltd., told the news source by phone. “Metals, as a proxy to global growth and given the stimulus announced in the U.S., have been the best asset class in the past one year, and it will continue to outperform.”

Zinc Price Rally Amps Up

Our own Raul de Frutos wrote earlier this week that zinc prices climbed the week prior and the metal is now trading near the milestone of $3,000 per metric ton, which is the last time prices have been at this point since September 2007.

de Frutos wrote: “Zinc has doubled in price since it hit bottom in January of last year. As prices climbed, many buyers probably made the mistake of thinking prices were too high, missing this spectacular rally. However, buyers that subscribe to our monthly outlook, didn’t miss this rally. We recommended buying forward starting in April of 2016. Ever since, prices have risen without looking back.”

How will zinc and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:

Macro photo of a piece of lead ore

Lead prices grew 0.7% at the beginning of the week, reaching $2,290 per metric ton, while sister metal zinc rose 0.4% to $2,875 per mt.

This data, reported by Reuters, is trending in line with our own Raul de Frutos’ projections that lead prices will trade at $2,800/mt by the end of the year. The metal has fluctuated fairly wildly over the past several months following a significant run throughout most of 2016.

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

de Frutos stated: “Prices are now back near new highs as bulls seem to be taking control again.”

He added that lead prices are currently holding well and could be ready for another rally, thus the anticipation for a $2,800/mt by the end of 2017.

Lead Prices Still Have a Ways to Go

“Lead treatment charges have plummeted over the past few months. They are currently below $20 per mt, from $80 just three months ago. In this respect, lead is playing catch-up with its cousin zinc, in which the deficit for refined metal is more obvious.”

How will lead and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:

The Architecture Billings Index returned to growth mode in February, after a weak showing in January. An economic indicator of construction activity, the ABI reflects an approximate nine-to-12 month lead time between architecture billings and construction spending.

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

The American Institute of Architects (AIA) reported the February ABI score was 50.7, up from a score of 49.5 in the previous month. This score reflects a minor increase in design services (any score above 50 indicates an increase in billings).

ICE Delays London Gold Price Benchmark

Intercontinental Exchange (ICE) has delayed the launch of clearing for London’s benchmark gold price because not all participants in the auction will be ready, two sources involved in the process told Reuters on Tuesday. The delay could weaken its bid to become the dominant exchange in London’s $5 trillion-a-year bullion market, sources say.

 

Tin cans. Cans are used for packing all sorts of goods – conserved food, chemical products such as paint, etc

Tin prices hit $20,459 a metric ton to begin the week, marking its highest point in nearly two months due in part to concern over shortages on the London Metal Exchange following cancelled warrants.

According to a report from Reuters, those shortages grew to nearly 50% of LME stocks.

Tin has been riding a high wave since January 2016 with global prices for the metal surging by nearly 40% since that time.

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

According to a recent report from The Star Online, Malaysia Smelting Corp is anticipating better performance this year given the continued ascent of tin prices. MSC is the world’s second-biggest tin supplier and is counting on tin price growth, along with a strengthening of the U.S. dollar, to bring substantial improvement to the company’s profit over the course of the coming quarters.

“We will continue to make the necessary strategic decisions and adapt to the ever-changing marketplace,” CEO Datuk Dr. Patrick Yong told the Star.

How will tin and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds: