Articles Published in November, 2021

Recently, MetalMiner’s Stuart Burns delved into the aluminum market deficit, one in which limited aluminum supply and elevated delivery premiums have been persistent features.

However, perhaps to some aluminum buyers’ relief, some supply is coming back online next year.

Each month, MetalMiner hosts a webinar on a specific metals topic. Sign up for the last session of the year, scheduled for Wednesday Dec. 8, during which the MetalMiner team will discuss price predictions for 2022. 

Alcoa to restart idled smelter

Alcoa logo

Casimiro/Adobe Stock

Alcoa Corporation earlier this month announced plans to restart an aluminum smelter that had sat idle since 2009.

The firm said it will restart the joint venture Portland Aluminium smelter in Australia, which has a total annual capacity of 358,000 metric tons per year.

However, Alcoa said it plans to restart 35,000 metric tons of capacity.

“Portland Aluminium is an unincorporated joint venture with 358,000 mtpy of total capacity, and Alcoa Corporation has 197,000 mtpy of consolidated capacity,” Alcoa said. “Once the restart is complete, Portland Aluminium will operate at approximately 95 percent of total capacity and Alcoa Corporation will have approximately 186,000 mtpy of its consolidated capacity at Portland operating.”

Renewed production at the Australian smelter is slated to begin in Q3 2022.

In September, Alcoa announced plans to restart its Alumar aluminum smelter in Brazil. The smelter, which has annual capacity of 268,000 metric tons per year, has been idle since 2015.

Midwest premium eases

As Stuart Burns has explained throughout the year, rising aluminum premiums reflect market tightness.

“The aluminum market is undeniably tight, as consumers are having to wait months for metal and the Midwest Premium rises,” Burns wrote back in March. “In some locations — Europe, in particular —  consumers of rolled plate cannot secure new production space until well into Q3.

“Some mills have even pulled out of quoting for new business customers in 2021. Anti-dumping legislation on flat rolled products from China and a fire last year at a Russian rolling mill have combined dramatically restrict supply options for consumers.”

Fast forward to Q4, and inventories in LME depots have continued to dwindle, Burns explained while also covering the background of the post-financial crisis aluminum market and the history of the so-called “stock and finance” trade and the shadowy world of off-warrant stocks.

However, the Midwest aluminum premium has lost some steam over the last couple of months. according to MetalMiner Insights data.

Read more

Two years ago, Indonesia instituted a ban on nickel ore exports.

Now, it is contemplating banning exports of tin and copper ore, too.

You want more MetalMiner on your terms. Sign up for weekly email updates here.

Indonesia export bans prompt tin price surge

Indonesia on a globe

zerophoto/Adobe Stock

Indonesian President Joko Widodo has been announcing from different forums that his country may stop the export of bauxite next year, copper ore in 2023 and tin in 2024.

On the heels of the announcements, the tin price has surged, MetalMiner Insights data shows. (Subscribers can find additional tin and copper analysis in the next Monthly Metal Outlook report, which will be released Wednesday, Dec. 1.)

The LME three-month tin price closed Monday at $39,450 per metric ton. The price is up 6.6% month over month.

For long, Indonesia has been a major exporter of metal ores, mostly to Asian countries, including China and Japan. The ban on nickel exports had triggered investments, mostly from China, into Indonesian nickel processing.

As part of efforts to improve the country’s external balance & attract investments into the resource processing industry, Indonesia may stop tin exports in 2024, the Indonesian President reiterated last week at the Indonesian central bank’s annual gathering.

The president has made similar statements in recent public appearances about the country’s long-term dependence on raw commodities, reducing its export earnings and employment opportunities.

Read more

This morning in metals news: General Motors announced it had purchased a stake in Pure Watercraft, a firm specializing in “all-electric boating solutions”; aluminum prices ticked up ahead of Thanksgiving; and, lastly, Thyssenkrupp commissioned its 35th EnviNOx® system, which reduces nitrous oxide emissions.

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

GM buys stake in electric watercraft firm

General Motors headquarters in Detroit, Michigan

Katherine Welles/Adobe Stock

When it comes to the automotive space and electrification, we typically focus on EVs that operate on land.

However, automaker General Motors recently announced it had purchased a stake in Pure Watercraft, which produces all-electric boating solutions. GM purchased a 25% stake in the Seattle-based firm.

“The collaboration between GM and Pure Watercraft advances a shared vision to promote sustainability through an expansion of zero-emissions mobility for future generations and reflects the holistic approach necessary for widespread EV adoption,” GM said.

Read more

Lower auto sales in Europe have put West European hot rolled coil prices under pressure. However, demand from construction is nonetheless helping to support prices for the flat-rolled product.

“People want to invest their money into something,” one trader source told MetalMiner.

We’re offering timely emails with exclusive analyst commentary and some best practice advice. 

Hot rolled coil prices slide

hot rolled coil steel

taitai6769/Adobe Stock

ArcelorMittal had originally sought €1,080 ($1,210) in November. While that price remains the Luxembourg group’s official one, transactions have taken place at lower levels.

Large-volume transactions have occurred in November at €980-1,000 ($1,095-1,120) per metric ton exw for delivery in January, the trader said.

Transactions for smaller volumes €1,050 ($1,175), the trader added.

Imports from Russia and Turkey have transacted at an average of about €865 ($970) per ton cfr Europe, the trader noted.

Auto registrations slow

New automobile registrations in the European Union totaled 665,000 units for October. That marked a drop of more than 30% year over year from 950,000 units, the European Automobile Manufacturers Association (ACEA) said Nov. 18.

Read more

While you may be busy putting the finishing touches on your Thanksgiving spread and, subsequently, taking a turkey-induced nap, you might find some time to revisit this week’s coverage, including oil prices, global crude steel production and much more.

Thanksgiving

Alexander Raths/Adobe Stock

But first, in case you missed it, MetalMiner is hosting its final monthly webinar of the year at 10:00 a.m. CDT, Wednesday, Dec. 8. Metal buying organizations will not want to miss it, as the MetalMiner team will delve into price predictions for 2022. For more information about the webinar and to sign up, those interested should visit the MetalMiner Events page.

Elsewhere, MetalMiner also recently launched a suite of precious metals within the MetalMiner Insights platform. In addition to gold and silver, the suite includes platinum and palladium (of particular relevance to the automotive sector), plus rhodium, iridium and ruthenium.

Without further ado, here’s a recap of this week’s coverage:

We’re off today and tomorrow but will resume regular coverage Monday.

But for now, we wish you a Happy Thanksgiving, MetalMiner readers!

Well, so far, the simple answer to the question posed in the headline is “no.”

On Tuesday, the White House announced the Department of Energy will “make available releases of 50 million barrels of oil from the Strategic Petroleum Reserve to lower prices for Americans and address the mismatch between demand exiting the pandemic and supply.”

Brent crude oil price chart

SodelVladyslav/Adobe Stock

Talk of a strategic reserve release did have a calming effect on markets in previous weeks. However, when it came to it 50 million, was too little and over too long a time frame to have any impact.

Prices actually rose, with the international benchmark Brent settling up 3.3% at $82.31 a barrel on Tuesday, the Financial Times reported.

Want an occasional email from MetalMiner that highlights new content with NO sales ploys? Join that list.

Oil reserve delay

In part, the aforementioned result is due to not just the limited size of the release — made in concert with the U.K., India, South Korea and China — but the delay.

About 32 million barrels will be delivered between mid-December and the end of April 2022 in a swap with oil companies, which then must return an equivalent volume by 2024. The other 18 million barrels accelerate sales that Congress had already authorized, and so have no net impact.

Read more

This morning in metals news: U.S. GDP increased by 2.1% in Q3 2021, the Bureau of Economic Analysis reported in its latest estimate; new home sales increased in October; and, lastly, average U.S. gasoline prices are higher this Thanksgiving holiday than any since 2012.

Each month, MetalMiner hosts a webinar on a specific metals topic. The final webinar of the year is scheduled for Wednesday, Dec. 8, during which the MetalMiner team will overview predictions for 2022. For more information and to sign up for the webinar, visit the MetalMiner events page

US GDP up 2.1%

US GDP

alexlmx/Adobe Stock

According to the Bureau of Economic Analysis today, U.S. real GDP increased at an annual rate of 2.1% in Q3. The figure is the bureau’s second estimate for Q3 GDP.

U.S. GDP increased by 6.7% in Q2 2021.

“The increase in third quarter GDP reflected the continued economic impact of the COVID-19 pandemic,” the BEA reported. “A resurgence of COVID-19 cases resulted in new restrictions and delays in the reopening of establishments in some parts of the country. Government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households all decreased.”

New home sales tick up in October

New home sales in the U.S. increased by 0.4% in October from the previous month, the Census Bureau reported.

Sales reached a seasonally adjusted annual rate of 745,000 in October.

Read more

Yesterday, MetalMiner’s Stuart Burns touched on the aluminum market and plummeting inventories, a trend in stark contrast to former times of plenty.

Meanwhile, in the steel market, global crude steel production totaled 145.7 million metric tons in October, the World Steel Association reported.

Do you know the five best practices of sourcing metals, including steel?

Steel production slides

steel production

photollurg/Adobe Stock

The October steel total marked a decline of 10.6% on a year-over-year basis. Meanwhile, output increased by 0.4% compared with the previous month.

In China, the world’s top steel producer, output peaked this year at 99.5 million tons in May. Since then, China’s output has declined each month, according to the World Steel Association.

The country’s October steel production totaled 71.6 million tons, down from 73.8 million tons in September.

The pace of GDP growth in China slowed to 4.9% in Q3, according to National Bureau of Statistics data. GDP had increased by 7.9% year over year in Q2 2021.

For the year to date, China’s output of 877.1 million tons marks a year-over-year decline of 0.7%.

Read more

This morning in metals news: Norsk Hydro plans to begin construction on its new aluminum recycling plant in Cassopolis, Michigan, in Q2 2022; meanwhile, U.S. utilities are spending more on electricity delivery; and, lastly, the United States International Trade Commission recently voted to continue investigations regarding imports of oil country tubular goods from Argentina, Mexico, Russia and South Korea.

Make sure you are following the five best practices of sourcing aluminum

Construction to begin next year on Hydro’s new Michigan aluminum recycling plant

Norsk Hydro

filins/Adobe Stock

Norsk Hydro said it is on track to begin construction in Q2 2022 on its new aluminum recycling plant in Cassopolis, Michigan.

“The Cassopolis greenfield development will mark the first large-scale production of Hydro CIRCAL® extrusion ingot in North America. We look forward to bringing this high-quality, low-carbon product to our most demanding customers,” said Eivind Kallevik, executive vice president of Hydro Aluminium Metal.

The extrusion ingot will be used in automotive, construction and consumer applications, in addition to building systems. The plant will have annual capacity of 120,000 tons per year.

Utilities pay more for electricity delivery

U.S. utilities are paying for more electricity delivery but less for power production, the Energy Information Administration reported today.

Read more

Longtime readers of MetalMiner may recall a number of aluminum posts we have put out over the years since the financial crisis that explore shadow stocks or the “stock and finance trade” inventory that have referred to the murky world of “off-warrant,” or non-exchange, reserves of aluminum. Those reserves are often hard to determine in terms of location, volume or ownership.

They have remained an enduring feature of the global aluminum market. The market’s perception of their size and the possibility of their delivery back into circulation have been persistent influences on the market price.

See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your aluminum buy.

Aluminum after the financial crisis

aluminum ingot

WestPic/Adobe Stock

The stock grew in the immediate aftermath of the 2008 financial crisis, as the world went into a form of financial lockdown. All manner of downstream activities from automotive to household goods stopped consuming aluminum.

Recovery took many months, indeed stretched in 2010 before Chinese stimulus measures rippled out into the world, stimulating demand and facilitating a return to strong growth.

But primary aluminum mills — partially protected by power and alumina supply contracts linked to the ingot price and mindful of the huge cost to capital of shutting down major smelters — kept churning out the metal.

Stock and finance

Seeing an opportunity, traders and banks piled into the market.

Read more

1 2 3 6