Author Archives: Fouad Egbaria

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This morning in metals news, a Turkish conglomerate is reportedly ready to step into the British Steel process if Jingye Group’s takeover effort falls apart, copper prices fell to a two-week low and an Indonesian company aims to augment its aluminum production.

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Cengiz reportedly ready if Jingye’s British Steel bid falls apart

As Chinese firm Jingye Group attempts to push through its takeover bid of the liquidated British Steel, Turkish conglomerate Cengiz Holdings is ready to step in if talks fall apart, The Guardian reported.

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The International Copper Study Group (ICSG) reported global copper mine production fell 0.3% through the first 10 months of 2019.

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According to the ICSG, concentrate production during the period was flat, while solvent extraction-electrowinning fell 1%.

Production in Chile declined 0.2%, according to the ICSG, as a result of lower copper head grades and production disruptions earlier in the year.

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The U.S. steel sector reached a capacity utilization rate of 82.3% for the year through Jan. 18, according to the American Iron and Steel Institute (AISI).

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Production for the year to date reached 4.94 million tons, up 2.6% from production during the same period last year (when capacity utilization rate reached 80.4%).

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This morning in metals news, BHP released its half-year production results, the GFG Alliance unveiled a new aluminum group and copper prices have been on the rise early this year.

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BHP’s copper production rises 7%

Miner BHP released its production results for the half year ending Dec. 31, 2019, showing its copper production ticked up 7% on a year-over-year basis.

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December proved to be a fruitful month for U.S. housing starts, which reached their highest level since 2007.

The new data came the same day the Federal Reserve reported manufacturing production had ticked up slightly in December.

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Housing starts rise 16.9%

According to data released by the U.S. Census Bureau and the Department of Housing and Urban Development, privately owned housing starts in December reached a seasonally adjusted annual rate of 1,608,000, up 16.9% from the previous month. December starts were up by an even larger percentage on a year-over-year basis (40.8%).

Broken down further, single-family housing starts reached a seasonally adjusted annual rate of 1,055,000 in December, up 11.2% from the previous month.

Meanwhile, the rate for units in buildings with five units or more reached 536,000.

Overall, housing starts in 2019 reached their highest level since 2007, according to Census Bureau historical data.

U.S. housing starts from 2007-2019 (data from the U.S. Census Bureau)

Housing starts plummeted after the 2008 financial crisis, down from 1,355,000 in 2007 to 905,500 in 2008 and 554,000 in 2009.

After 2009, housing start activity gradually returned, crossing the 1 million start threshold in 2014.

Low mortgage rates have in part contributed to the rise. According to Freddie Mac, 30-year fixed-rate mortgages averaged 3.74% in 2019, the lowest annual average rate since the company began issuing its weekly survey on mortgage rates.

Building permits down 3.9%

Housing units authorized by permits reached a rate of 1,416,000 in December, down 3.9% from the previous month but up 5.8% on a year-over-year basis.

Permits for single-family homes reached a rate of 916,000, down 0.5% from the previous month, while permits for units in buildings with five units or more hit a rate of 458,000.

Overall, permits increased in 2019 compared with the previous year. In 2019, approximately 1,289,800 units were authorized by building permits, marking a 3.2% increase from the previous month.

Housing completions rise

Housing completions were also up in December, hitting a seasonally adjusted annual rate of 1,277,000, which marked a 5.1% increase from the previous month and a 19.6% increase from December 2018.

Single‐family housing completions in December hit a rate of 912,000, up 0.7% from November. For units in buildings with five units or more, the rate reached 357,000.

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An estimated 1,250,600 housing units were completed in 2019, which marked a 5.6% increase from 2018.

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This morning in metals, miner Rio Tinto recently released its Q4 production results, China unveiled new copper scrap and aluminum scrap regulations, and China’s Jingye Group has called on consultants to help strengthen its case for its British Steel takeover plans.

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Rio Tinto’s iron ore shipments down 3%

Rio Tinto’s Pilbara iron ore shipments fell 3% in 2019 compared with 2018, the company recently reported.

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According to the U.S. Federal Reserve’s latest report on industrial production, industrial production in December dipped 0.3%.

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Industrial capacity utilization dipped by 0.4 percentage point to 77.0%, which is down from the long-run average — from 1972-2018 — of 79.8%

Utilities fell 5.6% on the month, down to an index reading of 101.6% (with a reading of 100% equivalent to production in 2012) — marking its first decline since August.

“The drop for utilities resulted from a large decrease in demand for heating, as unseasonably warm weather in December followed unseasonably cold weather in November,” the Fed said.

Manufacturing ticks up in December

However, manufacturing production was up 0.2% (after rising 1.0% in November), while mining increased 1.3% after posting declines in four of the previous five months (including a 0.2% drop in November).

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals coverage here on MetalMiner, including: steel prices, commodities markets, precious metals, the U.S.-China Phase One trade deal and the Senate’s approval of the United States-Mexico-Canada Agreement.

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This morning in metals news, the U.S. plans to appeal a World Trade Organization (WTO) compliance panel ruling related to its steel dispute with India, China’s crude steel production again hit a record high in 2019 and General Motors announced plans to invest $40 million at its Spring Hill Global Propulsion Systems plant in Tennessee.

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U.S. will appeal WTO compliance panel ruling

In its ongoing dispute with India over its tariffs on Indian hot-rolled carbon steel, the U.S. plans to appeal a WTO compliance panel ruling.

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The successor to the 1994 North American Free Trade Agreement, dubbed the United States-Mexico-Canada Agreement (USMCA), has now made its way through both chambers of the U.S. Congress.

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In December, the White House and House Democrats reached a deal over revisions to the USMCA, yielding an overwhelmingly bipartisan 385-41 vote Dec. 19 that sent the deal over to the Senate.

On Thursday, the Senate voted 89-10 to approve the USMCA via the United States-Mexico-Canada Agreement Implementation Act. Sen. Pat Toomey was the only dissenting Republican vote.

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