Author Archives: Fouad Egbaria

imports

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This morning in metals news: U.S. import prices rose in December; the Aluminum Association commented on potential changes to the Section 232 aluminum tariff program; and November steel shipments dropped by 11.9%.

U.S. import prices gain by 0.9% in December

U.S. import prices jumped by 0.9% in December, per the Bureau of Labor Statistics. Furthermore, the December increase marked the largest jump in import prices since August.

Meanwhile, U.S. export prices rose by 1.1% after rising by 0.7% in November.

Aluminum Association calls for ‘targeted, multilateral’ approach

We previously noted several industry groups’ recent call for the incoming Biden administration to maintain existing steel tariffs and quotas.

In that vein, the Aluminum Association offered its own comments on the Section 232 aluminum tariff program.

“The Aluminum Association continues to favor a targeted approach to trade enforcement,” Aluminum Association President and CEO Tom Dobbins said in a prepared statement. “Across-the-board tariffs have failed to dent the non-market-based structural subsidies that drive overcapacity and hurt U.S. aluminum producers and workers. We look forward to working with President-elect Biden’s trade team on new, creative approaches to combat this perennial challenge, including renewed cooperation with traditional trading partners and allies.”

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Aluminum production

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This morning in metals news: Rio Tinto and Meridian Energy have reached a deal that will allow New Zealand’s Aluminum Smelter to continue operating the Tiwai Point aluminum smelter; BHP unveiled plans to build a new wind fence; and the Energy Information Administration (EIA) forecasts U.S. oil and natural gas production will fall this year.

Rio Tinto, Meridian Energy reach deal on Tiwai Point aluminum smelter

Miner Rio Tinto announced it had reached a deal with Meridian Energy that will allow New Zealand’s Aluminum Smelter to continue operating the Tiwai Point aluminum smelter until 2024.

“The extension provides certainty to employees, the local community and customers while providing more time for all stakeholders to plan for the future,” Rio Tinto said in a release.

The agreement with Meridian helps make the smelter “economically viable and competitive,” Rio Tinto added.

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BHP plans to build wind fence

On Thursday, BHP announced plans to build a wind fence as part of its Pilbara Air Quality Program.

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steel tariff

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This morning in metals news: several industry groups urged President-elect Joe Biden to continue existing steel tariffs and quotas; Germany’s OGE and Thyssenkrupp and Norwegian energy company Equinor are collaborating to mitigate emissions; and Norsk Hydro and Nuvosil are working on aluminum and silicon recycling technology.

Industry groups urge Biden to keep steel tariffs

President Donald Trump in 2018 used Section 232 of the Trade Expansion Act of 1962 to impose steel tariffs of 25%.

The steel tariffs remain in place, as does the 10% tariff on aluminum.

President-elect Joe Biden is set to take office next week. As such, many have wondered how the former vice president’s trade policy will differ from Trump’s approach.

In a joint letter, the American Iron and Steel Institute (AISI), Steel Manufacturers Association (SMA), the United Steelworkers union (USW), The Committee on Pipe and Tube Imports (CPTI) and American Institute of Steel Construction (AISC) urged Biden to keep the steel tariffs in place.

“Continuation of the [steel] tariffs and quotas is essential to ensuring the viability of the domestic steel industry in the face of this massive and growing excess steel capacity,” the statement reads.

The letter adds that removing or weakening the measures will invite a “new surge” in imports.

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OGE, Thyssenkrupp, Equinor work together to curb Duisburg emissions

According to Reuters, German firms OGE and Thyssenkrupp and Norwegian energy company Equinor will work together to curb emissions from Thyssenkrupp’s plant in Duisburg, Germany.

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cobalt

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The Renewables Monthly Metals Index (MMI) rose 2.7% this month, as Toronto-based First Cobalt signed multiple refinery feedstock agreements. (Editor’s note: This report also includes coverage of grain-oriented electrical steel, or GOES.)

January 2021 Renewables MMI chart

First Cobalt signs refinery feedstock agreements

Toronto-based First Cobalt announced Tuesday it has achieved a “key milestone” with new refinery feedstock agreements reached with Glencore AG and IXM SA.

The cobalt hydroxide deals will see First Cobalt receive a total of 4,500 tonnes per year beginning in 2022. The feedstock will come from Glencore’s KCC mine and China Molybdenum Co.’s — parent company of IXM SA — Tenke Fungurume mine.

The agreements represent 90% of projected capacity for the Canadian refinery. Furthermore, the deals will yield “22,250 tonnes per year of battery grade cobalt sulfate,” per the company’s announcement.

“This is a pivotal moment for our North American cobalt refining strategy,” First Cobalt President and CEO Trent Mell said. “Our globally competitive cost structure and industry-leading ESG credentials put us in a strong position for a rapidly growing EV market. With feedstock arrangements in place, we can continue to advance our vision to create a new cobalt supply chain in North America.

“Electric vehicle sales in Europe were up more than 100% in 2020 and the U.S. will be the next large market to take off.”

In other company news, First Cobalt signed a letter of intent with Kuya Silver Corporation to sell “a portion of its silver and cobalt mineral exploration assets in the Canadian Cobalt Camp and form a joint venture to advance the remaining mineral assets.”

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gold price

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The Global Precious Monthly Metals Index (MMI) gained 5.3% for this month’s index value, as the gold price surged to start the year but couldn’t hold onto those gains.

January 2021 Global Precious MMI

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Gold price ups and downs

Amid ongoing economic uncertainty, a falling dollar and the coronavirus pandemic, many market watchers are keenly interested in the fortunes of gold.

While numerous analysts predicted gold could reach $2,500 per ounce last year, that didn’t happen.

The gold price did reach as high as $2,034 per ounce in early August, inspiring speculation with respect to how much further the price had to run.

Gold cooled off in the ensuing weeks before heating up again throughout December and early January. The gold price reached $1,957 per ounce during the first week of January before retracing, dropping to $1,828 per ounce as of Jan. 10.

Meanwhile, the U.S. dollar — which generally correlates inversely with the gold price — hit a two-year low back in August (when gold reached its 2020 peak). From the beginning of November to early January, the dollar lost approximately 5% of its value.

However, the dollar has staged a small rally over the last week. The U.S. dollar index fell to 89.44 as of Jan. 5 before bouncing back to 90.47 on Jan. 11.

So what could drive the price this year?

“Physical demand could pick up in 2021,” MetalMiner’s Stuart Burns wrote last month. “China is forecast for potentially double-digit growth in 2021 with a strong tailwind from this year’s stimulus measures and a robust recovery in consumption.

“India, the other major physical gold market, does not look as positive. The country will likely have a slow vaccine rollout and is facing severe banking risks. That could hamper the Indian economy’s recovery in 2021. In turn, a slower recovery could impact consumer appetite for spending, with unemployment up and some sectors still struggling.”

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steel arrow up

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This morning in metals news: U.S. steel capacity utilization reached 75.4% for the week ending Jan. 9; General Motors announced the launch of BrightDrop; and Rusal America announced a new line of aluminum additive manufacturing powders.

Volatility is the name of the game. Do you have a steel buying strategy that can handle the ups and downs?

Steel capacity utilization reaches 75.4%

The U.S. steel sector’s capacity utilization rate reached 75.4% for the week ending Jan. 9, the American Iron and Steel Institute (AISI) reported.

The rate increased from 74.6% the previous week.

Production during the week ending Jan. 9 totaled 1.71 million net tons, up 3.6% from the previous week. However, output during the week declined 10.3% year over year.

General Motors launches new BrightDrop business

General Motors today announced the launch of a new business called BrightDrop, which it says will “offer an ecosystem of electric first-to-last-mile products, software and services to empower delivery and logistics companies to move goods more efficiently.”

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The Rare Earths Monthly Metals Index (MMI) gained 18.2% for this month’s index value.

January 2021 Rare Earths MMI chart

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$2.3T pandemic aid, government spending package includes rare earths research funds

Late last year, President Donald Trump signed a $2.3 trillion pandemic aid and government funding package that included more than $800 million in funds for rare earths research and development.

Trump signed an executive order in September 2020 calling out the threat to dependence on foreign sources of critical minerals. The president also signed a similar executive order in 2017 that called for the secretary of the interior to identify critical minerals. Ultimately, the process produced a list of 35 critical minerals.

Section 7001 of the 5,593-page bill outlines funding related to critical minerals.

The bill text calls for the secretary of energy to “develop and assess advanced separation technologies for the extraction and recovery 17 of rare earth elements and other critical materials from coal and coal byproducts” and “determine if there are, and mitigate, 20 any potential environmental or public health im21 pacts that could arise from the recovery of rare 22 earth elements from coal-based resources.”

The bill called for authorization to appropriate $23 million for the aforementioned efforts in fiscal years 2021 and 2022.

MP Materials revenue rises 52%

In late November, California-based MP Materials released its Q3 and year-to-date financial results.

The firm announced Q3 revenue of $41 million, marking a 52% year-over-year increase.

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copper mine

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This morning in metals news: Turquoise Hill Resources offered an update on the Oyu Tolgoi copper mine expansion project; renewable power generation will continue to rise this year in the U.S.; and the aluminum price has traded sideways over the last month.

Are rising MW premiums causing concern? See how service centers take advantage of that.

Oyu Tolgoi copper mine project in danger

The fate of the Oyu Tolgoi copper mine expansion project is up in the air, as it could face termination from the Mongolian government.

Turquoise Hill Resources, which is majority-owned by miner Rio Tinto, jointly owns the massive project with the Mongolian government. The parties reached a financing plan for the project in 2015.

However, the Mongolian government appears to be concerned about runaway costs for the project.

“In addition, the Government of Mongolia has advised Rio Tinto that it is dissatisfied with the results of the Definitive Estimate, which was completed and delivered by Rio Tinto and publicly announced by the Company on December 18, 2020, and is concerned that the significant increase in the development costs of the Oyu Tolgoi project has eroded the economic benefits it anticipated to receive therefrom,” Turquoise Hill said in a statement. “The Government of Mongolia has indicated that if the Oyu Tolgoi project is not economically beneficial to the country, it would be necessary to review and evaluate whether it can proceed.”

Renewables continue to rise

Renewable sources account for the most new electricity-generating capacity this year, the Energy Information Administration reported.

“According to the U.S. Energy Information Administration’s (EIA) latest inventory of electricity generators, developers and power plant owners plan for 39.7 gigawatts (GW) of new electricity generating capacity to start commercial operation in 2021,” the EIA reported. “Solar will account for the largest share of new capacity at 39%, followed by wind at 31%. About 3% of the new capacity will come from the new nuclear reactor at the Vogtle power plant in Georgia.”

Aluminum trends flat

After surging throughout most of the second half of 2020, the aluminum price has slowed down of late.

The LME three-month aluminum price is up just 0.22% over the last month. The price closed Friday at $2,032 per metric ton.

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E.U. flag

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This morning in metals news: new E.U. duties on iron and steel imports from Turkey take effect today; meanwhile, the Aluminum Association commented on President-elect Joe Biden’s nomination for the post of secretary of commerce; and natural gas prices fell to their lowest levels in decades last year.

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.

E.U. duties on Turkish iron, steel

E.U. duties on Turkish iron and steel imports are set to take into effect today, Reuters reported.

According to the report, the anti-dumping duties will range from 4.8-7.6%.

Meanwhile, the European Steel Association (Eurofer) in May 2020 filed the initial complaint that sparked the probe. In September 2020, Eurofer petitioned for the registration of Turkish hot-rolled steel imports.

Elsewhere, MetalMiner contributor Christopher Rivituso earlier this week surveyed the Turkish steel market.

Aluminum Association comments on Biden’s pick to lead DOC

On the heels of President-elect Joe Biden’s announcement that he intends to nominate Rhode Island Gov. Gina Raimondo for the post of secretary of commerce, the Aluminum Association released a statement.

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U.S. trade

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This morning in metals news: the Census Bureau and Bureau of Economic Analysis reported the U.S. goods and services deficit totaled $68.1 billion in November; the Brazilian state of Minas Gerais is hoping to win a compensation deal from miner Vale; and the American Iron and Steel Institute released steel import data for December.

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Goods and services deficit reaches $68.1B

The U.S. goods and services deficit reached $68.1 billion in November, the Census Bureau and BEA reported.

The deficit jumped from $63.1 billion in October.

Brazilian state aims to win settlement from miner over 2019 dam disaster

The Brazilian state of Minas Gerais is in talks over a settlement deal with miner Vale vis-a-vis the fatal Brumadinho tailings dam collapse in 2019, Reuters reported.

Per Reuters, the state is seeking a settlement worth at least $5.3 billion.

Government and Vale officials were set to meet today, according to Reuters.

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