Articles in Category: Sourcing Strategies

Tin cansWith tin prices on the decline in recent weeks, there may not be much obvious hope for optimism but if we look at the recent past, there might just very well be that hope we were looking for.

According to FastMarkets, tin has dipped downward three times since April, but each time was followed by a strong rebound, possibly revealing that a strong foundation is now being built for the base metal.

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!

Tin activity in recent weeks: 0.3% drop last week to $14,800 per ton and further decline on Monday, Nov. 9, to $14,615 per ton. However, both those figures are significantly higher than the low point of $13,365 per ton that tin reached in June.

“Given low LME stocks, we feel an uptrend may well start to unfold – we would not be surprised if prices work back towards $16,500 in the fourth quarter, with support likely around $14,000,” the source states.

Indonesian Exports Paint the Picture

Recent tin price activity can be chalked up to the recovery of Indonesian exports. New regulations went into effect on Nov. 1, leading to a delay in shipments and driving LME tin stocks under 5,000 metric tons, down from a high this year of 12,165 mt.

“As more smelters get permits, exports are expected to recover but the introduction of further restrictions on November 1 that force smelters to prove they have been paying royalties and taxes on shipments may further disrupt shipments,” said Sucden Financial in a quarterly metals report.

How will base metals fare for the remainder of 2015 and into 2016? You can find a more in-depth tin 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:




Our forecast and research team spends the bulk of its time studying price activity as it relates to commodities in general, industrial metals in particular and the underlying price behavior of each metal.

For those that subscribe to our monthly forecast report or downloaded our annual report nearly all of the commentary and supporting data tell one story: metals markets remain bearish.

GOES_Chart_November_2015_FNLThe why behind the call appears in many of our writings both on the site and within our forecast reports.

Why should GOES Be Any Different?

Simply put, grain-oriented electrical steel (GOES) does not behave like the rest of the base metals, or steel products for that matter, because it operates under quite a different set of market conditions. Some of those conditions appear obvious and others less so.

The Regulatory Atmosphere

Besides looking more like an oligopoly vs. an open market with ample opportunity for price discovery, GOES markets have seen dramatic changes as a result of energy efficiency standards and regulations. These regulatory changes have single-handedly altered the GOES pricing landscape.

DuPont has an excellent information page on the regulatory changes enacted since 2007 and continuing through 2016 impacting this market. Suffice it to say, the 2016 regulations add additional energy efficiency requirements for 3-phase low-voltage, general-purpose (LVGP) and medium-voltage (MV) transformers. These regulations come on top of energy efficiency requirements for LVGP transformers and MV transformers.

The Bottom Line

To meet these new energy requirements, manufacturers needed to upgrade the materials used to make this type of equipment. Beginning in 2007, one could argue that the commoditization of the standard grades of GOES began as the materials leading to more core loss (and thus, poorer energy efficiency) entered a declining market as electrical power equipment manufacturers started sourcing more technically demanding grades. This bifurcation of the GOES market has now become much more extreme.

According to a recent TEX report, the European market landscape has changed dramatically. The report estimates Europe as a 300,000-metric-ton market for 2016. However, the market mix has shifted from approximately two-thirds of the market buying the commodity grade material and a third of the market buying the more value-added material, to nearly two-thirds now consuming high-grade materials (coming from producers in Japan and Korea) vs. one third of the demand purchasing the more traditional commodity grades.

MetalMiner has conducted a similar market sizing analysis here in the United States with demand pegged at 250,000/mt per year. MetalMiner has not sized the commodity grade market from the value-added grades, but one can assume a similar shift is also occurring.

What This Means For Prices

As domestic manufacturers enter into negotiations for contract orders commencing in January 2016, one might expect to see two different price trends – rising prices for the value-added grades (due to tight supply and strong demand) and continued pressure on the commodity grades. However, market participants have confirmed that domestic mills have sought higher prices for both non-oriented electrical steel and GOES, though foreign producers’ prices for the commodity grades have declined.

In addition, the Korean and Japanese producers have little to no material available, particularly in high-grade GOES. Buying organizations caught short on material would do well to identify Chinese sources of supply.

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This is the final post on steel construction and the restoration of Wrigley Field. See installments one, two and three if you missed them.

When the Chicago Cubs’ season opened in April new challenges arose for the restoration of Wrigley Field, the kind that come from installing steel during an active baseball season.


Steel supports and rebar being prepared for below-grade work at Wrigley Field’s new adjacent support building. Image: Jeff Yoders

Expediting of materials moved from Wrigley Field’s green lot moved to a south side steel yard. Steel erection on the new video scoreboard in the right field bleachers took place around game times.

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Work on the bleachers finished in June, and general contractor Pepper Construction is continuing work on a new plaza building adjacent to the park. Work on this new construction building will continue into phase two, and it will provide a spacious underground clubhouse for the players as well as office space and other amenities.

Concrete work is completed for the foundations and the first level basement of the new building. Steel is going up as excavation continues. The steel is completed up to the 6th floor now. Sheathing and building envelope work on the new building will continue through next season.


Structural steel that makes up the skeleton of the new Wrigley Field support building is being installed while simultaneous work goes on underground beneath it. Image: Jeff Yoders

“This has been so exciting for us,” said Kevin Heatter, project executive for Pepper. “Fans will see some really cool construction while seeing a baseball game. You won’t get that anywhere else. I tell the young kids in the trailer that what you will experience on this job, you will only see every 10 or 15 years if you’re lucky.

Free Download: The October MMI Report

“You will likely never see a project exactly like this again because of the historic nature of Wrigley Field. It’s a unique project in a unique location that requires some of the best minds in our industry to come together to develop creative ways to build it. That’s what makes it a lot of fun. It’s a challenge, sure, but boy it’s what gets you excited in the morning when you come in.”

aluminumingots_500We’ve reported on Alcoa‘s production declines affecting aluminum prices and physical premiums, but there is even more to look at for those investing in firms like Alcoa, Rio Tinto Group and Norsk Hydro – notably, the London Metal Exchange‘s aluminum inventories.

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!

In short, LME’s aluminum inventory has been steadily dropping after reaching about 5.5 million metric tons in mid 2013. According to Market Realist, that drop was compounded in October with aluminum inventory at LME warehouses down 138,900 mt.

As of this week, LME warehouses recorded a total aluminum inventory of 3.03 mmt, according to the news source, of which nearly 36% is from canceled warrants. All the metal that enters LME warehouses is on warrant and these warrants are canceled when the bearer requests the physical delivery of the metal.

From late October through Nov. 2, canceled warrants grew by more than 23% despite total aluminum inventory with LME warehouses decreasing over the same period.

Leon Westgate, an analyst at ICBC Standard Bank, told Bloomberg: “(The increase in canceled warrants is) unlikely to be related to real demand. With the large tonnages like that, it’s likely to be finance-related. It’s likely to be material moving to an ex-LME location.”

Forming your aluminum sourcing strategy, moving forward

Alcoa’s cuts and the situation with LME warehouses could impact midwest aluminum premiums, but they won’t likely have a long-term impact on aluminum prices due in part to a strong dollar and the significant amount of aluminum leaving China.

How will base metals fare for the remainder of 2015 and into 2016? You can find a more in-depth aluminum 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:

monthlymetaloctober_210Our Monthly Metal Buying Outlook has quickly become our most popular product here at MetalMiner™. Now you can see for yourself what those who have already subscribed have learned: that this report is a trusted and valuable resource for the North American Manufacturer sourcing aluminum, copper, nickel, lead, zinc, tin and steel (HRC, CRC, HDG, Plate). Oh, and did we mention you can find out at no charge?

We are offering a 2-month free trial to our monthly outlook reports. Now you can access the final 2 reports of 2015, compliments of MetalMiner. Industry-leading research at no cost means you get a free look at what the competition has already learned – MetalMiner sets the bar for sourcing industrial metals.

Start your free trial today!

While many nickel producers were anticipating the Indonesian export ban would support price increases2016-annual-buyers-guide this year, the reality was much different. Philippine suppliers’ alternative supply led to nickel prices dropping more sharply than other metals this year.

We’ve identified the main price drivers for nickel next year as:

1. China GDP & PMI Data

2. Dollar to Euro exchange rate

3. Philippine exports

For a long-term industrial buying strategy for nickel, complete with specific support and resistance levels, download your complimentary copy of our 2016 Annual Metals Outlook report!

This report also includes commodities markets and industrial metals market analysis, in addition to key price drivers and commentary on aluminum, nickel, lead, zinc, tin and various forms of steel, in addition to copper.

Hot off the MetalMiner™ presses: The November Metal Buying Outlook report. In this month’s report,November report we recap October, the situation in China and then provide market commentary, industrial buying strategies and price drivers with support and resistance indicators for the metals YOU source: aluminum, copper, nickel, lead, zinc, tin and steel (HRC, CRC, HDG, Plate).

For November and December only we are offering a free trial to our Monthly Metal Buying Outlook reports. Now the final 2 reports for 2015 can be yours at no risk, no cost and no financial obligation.

Sign up today! 

US construction spending rose in September to the highest level in seven-and-a-half years as both private and public outlays increased, suggesting a modest upward revision to the third-quarter GDP growth estimate.

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Construction spending advanced 0.6% to $1.09 trillion, the highest level since March 2008, after an unrevised 0.7% increase in August, the Commerce Department reported on Monday.

Construction Spending Increase

Construction spending has increased every month this year, a trend we have documented, and the latest gain suggested the economy remained on firmer ground despite some slowing in consumer spending and persistent weakness in manufacturing.

Economists polled by Reuters had forecast construction spending rising 0.5% in September. Construction outlays were up 14.1% compared to September of last year.

September’s increase is slightly above the gain the government had estimated in its advance third-quarter gross domestic product estimate published last week.

The government reported the economy grew at a 1.5% annual pace in the third quarter, hurt by business efforts to reduce an inventory glut and continued spending cuts by energy firms. A strong dollar also hurt the economy.

Manufacturing Falters

Unfortunately, as construction spending was rising, manufacturing still fell, as activity hit a two-and-half-year low. While it would certainly be a positive to see manufacturing activity join construction in the recovery, it accounts for only 12% of the economy and analysts said it was unlikely to influence the Federal Reserve‘s decision whether to raise interest rates at the end of the year.

The Institute for Supply Management said its national manufacturing index slipped to 50.1 this month, the lowest level since May 2013

Manufacturers continued to cite the dollar’s strength and low oil prices as headwinds. The new orders sub-index rose to 52.9 last month from 50.1 in September, but export orders continued to contract. There were modest improvements in supplier deliveries and backlog orders.

Low Prices Fuel Growth

While construction spending continues to grow, much of its growth continues to be fueled by low prices for metals such as steel, copper and aluminum. It is still a buyers’ market for construction estimators and other procurement professionals in the construction industry.

Seven manufacturing industries, including furniture and fabricated metal products, reported growth in October. Nine industries, including apparel, primary metals, petroleum and coal products, electrical equipment, appliances and components, machinery and transportation equipment, reported contraction.

Free Download: The October MMI Report

The dollar has gained 16.8% against the currencies of the main trading partners of the US since June 2014. The picture is further clouded in many countries by falling values against the US dollar. In some commodities, currencies are shielding producers from the worst effects of falling global prices.

  • 40% of price movements are due to the general market 2016-annual-buyers-guide
  • 30% of price movements are due to the metal sector
  • 30% of price movements are due to what is going on with the individual metal

Presenting your complimentary copy of our 2016 Annual Metals Buying Outlook report. Inside you will find an introduction and analysis of commodities markets, industrial metals markets and key price drivers for aluminum, copper, nickel, lead, zinc, tin and steel (HRC, CRC, HDG, Plate).

If you’re sourcing these metals in 2016 then this is the resource for you. Updated quarterly, it is a perfect complement to our Monthly Metal Buying Outlook reports (which you can now experience with a 2-month free trial).

Arguably, no issue has impacted the steel industry more than imports.

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With multiple trade cases filed in 2015, service centers reeling with higher than average months-on-hand inventory levels (at prices that exceed the current market), US producers operating at 71.3% capacity utilization, the last thing the industry needs to hear is China somehow ascending to the World Trade Organization with full “market economy” status.

Nobody Thinks China Operates a Market Economy

According to a new report issued by trade specialist law firm Wiley Rein entitled, The Treatment of China as a Non-Market Economy Country After 2016 discusses what changes in market status China should expect to receive after 1 provision in the original negotiated WTO agreement expires on December 11, 2016.

China’s Protocol of Accession (to the WTO as a full member) requires that China and more specifically, its government, not meddle, “…its control over prices of key inputs to many manufactured products.”

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