Author Archives: Belinda Fuller

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The Copper Monthly Metals Index (MMI) dropped three points in August down to 71, with all prices in the index losing value.

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LME copper prices traded lower in August following the precipitous price drop early in the month.

Source: MetalMiner analysis of London Metal Exchange (LME) and FastMarkets

The price dropped again in early September to new lows for 2019, prior to moving back to the $5,800/mt price level during the past week.

SHFE Prices Trade Sideways

Source: MetalMiner analysis of FastMarkets

Since June, SHFE prices have traded in a narrow band in the CNY 46,000/mt to CNY 48,000/mt price range, indicating a lack of demand recovery.

Global Demand Still Looks Weak

Demand concerns continue to weigh on copper prices. Meanwhile, trade issues also continue to impact the metal’s price volatility.

Demand in China, the world’s largest copper consumer, still looks weak as the government continues to implement measures to bolster the economy.

The China Association of Automobile Manufacturers (CAM) released poor automotive sales numbers for August. Like copper, the automotive industry may serve as a good barometer of consumer demand, given its overall weight in total consumer spending.

Total sales dropped by 6.9% in August compared to July. Further, the organization warned the sales outlook looks weak, Reuters reported. Refined copper cathode production dropped by 0.5% compared with July, according to the same report.

What This Means for Industrial Buyers

In last month’s Copper MMI, we provided a list of copper products included on the list to be impacted by the U.S. implementation of 301 WTO tariffs of up to 100% on imports from Europe. As a result of these proposed tariffs, copper product imports, as well as domestically produced copper semis, may face serious price increases.

As of now, copper appears to remain on that list. Industrial buyers will want to continue to track developments in the case.

Want an easier solution for tracking industrial metals prices and trade news? Request a demo to the MetalMiner Insights platform.

Buying organizations seeking more insight into longer-term steel price trends should read MetalMiner’s Annual Metal Buying Outlook.

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Actual Copper Prices and Trends
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Copper prices dropped more significantly this month, with all prices showing declines.

The LME primary three-month price dropped by 5.3% to $5,637/mt.

Korean copper strip dropped by 4.7% to $7.79/kilogram.

Chinese prices decreased by more than 4%. China’s copper wire price dropped most, by 4.7%, to $6,484/mt. The primary cash and copper bar prices dropped by 4.3% to $6,488/mt and $6,479/mt, respectively.

The Indian copper cash price dropped by 4.4% to $6.14/kilogram.

U.S. prices in the index decreased more mildly. U.S. producer copper grade 110 and grade 122 decreased by 2.6% to $3.34/pound for both grades, while grade 102 dropped by 1.7% to $3.56/pound.

The Stainless Monthly Metals Index (MMI) followed last month’s six-point increase with a 16-point jump this month.

Once again, the index surge came as a result of strong nickel price gains, even though a slim majority of global prices in the index declined (albeit mildly compared to nickel price increases).

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LME nickel prices increased 28.5%, based on supply disruption news. Nickel prices in China and India also reacted strongly, increasing by 25.9% and 24.1%, respectively.

Source: MetalMiner analysis of the London Metal Exchange (LME) and FastMarkets

SHFE Nickel Prices Surged

Source: MetalMiner analysis of FastMarkets

The Indonesia nickel ore export ban will now take effect two years earlier than planned, on Jan. 1, 2020. SHFE prices surged just prior to, and during the day or so around, the actual approval of the ban date by the Indonesian government.

Higher Nickel Prices Look Set to Stick for the Near Term

Opinions appear mixed as to whether prices will drop back down anytime soon, with some analysts foreseeing further price increases.

Indonesia produced around 26% of global mine supply last year, according to the International Nickel Study Group.

It is possible ramped-up production of nickel pig iron in Indonesia will stave off further price increases from supply shortages. According to Reuters, large mining companies reportedly welcomed the ban and plan to increase smelting output.

Also, higher ingot prices higher, incentivizes mine production; as such, increases could also come from other sources.

According to a recent Reuters report, Dante Bravo, president of the Philippine Nickel Industry Association indicated mine production looks set to ramp up in 2020, but constraints, such as government-imposed mining curbs, will limit growth. Bravo added mining volume most likely peaked with 2014’s record-setting high of 50 million tons.

The Philippines produced 11.31 million tons of nickel during the first half of 2019, up by 3% compared with the first half of 2018, Reuters reported.

Domestic Stainless Steel Market

Source: MetalMiner data from MetalMiner IndX(™)

Stainless 304 and 316 NAS surcharges increased in August due to sizable nickel price increases. Next month’s MMI looks set to show a greater impact from surcharges than they showed in August.

What This Means for Industrial Buyers

MetalMiner’s stainless steel price index hit near a five-year high, rising to a value not seen since November 2014’s value of 92. As indicated last month, prices appear speculatively high; premium prices also surged.

Therefore, industrial buyers need to stay alert for the right opportunity to buy.

Buying organizations interested in tracking industrial metals prices with greater ease will want to request a demo of the MetalMiner Insights platform.

Buying organizations seeking more insight into longer-term steel price trends should read MetalMiner’s Annual Metal Buying Outlook.

Looking for metal price forecasting and data analysis in one easy-to-use platform? Inquire about MetalMiner Insights today!

Actual Stainless Steel Prices and Trends

Once again, nickel prices registered double-digit increases for the monthly index reading.

The LME primary three-month nickel price increased by 28.5% to $18,475/mt. China’s primary nickel price increased by 25.9% to $20,601/mt. India’s primary nickel price increased by 24.1% to $17.99/kilogram.

The U.S. 316 and 304 Allegheny Ludlum stainless surcharges increased by 14.1% and 16.6%, respectively, to $1.00/pound and $0.69/pound.

More than half of the prices in the index dropped, albeit mildly compared with the price increases.

Chinese Ferro Alloys FeMo lumps dropped by 4.7% this month, while FeCr lumps dropped by 4%.

Chinese 316 and 304 stainless steel scrap prices both dropped 4%, down to $1,827/mt and $1,401/mt, respectively.

Chinese 304 CR stainless steel coil increased 4.4% to $2,259/mt, while 316 CR coil dropped by 0.8% to $3,081/mt.

Korean prices for 430 CR 2B stainless steel coil and 304 CR 2B stainless coil both decreased by 2.2%, down to $1,195/mt and $2,101/mt, respectively.

The Aluminum Monthly Metals Index (MMI) dropped again this month, falling by one point to 83.

All but one of the prices tracked for the index dropped this month, with India’s primary cash price showing the biggest drop at 4.4%, followed by the LME primary 3-month price (down by 3.4%).

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LME aluminum prices weakened into early August and moved sideways until early September, when prices moved toward the $1,800/mt range.

Source: MetalMiner analysis of London Metal Exchange (LME) and FastMarkets.

SHFE Aluminum Prices Gained Recently, But Momentum Looks Weak

Source: MetalMiner analysis of Fastmarkets

SHFE aluminum prices increased recently, but upward momentum still looks weak, comparatively speaking.

Overall, the price is still moving in a sideways band below the CNY 14,500/mt level where it has traded during the past year or so; however, it looks set to break through this resistance price soon.

As reported by MetalMiner’s Stuart Burns, China’s top state primary aluminum producer, Chalco, reported an 8% drop in output for the first half of the year, compared with the same period of 2018. Primary aluminum production totaled 1.89 million tons, compared to 2.06 million tons during the first six months of 2018.

Additionally, outages brought output down temporarily, including flooding at Hongqiao. As a result of the outages, exports dropped to the lowest level since February. According to Reuters, exports dropped to 466,000 tons in August, down around 10% when compared with August 2018.

Global Demand Weakness Continues

While demand in the United States remained relatively stable, demand in other regions looks weaker.

Norsk Hydro recently announced plans to close some aluminum foil production in Germany as part of restructuring efforts aimed at increasing the profitability of its rolled products business.

Novelis’ Acquisition of Aleris Under Scrutiny

The U.S. Justice Department filed a lawsuit objecting to Novelis Inc.’s purchase of Aleris Corporation on Sept. 4 due to concerns over higher future prices for automotive aluminum sheet.

According to an issued statement, competition would be hindered, with Novelis controlling 60% of projected domestic capacity.

U.S. Aluminum Premiums

The U.S. Midwest Premium remains at around $0.18/pound.

What This Means for Industrial Buyers

The sideways to bearish market for aluminum led to the index decline. Buying organizations will need to pay careful attention to short-, medium- and long-term buying signals.

Buying organizations interested in tracking industrial metals prices with ease should request a demo of the MetalMiner Insights platform.

Buying organizations seeking more insight into longer-term steel price trends should read MetalMiner’s Annual Metal Buying Outlook.

Free Partial Sample Report: 2020 MetalMiner Annual Metals Outlook

Actual Metal Prices and Trends

European commercial 1050 sheet increased by 1.3% to $2393/mt. European 5083 plate dropped by 2.1% to $2,729/mt.

India’s primary cash price dropped by 4.4% to $1.94/kilogram.

The LME primary 3-month price dropped by 3.4% to $1,746/mt.

Korean commercial 1050 sheet, 5052 coil premium over 1050, and 3003 coil premium over 1050 all decreased by less than 1%, to $2.96, $3.12 and $3.00 per kilogram, respectively.

Chinese prices all declined by under 1%. Aluminum billet priced at $2,061/mt, while bar priced at $2,729/mt. China’s aluminum scrap price dropped the most, by 0.9%, to $1,813/mt. The primary cash price stayed essentially flat at $2,015/mt.

The Raw Steels Monthly Metals Index (MMI) dropped more significantly compared to last month’s one-point decline, this month falling by four points to 70. Global prices looked weak overall; however, U.S. futures spot prices increased, along with U.S. shredded scrap prices.

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U.S. steel price increases lost momentum in August, as prices for HRC, CRC, HDG and plate all moved more or less sideways.

Source: MetalMiner data from MetalMiner IndX(™)

U.S. capacity utilization fell below 80% recently. Capacity utilization dropped to 78.8% during the week ending Sept. 7, with 1.835 million net tons produced, compared with 1.866 million net tons the week prior. This represented a 1.7% decline compared with the same period last year, according to the American Iron and Steel Institute (AISI).

U.S. shredded scrap prices increased by 14.4% to $294/st, reflecting the shift of production methods toward electric arc furnace (EAF).

Chinese HRC, CRC Prices Move Sideways Once Again

Chinese HRC and CRC prices continued to move sideways overall in August. CRC prices once again increased, while HRC prices moved lower, although neither moved with much power. The spread between HRC and CRC prices increased once again this month after hitting a two-year low a couple of months ago.

Global Production Increases Mildly; Production Drop in China

According to the most recent data available from the World Steel Association (WSA), global production of steel totaled 156.7 million tons in July, up by 1.7% compared to last year. U.S. production totaled 7.5 million tons during July 2019, up by 1.8% compared to July 2018.

China produced 85.2 million tons of steel in July, up by 5% compared to July 2018. However, production dropped compared with June, marking the second straight month of falling production. China’s output in May — the peak for 2019 thus far — totaled 89.1 million tons.

What This Means for Industrial Buyers

While a few prices in the index increased this month, the majority of prices dropped, pulling the index down. However, key steel prices moved sideways.

Industrial buying organizations will still want to watch the market in September for typical seasonal price increases.

Buying organizations interested in tracking industrial metals prices with ease will want to request a demo of the all new MetalMiner Insights platform.

Buying organizations seeking more insight into longer-term steel price trends may want to read MetalMiner’s Annual Metal Buying Outlook.

Free Partial Sample Report: 2020 MetalMiner Annual Metals Outlook

Actual Raw Steel Prices and Trends

Overall, global steel prices weakened during the month of August. However, the U.S. Midwest spot price increased by 8% to $586/st. U.S. shredded scrap prices increased by 14.4% to $294/st.

Chinese prices in the index fell across the board this month. Coking coal prices fell the most — by 14% — to $238/st. Chinese iron ore prices dropped by 4%.

Chinese steel billet decreased by 9.5% to $434/st. Chinese steel slab prices dropped by 8.7% to $462/st, while Chinese HRC prices dropped by 8% to $463/st.

Korean scrap prices increased this month, somewhat reversing last month’s 8.3% decrease, up by 3.9% to $127/st. Korean pig iron fell again this month, dropping by 2.2% to $325/st.

LME billet three-month prices dropped by 9.8% $241/st.

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The Stainless Steel Monthly Metals Index (MMI) jumped six points for an August reading 75 on the back of strong nickel price gains.

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Within the Stainless MMI basket, LME nickel prices increased the most once again this month, recording a 13% increase. Rather than correcting back to pre-spike levels, traders continued to buy into the market.

Source: MetalMiner analysis of the London Metal Exchange (LME) and FastMarkets

In addition to the price rise, stock levels have also risen as a result of Chinese stockpiling activities ahead of the Indonesian export ban.

Very recent rumors of Indonesia possibly pushing up a raw ore ban created a fresh round of speculative buying activity during this past week, which gained even more steam in the first week of August.

The new export ban regulations, initially announced in 2017, will take effect by 2022. This most recent round of nickel price escalation through speculation may also spur a new round of Chinese direct investment into Indonesia (aimed at securing future stocks of the metal ore).

Source: MetalMiner analysis of the London Metal Exchange (LME) and FastMarkets

Looking at a longer-term chart, nickel prices previously spiked at various points in time. After a steep period of rising prices, we should expect to see a quick correction followed by a period of time with higher prices.

For example, it appears that a speculative price spike took the price away from fundamentals back in 2016, as called out by the rectangular box in the chart below. In that case, the price stayed higher for about six weeks before dropping back.

Source: MetalMiner analysis of the London Metal Exchange (LME) and FastMarkets

Should a steady uptick in positive trading volume continue, that would indicate the uptrend will continue. During the past week or so, we have seen lower trading volume; however, volumes still look relatively strong.

Global Demand Outlook Declines

According to Outokumpu’s Q2 results, the company saw weaker stainless steel demand heavily impacting declining sales, which dropped by around 8% compared to Q2 2018.

Difficult competitive conditions in Europe hurt sales, with that market struggling against cheap Asian imports. Permanent safeguards became effective in February, but import penetration increased back to 30%. In addition, a new quota period started July 1.

While import levels into the U.S. remain low, the company reports ongoing distributor destocking will limit volume upside in the Americas in the short term. Further, the company expects challenging conditions to continue through 2019.

The International Stainless Steel Forum (ISSF) released Q1 production figures in early July showing a 2.5% year-on-year decline in global stainless steel melt shop production.

In Europe, the decline reached 5.7%. Asian production outside of China also declined by an estimated 5.7%. The U.S. saw a decline of 2% and Chinese production declined by 1.5%.

SHFE Nickel Prices Jump

SHFE prices also reacted to the rumor regarding Indonesia’s consideration of moving up its ore export ban.

SHFE nickel prices reached a new high for 2019, in addition to a new longer-term high.

Source: MetalMiner analysis of FastMarkets

While prices increased recently, prices were much higher at previous points in time.

Most notably, nickel prices surged past $50,000/mt, or roughly around CNY 500,000/mt, and then sank back down to around $10,000/mt during a three-year period from 2006-2009, according to data from the International Nickel Study Group (INSG). At the start of that period, prices were similar to current prices and jumped about 400% in around 1 1/2 years (at the the midpoint of the aforementioned period).

On the way back down, prices stalled at the $30,000/mt level for a year during a period of historically low stocks.

Domestic Stainless Steel Market

Source: MetalMiner data from MetalMiner IndX(™)

Stainless 304 and 316 NAS surcharges nudged back up in early August, still maintaining sideways movement.

Weaker demand outweighed higher nickel prices this month as surcharges reversed.

What This Means for Industrial Buyers

MetalMiner’s stainless steel price index hit a one-year high. Industrial buyers need to stay alert for the right opportunity to buy, as nickel prices may be at a short-term speculative high that still seems to be going strong. As ingot prices rise, expect premiums to follow.

For buying guidance, including resistance and support pricing levels by metal, industrial buying organizations can request a free two-month trial to our Monthly Metal Buying Outlook report.

Buying organizations will want to read more about our longer-term steel price trends in our Annual Outlook.

Actual Stainless Steel Prices and Trends

Nickel prices registered double-digit increases this month, extending last month’s sizable gains.

The LME primary 3-month nickel price increased by 13.1% to $14,380/mt. China’s primary nickel price increased by 11.7% to $16,367/mt. India’s primary nickel price increased by 11% to $14.50/kg.

The U.S. 316 and 304 Allegheny Ludlum stainless surcharges increased this month by 4.9% and 7%, respectively, to $0.88/pound and $0.59/pound.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

Chinese Ferro Alloys FeMo lumps also jumped by 11.7% this month, while FeCr lumps increased by 0.6%, reversing mild declines for both prices last month. Other Chinese prices in the index moved sideways, with only mild price movements of under 0.5%.

Korean prices for 430 CR 2B stainless steel coil and 304 CR 2B stainless coil decreased by 5.8% and 4.5%, respectively, to $1,221/mt and $2,149/mt.

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A 15-year trade dispute between Airbus and Boeing could send copper prices skyrocketing, with an even greater impact on U.S. manufacturers than the Section 232 tariffs had on steel and aluminum. MetalMiner has long covered this current dispute between Airbus and Boeing.

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Last year, the U.S. claimed victory in the dispute, essentially setting the groundwork for retaliatory tariffs against European imports. Though it took some time to go through an appeals process, Bloomberg has reported that tariffs appear imminent and, as a result, the U.S. copper industry has been galvanized into action.

The tariffs apply to a wide range of products, including hundreds of items unrelated to airplane parts, including cheese, whiskey and wine.

However, the following copper alloys and products could face a 100% — that is not a typo — duty if coming from the E.U.:

  • 7407.10.50: Refined copper, bars and rods
  • 7407.21.90: Copper-zinc base alloys (brass), bars and rods nesoi, not having a rectangular cross section
  • 7409.11.50: Refined copper, plates, sheets and strip, in coils, with a thickness over 0.15 mm but less than 5 mm
  • 7409.21.00: Copper-zinc base alloys (brass), plates, sheets and strip, in coils.
  • 7409.29.00: Copper-zinc base alloys (brass), plates, sheets and strip, not in coils.
  • 7409.31.50: Copper-tin base alloys (bronze), plates, sheets and strip, in coils, with a thickness o/0.15 mm but less than 5 mm and a width of 500 mm or more
  • 7409.31.90: Copper-tin base alloys (bronze), plates, sheets and strip, in coils, w/thickness o/0.15 mm but less than 5 mm and a width of less than 500 mm
  • 7409.40.00: Copper-nickel base alloys (cupro-nickel) or copper-nickel-zinc base alloys (nickel silver), plates, sheets and strip, w/thickness o/0.15 mm.
  • 7409.90.90: Copper alloys (o/than brass/bronze/cupro-nickel/nickel silver), plates, sheets and strip, w/thickness o/0.15mm but less than/5 mm and width less 500 mm
  • 7410.11.00: Refined copper, foil, w/thickness of 0.15 mm or less, not backed

These alloys cover 16% of the U.S. copper market, according to the Precision Metal Forming Association, and go into a broad range of industries, including electronics, automotive, aerospace, agribusiness, defense and home appliances.

In fact, the Bureau of Economic Analysis estimates these sectors represent approximately $1.7 trillion in U.S. output annually, according to testimony delivered Aug. 5 by ABC Metals President Dan Kendall.

In the Section 232 steel and aluminum exclusion requests, some companies received exemptions where no domestic supply exists. That scenario certainly applies to some copper alloys — nobody produces the C101, C102, C103 up to C110 (oxygen-free copper) grades, nor does the U.S. cast C500 series (phosphor bronze).

The copper industry, unlike the steel and aluminum industries, has already heavily consolidated. As Kendall explained at the hearing with regard to a monopoly in copper supply:

“On July 16th, Wieland Metals, headquartered in Germany, completed its acquisition of Global Brass & Copper, the last remaining US-owned brass and copper strip manufacturer. Prior to that, on May 28, Olin Brass, a division of GBC (which was about to be acquired by Wieland), petitioned the USTR for inclusion of these metals for tariff protection that are sourced in Europe.”

Wieland has petitioned to essentially create a virtual U.S. monopoly of more than 23 copper alloys. Furthermore, Wieland has no quoted ABC Metals. (Wieland did ship 10,000 pounds, though certainly not enough to fill an order!)

Trump can’t be blamed for this set of tariffs. However, this 301 WTO case has the power to wreak havoc throughout many manufacturing supply chains.

OEM manufacturers will act quickly to reconfigure their supply chains to continue to access copper products competitively. They will likely move offshore for electronic production. In addition, the remaining domestic copper suppliers will raise prices because they can.

Product substitution in copper remains limited compared to other metals, such as aluminum and steel, particularly due to the tough mechanical and chemical performance criteria demanded by consumers such as Aptiv, Lear, Molex, TE (Tyco Electronics), Ford, Chrysler, Denso, etc.; few suppliers can meet such demands.

MetalMiner gives these tariffs a 50% probability based on the USTR recommendation to the administration, expected in September.

Domestic suppliers have already raised prices.

We remind readers, however, that nothing kills high prices like high prices.

Monopoly Pricing on the Horizon?

The Copper Monthly Metals Index (MMI) moved sideways in July, maintaining its value of 74.

While prices in the index lost some value, the declines were modest.

LME copper prices moved firmly sideways since early June. In July, the price hit a brief low of $5,823/mt and a brief high of $6,067/mt, trading within a band between $5,850/mt and $6,050/mt during most of the month.

Source: MetalMiner analysis of London Metal Exchange (LME) and FastMarkets

Copper tends to be a beacon for industrial metals trading, typically experiencing more pricing volatility due to macroeconomic conditions than other metals.

With the trade uncertainty around the U.S.-China relationship following the U.S. announcement of more tariffs, the copper price reacted and dropped in early August.

What This Means for Industrial Buyers

Trade conditions deteriorated somewhat in early August on the heels of the latest U.S. announcement of tariffs on an additional $300 billion in Chinese goods. As a beacon industrial metal, copper prices reacted by dropping.

Meanwhile, the U.S. implementation of 301 WTO tariffs of up to 100% on European copper product imports may result in serious ramifications for copper prices and related industrial organization needs.

In light of the shifting trade environment, industrial buyers will need to keep on their toes in August and as we move into the annual planning season for industrial metals buying.

It’s important for buying organizations to understand how to react to copper price movements. The MetalMiner Monthly Metal Buying Outlook report helps buyers understand the copper marketplace.

Actual Copper Prices and Trends

­­­Copper prices across the index weakened slightly this month.

The Indian copper cash price dropped 1.7% to $6.42 per kilogram.

Korean copper strip dropped 1.4% to $8.17 per kilogram.

U.S. prices in the index decreased in the range of 1.6%-1.7%, offsetting last month’s gains of a similar magnitude. U.S. producer copper grade 110 decreased to $3.43 per pound, grade 102 priced at $3.62 per pound and grade 122 at $3.43 per pound.

Chinese prices decreased in the range of 0.3%-1.7%. China’s copper wire price dropped by 1.3% to $6,802/mt. The primary cash price dropped 1.7% to $6,779/mt. Copper bar dropped by 1.7% to $6,767/mt.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

Chinese scrap copper #2 decreased by 0.3% to $5,577/mt.

The Japanese primary cash price decreased by 0.4% to $6,138/mt.

The LME primary 3-month price decreased by 0.5%, falling to $5,950/mt.

The Raw Steels Monthly Metals Index (MMI) fell one point this month for an August reading of 74.

Small price increases for some metals did not outweigh a few steeper price drops, bringing the index down for the month.

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U.S. steel prices seemed to find a bottom recently (at least for HRC, CRC and HDG). Plate prices stopped dropping and moved sideways with the most recent price changes.

Source: MetalMiner data from MetalMiner IndX(™)

Chinese HRC and CRC Prices Move Sideways

Source: MetalMiner data from MetalMiner IndX(™)

Chinese HRC and CRC prices continued to move sideways this month. However, CRC prices showed more strength, with another modest increase in early August, while HRC prices declined slightly as August started, reversing the recent mild uptick that occurred in July.

U.S. HRC and Chinese HRC Prices Start to Diverge Again

Source: MetalMiner data from MetalMiner IndX(™)

Since peaking in mid-2018, the spread between U.S. and Chinese HRC prices began to narrow. The spread hit its narrowest point in about 1.5 years last month when it dropped to a difference of around $37/st — the third-lowest value since January 2014.

The recent increase in U.S. prices increased the spread once more, but it remains low at just $70/st. This does not yet reflect the recent devaluation of China’s currency back to the range of CNY 7-to-1, which should further increase the steel price spread (unless Chinese prices start to rise to a greater extent than U.S. prices).

Source: MetalMiner data from MetalMiner IndX(™)

Chinese and U.S. CRC prices moved more similarly, overall, with both prices increasing again of late.

Similar to HRC, the spread between prices closed quite a bit, but a larger spread remains for CRC. The spread between the two CRC prices currently measures $158/st, up slightly from around $149/st last month — the lowest values seen since late 2017.

What This Means for Industrial Buyers

The global steel prices tracked by the index once again showed mixed performance this month.

The U.S. Midwest HRC futures spot price increased slightly, turning around after last month’s decline. The U.S. Midwest HRC futures 3-month price increased once again this month. China saw mixed price signals, with some prices up and others down.

With prices giving sustained mixed signals, industrial buying organizations seeking more pricing guidance should try a free two-month trial of our Monthly Metal Buying Outlook report.

Buying organizations will want to read more about longer-term steel price trends can do so with the Annual Outlook.

Free Sample Report: Our Annual Metal Buying Outlook

Actual Raw Steel Prices and Trends

Prices in the index showed mixed performance this month.

Korean prices showed a clear drop. Korean standard scrap steel prices dropped by 8.3% to $122/st and pig iron prices fell by 2.6% to $332/st.

Chinese price movements remain mixed. Chinese steel slab prices increased the most (by 3.2% to $489/st). Chinese HRC prices increased by 1.3% to $479/st.

Chinese steel billet decreased by 2.7% to $470/st and coking coal prices dropped by 1.1% to $278/mt. Chinese iron ore prices edged down slightly, by less than 0.5%.

U.S. shredded scrap prices fell by 6.2% to $257/st, while U.S. Midwest futures 3-month price increased by 3.2% to $619/st.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

LME billet 3-month prices dropped 2.7% $268/mt.

The Aluminum Monthly Metals Index (MMI) dropped two points this month to 84. Most of the prices tracked for the index dropped this month, with European prices dropping the most (by close to 7.5%). 

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LME aluminum prices fared best of all of the aluminum prices this month, posting a mild increase of less than 1%. Aluminum prices continued to move sideways in July, generally trading above $1,800/mt.

However, the price ended July weaker, then dropped — along with most industrial metals —  following the U.S. announcement of $300 million in new tariffs on China (effective Sept. 1).

Source: MetalMiner analysis of London Metal Exchange (LME) and FastMarkets

SHFE aluminum prices moved sideways recently, but with some upward momentum evident and higher lows throughout the year.

Source: MetalMiner analysis of Fastmarkets

China produced 2.97 million tons of aluminum in June, down slightly from May’s production of 2.98 million tons. However, the June total was still up year on year by 1.3% up over May on a daily average basis, according to Reuters calculations. In May, production averaged 96,000 tons per day, and rose to 99,000 tons per day in June.

China’s higher daily production levels followed a jump in prices during May to around CNY 14,350/mt, which helped turned margins positive again for some smelters and fueled a production ramp-up.

China’s Zhongwang Holdings and its controlling shareholder, Liu Zhongtian, were recently charged with evading $1.8 billion in tariffs on aluminum imports. The company allegedly disguised the aluminum as pallets in order to evade the duties on U.S. imports from China.

Novelis Announces New High-Strength Automotive Aluminum Product

Novelis recently announced a new high-strength aluminum product for next-generation automotive body sheet design called AdvanzTM 6HS-s650.

According to the company, the advanced aluminum offers improved strength, lightweighting capabilities, formability, performance and structural integrity. The company estimates a 15-25% improvement over existing high-strength aluminum alloys. Compared with steel in similar applications, the end-weight outcome can be improved by 45%.

Novelis’ acquisition of Aleris faced new hurdles this month. European Union competition authorities required Novelis to offer concessions by Aug. 9. to gain approval for the $2.6 billion takeover.

U.S. Aluminum Premiums

The U.S. Midwest Premium dropped once again, but only slightly, to $0.17/lb. Softer demand in the U.S. still fails to offset supply tightness in the market, keeping premiums higher.

Source: MetalMiner Ind(X)SM

What This Means for Industrial Buyers

Demand weakness in most markets impacted the index this month. While macroeconomic uncertainty due to the latest trade situation recently impacted some prices, in the case of the weakening index, this came from a genuine downturn in demand.

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Actual Metal Prices and Trends

This month European prices decreased after increasing by around 2% last month. European commercial 1050 sheet and 5083 plate both dropped by 7.4% to $2,364/mt and $2,788/mt, respectively.

Korean prices also reversed and decreased this month after increasing in the 2% range in June. Korean commercial 1050 sheet, 5052 coil premium over 1050, and 3003 coil premium over 1050 all decreased in the range of 3-4% to $2.98, $3.15 and $3.02 per kilogram, respectively.

India’s primary cash price dropped by 2.9% to $2.03 per kilogram.

Chinese price movements were mixed and mild, holding essentially flat.

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The LME aluminum price gained the most, rising 0.8% to $1,807/mt.

The Stainless Steel Monthly Metals Index (MMI) bounced back this month, rising two points to 69 after last month’s two-point drop.

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Movements of individual prices within the index were mixed.

LME nickel prices increased the most among price points in the index, up by 6.8% month over month. After June’s trend toward higher prices, the price dropped around July 1, then surged again and is essentially moving sideways at this time.

Source: MetalMiner analysis of the London Metal Exchange (LME) and FastMarkets

In June, rainy weather brought widespread flooding to Indonesia’s nickel hub on Sulawesi island. Estimates indicate a production shortfall of between 50,000-100,000 tons of nickel ore as a result, according to Indonesia’s Nickel Miners Association in press reports.

According to the latest numbers published by the International Nickel Study Group (INSG), as reported by Reuters, the supply deficit for the refined nickel market came in at 27,000 tons for the first four months of the year, down from 59,000 tons during the same period in 2018. The most recent INSG projections indicate the supply gap will close during the second half of 2019.

Domestic Stainless Steel Market

Source: MetalMiner data from MetalMiner IndX(™)

Stainless 304 and 316 NAS surcharges fell again this month, now similar to surcharge rates at the start of the year. Surcharges are still above 2016 lows and are still moving within the sideways band that formed in December 2016. Should the supply gap close as projected, this may cause surcharges to fall even further.

What This Means for Industrial Buyers

Stainless price performance was mixed this month, as primary nickel prices rose while stainless surcharges dropped once again.

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Buying organizations will want to read more about our longer-term steel price trends with our Annual Outlook.

Actual Stainless Steel Prices and Trends

The U.S. 316 and 304 Allegheny Ludlum stainless surcharges dropped again this month — by 6% and 9%, respectively, to $0.83/pound and $0.56/pound.

Meanwhile, nickel prices were up quite a bit. The LME primary 3-month price increased by 6.8% to $12,710/mt. China’s primary nickel price increased by 4.27% to $14,658/mt. India’s primary nickel price increased by 4.3% to $13/kilogram.

Chinese nonferrous FeCr lumps decreased by 3% to $1,595/mt and FeMo lumps dropped by 2.3% to $17,548/mt.

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The remaining prices in the index generally increased mildly, between 0.6% and 1.9% (with the exception of Chinese 316 stainless scrap, which declined by 0.4% to $1,908/mt).

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The Raw Steels Monthly Metals Index (MMI) fell slightly this month, following last month’s more significant decline. The index came in at 75 this month, down one point from the previous month.

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U.S. steel prices continued their clear drop this month, with prices dropping for HRC, CRC, HDG and plate.

Source: MetalMiner data from MetalMiner IndX(™)

HRC prices dropped by around 12% over the course of June, the steepest price decline in the Raw Steels basket of metals. HDG dropped by around 7%. CRC and plate prices dropped by 5% and 4%, respectively.

Recently, the American Iron and Steel Institute (AISI) reported that U.S. steel production capacity utilization reached 79.4% during the week ending on July 6, up from 77.4% one year ago. Capacity utilization decreased from the prior week by 0.2%.

Production totaled 1.85 million tons for the week, with year-to-date production at 50.46 million net tons based on a capacity utilization of 81.2%. So far this year, production numbers increased by 5.3% compared to the same period last year.

According to the most recently published U.S Census Bureau numbers, May steel imports dropped to a value of $1.9 billion, compared with $2.5 billion in April. In May, imports totaled 1.9 million metric tons compared to 3 million metric tons in April. Imports of blooms, billets and slabs dropped during May, while imports of reinforcing bars, sheets and strip, and heavy structural shapes increased.

Through the first four months of the year, imports totaled 10.4 million metric tons, down from 11.3 million metric tons during the same period of 2018. While imports of hot-rolled and cold-rolled sheets fell, imports of blooms, billets and slabs increased compared with the same period last year.

The U.S. Department of Commerce ruled July 8 in favor of duties on structural steel imports from China and Mexico based on the argument that the imports benefited from state subsidies. Meanwhile, the Department of Commerce made a negative determination with respect to imports of fabricated structural steel from Canada, finding Canadian exporters benefited from countervailable subsidies ranging from 0.12-0.45%.

Chinese HRC, CRC Prices Moving Sideways

Source: MetalMiner data from MetalMiner IndX(™)

Rather than continuing to drop, prices of HRC and CRC increased slightly this month; however, they did not fully recover from the previous month’s price drops. HDG and plate prices, meanwhile, continued to drop into early July.

The Chinese government’s stimulus measures, combined with additional capacity closures, appear to be supporting some prices at this time.

Reuters recently reported Hebei, China’s top steelmaking province, moved up its December 2019 capacity cut targets by two months to the end of this October, according to provincial authorities.

Coal and coke will also see planned reductions of 10 million tons and 3 million tons, respectively. as authorities continue to work on improving air quality. Last year, around 12 million tons of steel capacity, along with some coal and coke capacity, were eliminated in the region and some cities closed steel production.

Regardless, Chinese steel output in aggregate continues to rise in 2019, as demonstrated by the production volume statistics published by TradingEconomics.com. Figures indicate steel production hit a new monthly high in May of around 89.1 million tons, up from the then-monthly high in April of 85 million tons.

With iron ore prices still high and representing around 30% of the price of steel, this may also provide some support to Chinese steel prices.

What This Means for Industrial Buyers

The global steel prices tracked by the index showed mixed performance this month, with U.S. prices showing the greatest weakness.

The U.S. Midwest HRC futures spot price dropped significantly, while the U.S. Midwest HRC futures 3-month price increased, showing some bullishness despite currently falling prices.

With prices giving mixed signals, industrial buying organizations seeking more pricing guidance should request a free two-month trial of our Monthly Metal Buying Outlook report.

Buying organizations will also want to read more about longer-term steel price trends can do so with MetalMiner’s Annual Outlook.

Actual Raw Steel Prices and Trends

Once again, U.S. prices registered the largest price decrease this month.

The U.S. Midwest HRC futures spot price dropped by 7.6% on a month-over-month basis to $536/st, while the U.S. shredded scrap price dropped by 7.1% to $274/st.

In contrast, the U.S. Midwest HRC futures 3-month price increased by 2.4% to $600/st.

Korean standard scrap steel prices increased by 5% to $133/st. Korean pig iron prices increased by 1.9% to $341/st.

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China’s HRC price fell by 3.5% to $497/st and steel slab dropped by 1.5% to 490/st, while other Chinese prices in the index increased. Steel billet increased by 2% to $493/mt, while the remaining Chinese prices increased in the range of 0.5% to 1%.