Articles in Category: Product Developments

This election season, infrastructure investment has become the belle of the ball, putting blighted manufacturing towns such as Monessen, Pa. and Granite City, Ill., not only on the map, but they’ve become the go-to backdrop for both candidates as they criss-cross the nation trying to win votes.

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But what do candidates Hillary Clinton and Donald Trump’s plans really mean for the roads, bridges and infrastructure that everyone agrees need to be repaired? Can they even be successfully executed?

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Construction unemployment rates in all states and the U.S., overall. Source: Associated Builders and Contractors of America, Markstein Advisors.

Politico reports that Clinton has proposed a five-year, $275 billion plan. Trump suggested he would double her proposal. Clinton’s website touts a White House report that every $1 billion in infrastructure spending creates 13,000 jobs.

Everyone is Employed Now

Only one problem: That report is from 2011 when the construction industry was in the midst of one of its worst economic years in its history. Five years later, there’s actually a shortage of skilled construction laborers as construction has enjoyed robust growth every year since. Although spending has recently declined both home construction and nonresidential have posted strong gains this year. Read more

Tired of being an also ran?

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Having status symbols no better than the guy next door? Ever pulled up in your yacht only to find, 10 minutes later, a guy with a yacht twice the size pulls into the same bay right next to you? Yeah, tiresome isn’t it?

Who Needs a Ferrari When You Can Have a Gold iPhone 7?

Well, while everyone else is queueing outside an Apple store from midnight before the next morning release of a new smartphone, we have something so much better for you. This is the new iPhone 7 from Goldgenie, finished in 24-karat Gold, Rose Gold or Platinum, and if that is not enough for you they do a super luxury version edged and decorated with Swarovski Crystals and even high-quality diamonds. Here’s the best bit, this exclusive, oh-so-cool, piece of one-upsmanship (if there is such a word) luxurious collection will be available with prices starting at just $3,150 (£2,400).

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Why buy a bigger yacht when you can have a 24-karat gold iPhone 7? Source: goldgenie.

However if you really want to push that boat out and outdo the sheikh next to you, go for the $14,300 (£11,000 ) Diamond Rockstar. A bargain, right? It is also rumored that the luxury brand may even be replicating the $3 million (£2.3m) iPhone 6s Diamond Ecstasy encrusted with over 800 diamonds. Read more

This week, most exchange-traded metal prices came down to Earth as the Federal Reserve hinted it may finally increase interest rates. The hardest hit was copper, which hit a two-month London Metal Exchange low. Weaker Chinese imports over the past few months and the bearish calls of some major banks have exacerbated copper’s recent price fall.

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When construction is strong in, China copper imports surge… but with them falling? It doesn’t look like demand in the world’s largest consumer is keeping up. Copper is just one of many metals that would be affected by interest rate increases and more hawkish behavior from the Fed, in general, but unlike other non-ferrous metals whose prices have increased on the LME this year — such as zinc and tin — copper has not shown strong demand and generally falling supply. Copper never was fundamentally strong even when its price jumped in Q2.

Trump Trumpets Trade

Politics met metals this week as Republican Presidential Nominee Donald Trump became the first candidate for President to promise to label China a currency manipulator and take action at the World Trade Organization accordingly.  He also promised to instruct the office of the U.S. Trade Representative to bring more trade cases against China. You’d think he’d be nicer to the country that used to make his ties.

Let’s Exchange, No Spoofs!

The London Metal Exchange and CME Group made headlines this week as the former cut fees in half this month as an apology for moving its live “ring” (where traders make deals using hand gestures on big red couches) trading to a backup location after structural problems were discovered at its brand new London office. As for CME Group, it cracked down on a rogue trader, suspending him for at least 60 days, for “spoofing.” Spoofing is the practice of setting up electronic trades to create demand only to pull out of them at the last minute.

India Hates Steel Dumping, Too

India joined the U.S. and E.U. this week in placing tariffs on cheap imports of hot-rolled and cold-rolled flat steel. Although six countries saw their imports to the world’s largest democracy tariffed, China was, again, the main dumping culprit.

Aluminum Association: Let’s Make a Deal

Speaking of China, not only does the Aluminum Association — North America’s largest trade association of primary smelters — still want a bilateral trade deal with China to set up rules for imports from the People’s Republic, but it signaled this week that it would pursue tariffs similar to those steel has won against Chinese importers if it can’t get the deal it wants for its producer members.

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The AA may even ask the International Trade Commission to reclassify some imports of “semi-finished” product to make them subject to existing taxes.

Tin prices are up as shipments have fallen off and the Philippines is, once again, considering a raw ore export ban in a bid to bolster local processing.

Tin Shipments Fall, Prices Rise

Falling shipments from top tin exporter Indonesia and predictions that a surge in mining in Myanmar is tapering off has led to a scramble for the metal, sending inventories to the lowest level in over seven-and-a-half years.

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This provides a potential for further price gains for the metal mainly used to make solder for the electronics industry, already the second-best performer among industrial metals this year.

Filipino Lawmaker Revives Ore Ban

A Filipino lawmaker has revived a proposal to ban exports of unprocessed minerals to spur domestic processing, in a move that may tighten global nickel supply and make it an even tougher business environment for miners in the world’s top producer.

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The Philippines has vast but largely untapped mineral resources, limiting the contribution of mining to its economy to less than 1%. The sector is now facing a tough regime under the government of firebrand President Rodrigo Duterte who has suspended some miners causing environmental destruction.

The London Metal Exchange and CME Group took action recently to, respectively, cut fees for traders and stop a spoofer.

We’re Sorry: LME Cuts Fees

The London Metal Exchange has cut fees in half for open outcry trades during August as a goodwill gesture after it had to vacate its premises because of structural problems, it said on Monday.

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Ring trading moved to its disaster recovery site in Chelmsford, east of London, in July after a potential safety issue was discovered in the building that houses its offices in London’s financial district.

CME Suspends Spoofer

CME Group, Inc. suspended a futures trader from its markets for spoofing on Monday, the exchange operator said, the latest regulatory action over the manipulative trading practice.

The company — which owns Comex, the Chicago Mercantile Exchange and other exchanges — barred Andrey Sakharov from trading for 60 days and could extend his ban, according to a disciplinary notice.

On multiple dates starting last month, Sakharov entered electronic orders in CME’s gold and natural gas markets that he did not intend to trade, the disciplinary notice said.

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The practice of placing bids to buy or offers to sell contracts with the intent to cancel them before execution is known as spoofing and is illegal. It is used to create an illusion of demand in markets, so that spoofers can influence prices to benefit their market positions.

One of the causes of falling aluminum prices over the past few years was the rise in China’s aluminum exports. But Chinese exports started to calm down this year, helping aluminum prices to recover.

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China exported 390,000 metric tons of unwrought aluminum in July, down 9.3% from July of last year. Chinese aluminum exports have fallen around 7% for the first seven months of 2016. Lower Chinese aluminum exports suggest stronger aluminum demand in China coupled with some supply cuts.

According to the latest figures released by the International Aluminum Institute (IAI), Chinese aluminum production has now fallen on a year-over-year basis in five out of the last six months. For the first half, Chinese aluminum production has fallen by 3.3% compared to the same period last year. This will be the first year where Chinese annual aluminum output declines if Chinese smelters don’t restart idled capacity. But, will they?

US Producers Warning Of Higher Chinese Supply in H2

During their second quarter earnings calls, some U.S. producers pointed to higher Chinese supply as one of the biggest risk for the aluminum industry in the second half. Century Aluminum believes that aluminum production in China could increase in the high single digits in 2016. For that to happen, we would need to see a sharp increase in China’s aluminum output in the coming months. Norsk Hydro also expects some of the Chinese capacity to come back later this year.

Prices: Not Too High But Rising Steadily

3M aluminum LME rising this year. Source: MetalMiner analysis of Fastmarkets data

Three-month aluminum LME price rising this year. Source: MetalMiner analysis of Fastmarkets data.

The ongoing fall in Chinese exports and a good-looking demand picture thanks to Chinese government stimulus are supporting aluminum prices this year. Unlike other metals, aluminum prices haven’t really skyrocketed but they are drawing a nice uptrend this year, signaling that investors’ sentiment on the metal is improving. If China doesn’t restart capacity, we could continue to see prices climbing higher.

A new space has opened up for India’s scrap metal recycling business. The government has given its go-ahead to a “state-of-the-art” auto shredding and recycling plant, which has been in the pipeline for about a year.

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The automotive scrap shredder/recycler is the result of an agreement signed with the state-run metal scrap trading firm MSTC (formerly Metal Scrap Trade Corporation) and Mahindra Intertrade, a part of the diversified $17.8 billion Mahindra Group. Mahindra, incidentally, is a well-known auto major in India, too.

Potentially Huge Market

India’s scrap market is estimated to be in the range of about $1.8 billion, and most of the scrap required by the country, about 5-6 million metric tons, is imported.

Scrap Recycling Yard

India will soon receive its first state-of-the-art automotive recycling yard. Source: Adobe Stock/Robert Hainer.

In a thriving auto market, such as India’s, there’s no formal disposal method for end of life vehicles right now, thus the new joint venture has a ready-made market. The JV will start off with a single unit, but will soon expand across India. The idea is to save India precious foreign exchange rupees, in addition to creating jobs. Every ton of new steel manufactured from scrap will help save iron ore, coal, electricity and limestone from being produced. Read more

The London Metal Exchange made news this week for cutting trading fees and retroactively slapping Detroit warehouse operator Metro International with a $10 million retroactive “settlement” long load-out queues that distorted prices.

LME Will Cut Trading Fees

The London Metal Exchange is expected to cut some trading fees, in a bid to arrest sliding volumes, but lower costs are unlikely to convince those already using cheaper alternatives — such as off-warrant storage — to return, metals industry sources say.

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Volumes on the 139-year-old exchange have been falling since trading fees were hiked an average 31% in January 2015. The drop has accelerated this year; in the six months to June volumes are down nearly 9% from the same period in 2015.

LME Hits Metro International $10 Million Non-Fine

Metro International Trade Services has just been hit with a $10 million “settlement” by the London Metal Exchange for its role in abetting the original load-out queue for aluminum in Detroit.

The subsequent splintering of the aluminum price between LME basis price and physical market premium caused collective outrage among manufacturers struggling to find ways to hedge the latter’s unprecedented volatility.

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Some are still pursuing Metro and its owner, Goldman Sachs, through the courts. The LME insists that the $10 million payment is not a fine but, rather, a settlement Metro agreed to in negotiations about the long load-out queues at its operation in the last three years.

While India’s Tata Steel’s effort to sell its U.K. assets enters its second round of bids, there’s some good news for the company from the other side of the Atlantic.

The provisional government of Quebec in Canada has decided to invest $133 million (C $175 million)  in Tata Steel’s iron ore project in the region between Quebec and Labrador.

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According to an announcement made by Tata Steel Minerals Canada (TSMC), the company’s Canadian subsidiary, it had been awarded the financial contribution to support the development of its Direct Shipping Ore (DSO) Project. The contribution included an equity stake of $95.72 million (C $125 million) through the Capital Mining Hydrocarbons Fund which supported mining activities in the northern region of Québec and a loan of $38.29 million (C $50 million) through Investment Québec.

Canada Supports Iron Ore

Analysts said the equity/loan assistance was aimed at fueling growth in the mining sector in the region and would also create jobs. TSMC, a joint venture, is developing the iron ore project in Quebec. Tata Steel holds a 94% stake in the JV while the remainder is held by the Toronto-listed New Millennium Corporation.

The DSO project involves mining, crushing, washing, screening and drying the run-of-mine ore, and is expected to produce 4.2 million tons of sinter fines and pellet feed a year.

The finished product will be transported to Sept-Îles, Québec, from where it will be shipped to Tata Steel Europe’s steelmaking facilities.

With the Canadian government’s equity infusion in TSMC, Tata Steel’s stake will come down though it’s not yet clear how much. The Quebec Government’s financial package is in line with a similar financial package proposal by the U.K. Government for Tata Steel’s Port Talbot operations, aimed at rescuing the British steel industry.

Port Talbot Still on the Block

Last week, CNBC TV 18 reported that Tata may keep the Port Talbot unit. Quoting unnamed sources, the report claimed Tata Steel is likely to sell off downstream units in Rostherham, Hartlepool and Stocksbridge, instead. Each of these operations have a 100-million-metric-ton production capacity and together employ about 3,000 workers. Management buyout firm Excalibur and Indian-origin businessman Sanjeev Gupta’s Liberty House are said to be in the fray for the assets of the other operations.

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Tata had written down the value of its U.K. steel assets to almost zero and was also exploring a merger of its European business — including its profitable assets in the Netherlands — with German peer ThyssenKrupp.

Rich Harshman, Chairman, President and Chief Executive Officer, of Allegheny Technologies, Inc. (ATI) emphasized in the company’s Q2 2016 earnings call last week that sales to the aerospace and defense market continue to drive ATI’s results, representing over 50% of total 2016 sales.

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Harshman said, “Our aerospace market is being driven, in large part, by the growth of ATI’s next-generation mill products, forgings and castings.”

StuartsF35_500

Defense, in both the aerospace engine and airframe segments, are helping ATI’s bottom line. Source: Department of Defense.

ATI’s business strategy is heavily focused on products which are proprietary to ATI or have high barriers to entry.  Based on long-term agreements, its technological prowess and its ability to meet build rate schedules, ATI seems well-positioned to capitalize on the increased build rates in commercial aerospace.

ATI has a foothold in legacy programs for both airframes and jet engines but has also been part of the research and development for the next generation of both. ATI has been awarded 300 new parts contracts which will represent over $1 billion n new business from 2016-2020.  The long-term agreements (LTAs) will lead to significant growth in ATI’s components business in precision forgings and castings as well as in powder metal alloys, which are usually used for additive manufacturing or 3D printing. Read more