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Aluminum Prices

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Nickel Alloy Prices

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Stainless Steel Prices

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Titanium Prices

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Articles on: Metal Prices

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This morning in metals news, raw steel production in the U.S. jumped last week, Century Aluminum was down 10.8% on Monday and nickel prices are aided by steel on Tuesday.

U.S. Raw Steel Production Up 9.7%

Raw steel production was up 9.7% year-over-year for the week ending Nov. 18, according to weekly data from the American Iron and Steel Institute (AISI).

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Domestic raw steel production was 1,745,000 net tons while the capability utilization rate was 74.9%. Production for the week ending Nov. 18 was up 0.3% from the previous week, when production was 1,739,000 net tons and the rate of capability utilization was 74.6%.

Century Aluminum Has a Down Monday

Shares of Century Aluminum closed 10.8% lower on Monday, according to an AP report on Madison.com.

The question is, why?

“Market pundits aren’t entirely certain what to make of this development, noting that aluminum stocks may simply have been shifting away from expensive LME warehouses to cheaper warehouses and other countries,” the report states.

Nickel Prices Get a Boost

Steel-dependent nickel got a boost Tuesday, when prices in the Shanghai and London markets saw a jump, Reuters reported.

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The most-traded nickel contract on the Shanghai Futures Exchange was up 1.3% at 94,710 yuan ($14,285) a ton by 0126 GMT, according to Reuters. Meanwhile, three-month LME nickel rose to $11,677 per ton.

There is widespread agreement and considerable evidence to suggest the global weather patterns of El Niño and La Niña can have a significant impact on commodity prices.

But impacting average temperatures and rainfall as these weather patterns do, the most significant impact is, not surprisingly, on agricultural commodities in the grain sector.

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As Agriweb observes, “Dry weather conditions in the U.S. can threaten the development of corn, soybeans and wheat crops, and dry conditions in Argentina and southern Brazil can impact corn and soybeans.”

El Niño and La Niña broadly act as opposites, reflecting as they do the interaction of large areas of warm water in the Pacific with global weather patterns. We were under the influence of El Niño effects last year, but have recently moved into conditions meeting the La Niña pattern. The La Niña pattern is characterized by a shrinking of a large pool of warm water in the Pacific as a strengthening of westbound trade winds carry warm surface water from the east to west and allow an upwelling of colder waters in eastern regions. The overall temperature of surface water decreases and on the western side of the Pacific the arrival of warmer waters increases rainfall while on the western side cooler temperatures tend to reduce rainfall, resulting in drought conditions. The last La Nina year was 2011-2012 where drought conditions caused a grain prices to surge.

According to the Climate Change Centre, drawing on work by the National Oceanic and Atmospheric Administration (NOAA), NOAA’s National Weather Service, released in a recent report, “El Nino/Southern Oscillation (ENSO) Diagnostic Discussion,” La Niña conditions have a 65-75% chance of prevailing through to the February-April 2018 period.

But what impact can this have on metal markets?

Clearly, mining and metal extraction are less weather-dependent than the growing of crops. However, while a shortage of water for the irrigation of field crops can be dramatic for crop yields, it can also be significant for the generation of hydroelectric power for the mining sector and metal smelting in certain regions of the world.

As the above graph from a University of Sydney School of Economics paper last year illustrates, in La Niña years rainfall can be reduced in areas like the eastern Pacific such as Chile and Peru. The reverse can be the case in southeast Asia and Australia, where excessive rainfall has caused flooding and resulted in supply disruption for mining companies in the iron ore, tin and bauxite markets prompting price rises over short timeframes.

The paper suggests 20-30% of metal price variations at the one-to-two year horizon can be attributed to El Niño/La Niña oscillations.

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As a more frivolous aside, for anyone yet to book their winter ski vacation in North America this year, the developing La Niña would suggest the current outlook favours above-average temperatures and below-median precipitation across the southern tier of the United States, and below-average temperatures and above-median precipitation across the northern tier of the United States.

So, head to the northern Rockies for the snow and colder temperatures.

The contract season has already started and steel prices have yet to react. Although domestic steel prices increased during the last week of October and the first of November, prices fell again last week.

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Source: MetalMiner data from MetalMiner IndX(™)

Steel prices have traded flat for most of 2017. Prices, however, started to weaken during Q3. We still want to see more upward price movements before changing the steel outlook.

Chinese Steel Industry

Of course, Chinese steel prices and production serve as the primary drivers of the world steel industry.

According to data released by the National Bureau of Statistics, Chinese daily steel output decreased by 2.5% in October. Capacity curtailment in the steel industry has finally resulted in less steel output from that market.

Some regions, such as Hebei province, plan to continue the steel capacity cuts until 2020, further reducing production by up to 20 million tons.

Source: MetalMiner data from MetalMiner IndX(™)

The spread between U.S. HRC prices and Chinese HRC prices has fallen again this month.

In addition, all forms of steel in China except CRC saw price declines. Even if the decrease in Chinese prices appears less steep than the U.S. decline, we want to see more price movements to the upside before drawing any conclusions.

What This Means for Industrial Buyers

Steel price dynamics may recover at some point this month. Therefore, buying organizations will want to pay close attention to Chinese price trends and domestic lead times.

To read more about our longer-term steel price trends, download our free Annual Outlook.

To understand how to adapt your buying strategy this season, take a free trial now or subscribe to  the Monthly Outlook for a short-term analysis.

Before we head into the weekend, let’s take a look back at the week that was:

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Free Download: The November 2017 MMI Report

Yes, the aluminum price has fallen back this month.

Yes, it is looking decidedly weak compared to its high point of $2,215 per metric ton earlier this month.

Yes, inventory on the Shanghai Futures Exchange (SHFE) is building rapidly, hitting a record high this week of 666,581 tons, according to Reuters.

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That’s not where we expected aluminum to be back in the summer when the market was talking all about smelter closures in China this winter and supply constraints.

Does that mean the market thinks the constraints are not going to happen? Is this another case of Beijing talking up their policies but failing to enforce them?

Read more

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This morning in metals news, the CEO of Northam Platinum indicated the platinum price is due for upward movement, raw steel production in the U.S. last week was up significantly and Chinese aluminum production was down during October.

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Platinum on the Rise?

As we’ve noted here in recent weeks, palladium has outdone platinum of late — normally, it’s the other way around.

But according to Northam Platinum CEO Paul Dunne, platinum should be on its way back up.

“We have said for a number of years from various public platforms that you would see a phased recovery with palladium running first, then rhodium, and finally platinum,” Dunne said in a report by Mining MX. “Palladium has been off to the races over the past year and the rhodium price has now started to move in recent months rising around 50%.”

Raw Steel Production Up

According to data from the American Iron and Steel Institute (AISI), U.S. raw steel production was up 9.3% for the week ending Nov. 11 compared with the same week last year.

Domestic raw steel production was 1,739,000 net tons for that week, with a capability utilization rate of 74.6%. 

Production for the week ending Nov. 11 was up 1.4% from the previous week, when production was 1,715,000 net tons and the rate of capability utilization was 73.6 percent.

Chinese Aluminum Production Drops in October

Primary aluminum production in China fell 2.3% in October from the previous month, according to a Reuters report citing government data.

Free Download: The November 2017 MMI Report

According to the report, factors contributing to the drop include high costs and the closure of illegal capacity.

Another month has come and gone — now it’s time to take a look back at what’s happened in the world of metals. 

In August, all 10 of our MMIs saw upward movement. That changed the following month, when eight of 10 MMIs fell (albeit several of them fell by small amounts).

For our November MMI (tracking October’s activity), four of the MMIs moved up, five moved down and one held flat (the Automotive MMI).

Hitting some of the high points:

  • It was a big month for stainless steel. The Stainless MMI surged by seven points, hitting 70, up from the October reading of 63.
  • Aluminum also had another strong month, continuing what has been a very strong 2017 for the metal. The Aluminum MMI hit its highest reading, 99, in the history of the MMI series.
  • The doctor was in the house this past month (Dr. Copper, that is). The Copper MMI jumped four points.

You can read about all of the aforementioned — and much more — by downloading the November MMI report below.

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This morning in metals news, Japan’s aluminum industry is considering crafting a set of quality assurance guidelines (on the heels of the Kobe Steel quality data falsification scandal), LME copper move further away from last week’s one-month low and Kobe Steel blames its plant managers for the data scandal.

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Changes to Aluminum Industry in Japan?

On the heels of Kobe Steel’s quality data falsification scandal, many in Japan are asking the same question: how can we prevent the same thing from happening again?

The scandal has rocked Kobe Steel, the third-largest steelmaker in Japan. As a result, the Japanese aluminum industry is considering building a new set of quality assurance guidelines, Reuters reported.

Copper Moves Up

London copper moved up Monday, Reuters reported, powered by strong demand and a lagging U.S. dollar.

Copper moved up 0.7% to $6,832.50 a ton by 0719 GMT, according to the report, up from a one-month low last week of $6,761.50 a ton.

Kobe Steel Plant Managers Get Blame for Scandal

As with any scandal, designation of blame is inevitable — and vis-a-vis Kobe Steel’s quality data falsification scandal, Kobe is blaming its plant managers, according to The New York Times.

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According to an internal company report, plant managers were at the center of the issue — instead of scrapping products that fell below quality guidelines and manufacturing new ones, the plant managers signed off on the sub-standard metal products.

Everything about India’s growth script is gigantic.

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Take the Indian Railways (IR) expansion drive, for example.

The IR a few days ago floated a global tender to procure rails, and, get this – 700,000 metric tons of it.

Two things unique about this development – the quantity and the fact that for the first time the IR has decided to invite private parties to supply the rails.

The Indian government has earmarked about $132 billion to upgrade a creaking network, established when the British ruled India, which includes huge track-laying projects to modernize passenger and freight movement.

So far, the state-run steel supplier Steel Authority of India Limited (SAIL), held a monopoly of supplying rails to IR. But now, with the Ministry going in for a global tender, not only foreign players but even domestic steel companies — such as Jindal Steel & Power Ltd., one of the biggest non-state steelmakers — could benefit.

The additional rail tracks will help the railways towards clearing the track renewal backlog.

Some important notes:

  • Indian Railways is the country’s largest employer with 1.4 million personnel.
  • The carrier has a track length of around 115,000 kilometers, making it the world’s largest railway network under a single management.
  • It runs around 20,849 trains daily and transports 23 million passengers and 3 million tons of freight.
  • It operates 10,773 locomotives, 63,046 coaches and 245,000 wagons.

Going forward, IR is contemplating a mega-renovation in partnership with state and central administrations. The plan includes constructing elevated corridors for Indian cities like Mumbai and Delhi, alongside existing rail tracks, for which a portion of the new rails will be used.

SAIL, according to a report by news agency Reuters, has failed to supply rails to Indian Railways.

India’s steel ministry, said the news report, had asked SAIL to make sure it met its target of 1.14 million tons of supplies in 2017-18. Reuters earlier reported the upgrade for the IR was at risk because of rail shortages from SAIL. Between April and August, SAIL could supply only 70% of its monthly targets set for Indian Railways.

For 2017-18, SAIL has committed to providing only 1.14 million tons, against a requirement for 1.46 million tons.  SAIL, which has posted losses for nine straight quarters, is targeting capacity additions of 2 million tons a year.

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IR expects annual demand for steel rails to rise to 1.5 million tons in the year ending March from about 800,000 tons in the prior 12-month period.

AdobeStock/Stephen Coburn

Before we head into the weekend, let’s take a look back at the week that was.

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

Free Sample Report: Our Annual Metal Buying Outlook