Author Archives: Fouad Egbaria
thanksgiving

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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 industrial production figures, aluminum analysis and much more:

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

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

Norsk Hydro

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This morning in metals news: Norsk Hydro recently resumed production at its Husnes aluminum plant; the Census Bureau recently released the latest data on new housing starts; and copper prices continue to rise.

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Norsk Hydro resumes production at Husnes B-line

Oslo-based Norsk Hydro announced the restarts of production at its Husnes aluminum plant after having operated at half capacity since 2009.

The A-line at Hydro’s Husnes plant produces about 95,000 tonnes of aluminum annually. Hydro added it will ramp up output to around 195,000 tonnes as it restarts 200 electrolysis cells in the one-kilometer-long B line.

Hydro President and CEO Hilde Merete Aasheim said the restarts are based on a “combination of increased demand for aluminum and expectations that Norway will continue to utilize EU’s emissions trading system (ETS) for 2021-2030.”

Strong October for housing starts

In addition to the Norsk Hydro news, U.S. housing starts reached a seasonally adjusted annual rate of 1.53 million in October. The October rate marked a 4.9% increase from September.

Furthermore, the October rate marked a 14.2% increase year over year.

Meanwhile, single-family housing starts in October hit a rate of 1.18 million, up 6.4% from September.

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steel

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This morning in metals news: the U.S. steel capacity utilization rate reached 71.5% last week; the Energy Information released its monthly energy review; and the nickel price continues to move upward.

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Steel capacity utilization rate hits 71.5%

The U.S. steel capacity utilization rate hit 71.5% for the week ended Nov. 21, the American Iron and Steel Institute (AISI) reported.

U.S. steel output for the week totaled 1.58 million net tons, up 0.1% from the previous week but down 13.2% year over year.

For the year through Nov. 21, U.S. output totaled 70.5 million net tons, down 18.6% year over year.

EIA releases monthly energy review

Aside from steel capacity utilization, the EIA released its Monthly Energy Review today, reporting total energy production of 64.46 quadrillion btu through the first eight months of the year.

Fossil fuel production totaled 50.93 quadrillion btu during the period. Meanwhile, nuclear energy production reached 5.57 quadrillion btu and renewable energy production totaled 7.96 quadrillion btu.

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copper smelter

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Earlier today we touched on aluminum prices — well, the copper price is similarly ascendant.

The copper price has, as we’ve mentioned on multiple occasions, been supported by a recovering Chinese economy.

Furthermore, according to data released Monday by the International Copper Study Group (ICSG), global copper production declined over the first eight months of the year.

Stop obsessing about the actual forecasted copper price. It’s more important to spot the trend. See why.

Copper price rises to 2020 high

The LME three-month copper price closed last week at $7,195 per metric ton, its high for 2020.

In addition, the price point in fact marked its highest since early 2014.

How much further can it go? Certainly, markets at large and metals in particular — including copper — showed upward momentum after recent announcements of potentially effective COVID-19 vaccines from Pfizer and Moderna.

As Maria Rosa Gobitz explained in this month’s Copper Monthly Metals Index (MMI) report, copper prices could continue to go up. In fact, according to investment bank Goldman Sachs, copper could rise to $7,500 per metric ton by this time next year.

While it’s still early to say, with the copper price already approaching the $7,200 mark, $7,500 next year is not out of the question. The LME three-month copper last reached the $7,500 per metric ton mark in spring 2013.

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As we noted yesterday, aluminum prices have continued to rise — this in spite of increasing global aluminum production.

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Global aluminum production rises 3.5%

According to the latest data from the International Aluminum Institute, global aluminum production rose 3.5% in October from the previous month.

October output reached 5.59 million metric tons, up from 5.40 million metric tons in September.

Global aluminum production rose 4.5% year over year from 5.35 million metric tons in October 2019.

China output chugs along

Meanwhile, aluminum production in China totaled an estimated 3.23 million metric tons in October, up from 3.13 million metric tons the previous month.

Furthermore, China’s production reached 2.98 million metric tons in October 2019.

Despite gains in output, the aluminum price has continued to rise. Since the LME three-month price’s April trough, aluminum is up 37%.

As MetalMiner’s Stuart Burns explained last week, China’s metals demand has supported prices this year, even as other economies are not quite as far along in their respective economic recoveries.

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antidumping duty

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The United States International Trade Commission (USITC) last week voted to maintain antidumping duties on non-oriented electrical steel.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

USITC rules in five-year sunset review on antidumping duties

The USITC conducted a five-year sunset review of antidumping duties on non-oriented electrical steel (NOES). The review covered imports from China, Germany, Japan, Korea, Sweden and Taiwan.

Manufacturers use NOES in such applications as electric generators and motors.

Last week, the USITC said revoking the duties would likely result in “continuation or recurrence of material injury.”

Furthermore, the UISTC opted to maintain existing countervailing duties on imports from China and Taiwan.

Per the Uruguay Round Agreements Act, the Department of Commerce must revoke an antidumping duty or countervailing duty order after five years unless doing so would lead to “continuation or recurrence of dumping or subsidies” and “of material injury … within a reasonably foreseeable time.”

The USITC initiated the review process Nov. 1, 2019.

However, the initial investigation began in 2013 after AK Steel filed petitions with the Department of Commerce and USITC.

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aluminum price

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This morning in metals news: the LME three-month aluminum price has continued to rise in the leadup to the Thanksgiving holiday; Rio Tinto signed a new agreement to strengthen its partnership with China’s Tsinghua University; and, lastly, New York state is one of the U.S. leaders in renewable energy generation.

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LME three-month aluminum prices gains

Like other metals, the LME three-month aluminum price has showed significant upward momentum this year.

The LME-three month aluminum price closed last week at $1,995 per metric ton. Aluminum is up 8.22% from the previous month.

Furthermore, since its April trough, the price has increased 37%.

Rio Tinto strengthens partnership with Tsinghua University

Miner Rio Tinto announced it is strengthening its partnership with China’s Tsinghua University.

The firm said it is committing an additional 30 million yuan ($4.5 million) over the next five years to support research projects at the Tsinghua-Rio Tinto Joint Research Centre for Resources, Energy and Sustainable Development.

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The Federal Reserve reported October 2020 industrial production rose 1.1%.

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October 2020 industrial production rises

Per the Fed, October 2020 industrial production rose but remained 5.6% lower than the pre-pandemic level in February.

However, the Fed also noted the industrial production index has recovered most of the 16.5% decline posted from February to April.

Manufacturing gains

As the U.S. continues to battle the pandemic and its impacts across the board, manufacturing showed positive signs in October.

Manufacturing output ticked up 1.0% last month after a 0.1% increase in September.

Nonetheless, the sector still has a ways to go. Manufacturing output in October remained 5.0% below its February level.

Manufacturing capacity utilization rose 0.7 percentage point to 71.7%, up 11.6 percentage points from April. However, the rate remained 6.5 points below the long-run average (1972-2019).

“The index for durable manufacturing stepped up 0.9 percent, as small drops in the indexes for furniture and related products, fabricated metal products, and motor vehicles and parts were outweighed by gains elsewhere, especially for aerospace and miscellaneous transportation equipment and for miscellaneous manufacturing,” the Fed reported.

Meanwhile, the index for nondurables ticked up by 1.2%.

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merger and acquisition

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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 storylines here on MetalMiner, including Tata Steel and its attempt to spin off its European assets, the U.S.’s rising steel capacity utilization rate, China’s economic recovery and its impact on metals prices, and much more:

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Week of Nov. 16-20 (Tata Steel looks for buyers, capacity utilization rises and more)

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LNG vessel

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This morning in metals news: miner Anglo American has signed a 10-year contract to add vessels fueled by liquefied natural gas, or LNG, to its fleet; jobless rates fell in 37 states in October; and copper prices retraced slightly.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

Anglo American welcomes new vessels fueled by LNG

Earlier this month, miner Anglo American hailed the future addition to its fleet of four new vessels fueled by LNG.

“The new build LNG vessels offer significant environmental benefits, including a c.35% cut in CO2 emissions compared to standard marine fuel, while also using new technology to eliminate the release of unburnt methane, or so-called ‘methane slip,'” the miner said in a release.

Shanghai Waigaoqiao Shipbuilding in China will build the fleet, which is expected to be delivered in 2023.

Jobless rates down in 37 states

Aside from the Anglo American LNG news, jobless rates in October fell in 37 U.S. states, according to the Bureau of Labor Statistics.

Furthermore, the national unemployment rate fell by 1.0 percentage point to 6.9%. However, the rate marked a 3.3-percentage-point increase from the October 2019 rate.

Copper falls slightly

The LME three-month copper price has been on a relentless rise since late March.

After taking somewhat of a breather in September, copper continued its ascent in October and the first half of November.

Copper closed Thursday at $7,046 per metric ton, or up 3.07% month over month. However, the price dipped a little over 1% this week after opening the week at $7,128 per metric ton.

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