Product Developments

A giant robot fight will happen sometime next year. MegaBot MKII from the US will square off against Japan’s Kuratas.

I won’t try and justify this by the metal content — which is interesting in its own right — or by the turn of fortunes that has been created by taking an old repair shop for cargo ships and turning into a new industrial enterprise, admirable as that is, no this posts stands on its own two mechanical feet as pure fun.

Free Download: July Metal Price Forecast

The robot constructors of the American entry are three engineers who basically wanted to live out their childhood fantasies and build a fighting robot. Weighing in at 12,000 lbs. and measuring some 15-ft. tall the MegaBot MKII is everything a child could imagine and more.

{ 0 comments }

We have often noted the funny ways metals are marketed in the overall media here at MetalMiner. Whether it’s steel being touted for its strength, while alloyed with titanium, or zinc being used to galvanize rods in environments where galvanizing won’t help, the the images of strength, resiliency and luxury certain metals hold benefit the sector as a whole.

{ 0 comments }

A major miner announced more layoffs and steel imports were down this month, according to preliminary data.

Anglo-American Layoffs

Global mining company Anglo-American PLC said on Friday it will shed thousands of jobs in the next couple of years and might put up more assets for sale as it battles an accelerating slump in metals prices that has dragged its shares down to a 13-year low.

Three Best Practices for Buying Commodities

The company posted a steep fall in first-half profit after a rout in prices of metals from platinum to iron ore, and said the next six months could be even worse. Anglo-American is the fifth-biggest diversified global mining group by stock market capitalization. The statement said it would cut about 6,000 of its almost 13,000 office-based and other non-production roles globally, 2,000 of which will be transferred through the sale of some assets.

Steel Imports Starting to Fall

Based on preliminary Census Bureau data, the American Iron and Steel Institute (AISI) reported recently that the US imported a total of 3,049,000 net tons (NT) of steel in June 2015, including 2,458,000 NT of finished steel (down 10.3% and 10.7%, respectively, vs. May final data). Year-to-date total and finished steel imports are 21,670,000 and 17,833,000 NT, respectively, up 3% and 14% respectively, vs. the same period in 2014.

Free Download: July Metal Price Forecast

{ 0 comments }

In metal news today, Molycorp, Inc. is sitting a little bit prettier in its chapter 11 reorganization and South Africa’s Lonmin PLC is warning that layoffs could come from mine closures soon.

Molycorp Secures Financing

Molycorp, Inc., the only US-based producer of rare earth minerals, recently moved forward with its chapter 11 bankruptcy reorganization process and received court approval for an improved debtor-in-possession financing package provided by Oaktree Capital Management LP.

Three Best Practices for Buying Commodities

The approved DIP facility of new net financing of $130 million. Molycorp said the new funding will include additional liquidity, reduced costs, and additional time to develop a plan of reorganization that would be in the best interest of all parties.

Lonmin Warns of Layoffs

South African platinum producer Lonmin said on Friday it was planning to close or mothball several mine shafts, putting 6,000 South African jobs at risk, because of depressed metal prices. Platinum’s spot price is at 6-1/2 year lows less than $1,000 an ounce, while power and labour costs in South Africa have risen sharply.
Free Download: July Metal Price Forecast

{ 0 comments }

The US stock market is demonstrating resilience against economic worries such as the Greek Crisis, falling oil prices, weakness in emerging markets and the recent Chinese market sell-off.

Free Download: July Metal Price Forecast

Some argue that the bull market has already run for too long, and that concerns outside the US are putting enough pressure to make the stock market tumble. However, the opposite might be true.

The Tenacity of the US Stock Market

The unwillingness of domestic stocks to fall is a sign of strength and we could see stocks rise even further, especially if things start to calm down globally.

Dow Jones Industrial Average Index 1 year out

Dow Jones Industrial Average Index, one year out. Graph: MetalMiner.

Major market indexes like the Dow Jones Industrial Average, S&P 500 and the New York Stock Exchange remain range-bound since February. We recently pointed out that this trendless period was causing investors to hesitate. It was hard to tell whether the market is going to roll over or continue on its way up. Some new clues are pointing to the latter.

Nasdaq Composite Index 1 year out

NASDAQ Composite Index, one year out. Graph: MetalMiner.

The fact, that US stocks held their values well while Chinese markets plunged proves that Chinese financial news can only weigh on US stocks in the short term. In the longer term, China does not lead the US and its recent troubles do not appear to affect markets here that much.

What This Means for Metal Buyers

Moreover, the NASDAQ (a technology-focused index) recently hit an all-time high. The fact that technology stocks are leading the market is a positive sign. Lower oil and commodity prices are hurting the shares of energy and commodity producers, which helps explain why the other indexes are still range-bound. But, good earnings reports from leading tech companies are increasing the appetite of funds to buy stocks.

In conclusion, the US market is not immune to what happens outside the US. Further bearish news from outside could weigh on US shares, but, so far, things are looking good for US stocks in the second half of the year.

Free Download: Latest Metal Price Trends in the July MMI Report

{ 0 comments }

Gold miners saw their stock values plummet with the price of the yellow metal on Monday. BHP Billiton is investing $240 million in its Western Australia iron ore tug boat and port business.

Gold Sell-Off Hits Miners Hard

The steep sell-off in shares of gold miners, tracking a plunge in the metal’s price, wiped out more than $8 billion from their combined market value on Monday and pushed a global index of gold stocks to a six-and-a-half-year-year low.

Free Download: July Metal Price Forecast

The Thomson Reuters Global Gold index slumped 8.5% to its lowest since late 2008, the biggest one-day percentage drop in two years, after gold prices sank.

BHP Investing in Infrastructure

BHP Billiton said today it will spend $240 million upgrading its marine iron ore facilities in Western Australia. The funds will be used to purchase six tug boats and build a new tug harbor in Port Hedland’s inner harbor, with construction due to be completed in September 2016.

Free Download: Latest Metal Price Trends in the July MMI Report

{ 0 comments }

A quiet revolution is going on in the US power generation market, and it may be giving a lesson for those countries dithering over whether to allow hydraulic fracturing (fracking) of oil and natural gas deposits identified but not yet proven.

Free Download: July Metal Price Forecast

According to the FT, April was the first month in US history that gas-fired electricity generation surpassed coal-fired generation, (although it came close in 2012 when gas prices were also very weak). By comparison, in 2010 coal provided 45% of US power. In April of this year 31% of US electricity was generated by natural gas compared to 30% for coal, and the trend continues.

Watts Up

In gigawatt terms, wind power is growing even faster than natural gas, flattening the latter in the league tables. US coal capacity dropped by about 3.3 GW during 2014, and the US Energy Information Association predicts it will shrink by a further 12.9 GW this year, while wind power capacity rose by 9.8 GW and gas by 4.3 GW.

Source FT

Source: Financial Times

The reasons are more complex than simply low natural gas prices, although that, undoubtedly, is a major factor. The Environmental Protection Agency’s failed attempt to force environmental compliance by the back door this year encouraged some coal-fired utilities to see the writing on the wall and either mothball plants or invest in new technology to accommodate the mercury emission and other pollution targets, raising costs.

Brett Blankenship of Wood Mackenzie is quoted by the FT as saying, “low gas prices mean coal plants are running less, and when they run their margins are typically compressed. So companies find it difficult to make the investments needed to comply with regulations and keep those plants running.”

The Imitation/Substitution Game

It’s a vicious downward spiral in the face of lower-priced and less-polluting competitor fuels. Although natural gas makes a better swing fuel source to balance wind and solar renewables variability, not all utilities are blessed with an abundance of such spare generating capacity so they rely on their coal power plants to step in at times of peak demand. Unfortunately, running a coal plant at anything other than full or near-full load on a continuous basis brings per-gigawatt operating costs up AND per-gigawatt emissions of pollutants.

Not surprisingly, coal producers share prices have fared even worse than shale gas companies. Peabody Energy’s share price, the largest US coal producer, has fallen 98% since April 2011, while those of Arch Coal have dropped 99.2% and of Alpha Natural Resources by 99.6%, while their debt is so devalued it is yielding 17.9% for Peabody suggesting investors are expecting default.

With natural gas prices set to stay low for some years to come and renewable costs falling steadily the writing is on the wall for all but the latest and most efficient coal-powered electricity production. At least the environmental lobby will be pleased and the EPA may have achieved much of what it set out to do, Supreme Court slap down or not.

This September: SMU Steel Summit 2015

{ 0 comments }

MM-IndX_TRENDS_Chart_July-2015_FNL

There’s no reprieve from the bearish metals environment in this month’s MMI Report.

More Analysis: The July Metal Price Forecast

With the exception of the very specialized grain-oriented electrical steel (GOES) market and the Renewables MMI®, all of our indexes lost ground in June and could not gain traction amid falling commodity prices and a strong US dollar.

The one index that was steady from last month, which tracks raw material inputs of the renewable energy sector, has been stagnant for two years and, until trends show otherwise, its steadiness is more a measure of a lack of market activity than anything close to a turnaround or a new trend toward increasing prices.

The Stainless MMI is flirting with two-year lows and our Raw Steels index is up against lows not seen in years as well. Weakness in the Chinese stock market has put additional pressure on metals that were already reeling from the effect of the strong dollar. This is bad news for steelmakers, miners, refiners and smelters by itself, but coupled with increased supply in most of the metals we track, it’s become a real deterrent to profitability.

Moreover, both Europe and the US have higher-than-normal inventories of semi-finished products at service centers. Mill lead times remain short suggesting weak demand. Weak demand will continue to place downward pressure on prices.















captcha

{ 0 comments }

July 2015 Monthly Metal Buying Outlook copy

Pre-order August Metal Buying Outlook report here!

For the past three months, we’ve delivered complimentary Monthly Metal Buying Outlook reports as you formulated your 30-day strategy for sourcing aluminum, copper, nickel, lead, zinc, tin and steel (HRC, CRC, HDG, Plate). We received a ton of feedback based on these reports (overwhelmingly positive) and our proud to announce the commercial product launch beginning with the August Metal Buying Outlook report!

For $899/year, you can subscribe to receive 12 monthly reports, compiling all the fundamental information you need in a single, easy-to-read executive overview complete with technical factors affecting the price of each metal and specific levels to watch and strategies to employ.

We’re confident this is THE report for the North American Manufacturer: small-, mid-, or large-sized.

Subscribe today for your August Metal Price Forecast guide!

{ 0 comments }

A historic deal on nuclear and atomic energy between Iran and several nations is causing havoc with oil markets this morning.

Iran Deal Reached

Crude oil prices initially fell by as much as 2.3% to $50.98 a barrel as investors reacted to the freshly-inked deal between Iran and six world powers which would open Iranian oil up to new markets. However, oil bounced off those levels as investors weigh the details of the agreement and whether or not it will overcome deep skepticism in Congress. Oil was recently trading unchanged at $52.20 a barrel.

Free Download: July Metal Price Forecast

Experts have warned that the deal could lead to a flood of new oil supply from Iran – the Islamic Republic has 30 million of barrels of crude in storage and ready for sale, according to FACTS Global Energy, an industry consultancy.

End of China’s Untaxed Aluminum Semi Industry?

Alcoa CEO Klaus Kleinfeld said it was his “strong assumption” that the Chinese authorities will soon try to shut down China’s untaxed semi-finished aluminum exporting industry.

“I’ve last been in China four weeks ago or so, and had a lot of conversations also with high level folks. They are very clear that this is not in line with their policy, and that they are deeply looking into this,” Keinfeld told Reuters’ Andy Home.

This would make sense because not only do semis skirt China’s aluminum 15% primary metal export tax but they also qualify for a rebate of China’s value-added tax.

This September: SMU Steel Summit 2015

{ 0 comments }