Author Archives: Fouad Egbaria

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The Automotive Monthly Metals Index (MMI) rose by 7.1% this month, as US auto sales were strong in February.

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US auto sales

Ford Motor Co. reported its February US retail auto sales reached 163,520 vehicles, down 1.8% year over year.

Ford truck sales increased 10.2% year over year. Meanwhile, SUV sales ticked up 0.2%. Ford car sales fell 56.5%.

Ford’s estimated retail share in February reached 12%, up from 11.7% last year.

“Share gains came from trucks and new product offerings of Bronco Sport and the fully electric Mustang Mach-E,” Ford said.

Honda sales overall fell 11.4% to 106,328 vehicles. However, the automaker reported its best-ever February for Honda truck sales. Truck sales rose 5% year over year.

Electric vehicles (EVs) still represent a small percentage of Honda’s total sales. Nonetheless, the automaker reported EV sales rose 96.2%, with deliveries nearing 8,000 vehicles.

Nissan, which moved to quarterly reporting last year, in January reported Q4 2020 sales in the US fell 19.3% year over year.

US auto sales growth in February

Late last month, J.D. Power and LMC Automotive forecast sales growth in February.

The automotive intelligence groups forecast a 3.3% increase year over year when adjusting for differences in selling days.

“Despite challenges posed by inclement weather in most of the country, retail sales demand continues to be strong with the industry posting a second consecutive month of year-over-year gains,” said Thomas King, president of the data and analytics division at J.D. Power. “Typically, weather related sales disruptions are made up in the weeks following, so most of the sales lost at the beginning of February will be made up at the end of February and trail into early March.”

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This morning in metals news: the American Iron and Steel Institute (AISI) offered positive comments on the heels of the confirmation of the secretary of commerce; UK unions worry about the potential loss of thousands of jobs; and the Biden administration is taking a step back in the process toward an Arizona copper mine.

AISI on new Secretary of Commerce

The Senate voted 84-15 in favor of confirmation of Gina Raimondo to the position of secretary of commerce.

“Strong enforcement of U.S. trade laws is a top priority for American steelmakers, particularly as foreign government subsidies and other market-distorting policies and practices have resulted in significant global steel overcapacity — the impacts of which have been exacerbated by the COVID-19 pandemic,” AISI President and CEO Kevin Dempsey said.

Dempsey emphasized the need for “full enforcement” of Section 232 remedies on steel products.

Raimondo had served as governor of Rhode Island since 2015.

Find more insight on MetalMiner’s LinkedIn.

UK union fears

Workers in the UK’s steel industry are expressing concern over potential job losses due to financial troubles within Sanjeev Gupta’s GFG Alliance, the BBC reported.

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This morning in metals news: the March 2021 Monthly Metal Outlook (MMO) report is out; meanwhile, annual natural gas production declined in 2020; and, finally, pending home sales declined in January.

Find more insight on MetalMiner’s LinkedIn.

March 2021 MMO report

Every first of the month, MetalMiner publishes its Monthly Metal Outlook forecast report, available only to subscribers.

The report includes buying strategies for 10 key metals: aluminum, copper, zinc, tin, lead, stainless/nickel, HRC, HDG, CRC and plate.

For more information about the monthly report and how to subscribe, visit the MMO landing page.

Natural gas output down

Natural gas production fell 1% in 2020, the Energy Information Administration (EIA) reported.

“U.S. natural gas production—as measured by gross withdrawals—averaged 111.2 billion cubic feet per day (Bcf/d) in 2020, down 0.9 billion Bcf/d from 2019 as result of a decline in drilling activity related to low natural gas and oil prices in 2020,” the EIA reported.

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US steel mills churned out metal at a steel capacity utilization rate of 77.2% for the week ending Feb. 27, the American Iron and Steel Institute (AISI) reported.

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

Steel capacity utilization gains

Last week’s rate marked a slight increase from the previous week, when steel capacity utilization reached 77.0%.

Production last week reached 1.75 million net tons.

The production total marked a 7.0% decrease from the same period in the previous year. Furthermore, capacity utilization during the same period in 2020 reached 81.3%.

In addition, production for the week ending Feb. 27, 2021, increased 0.2% from the previous week. Production during the week ending Feb. 20, 2021, reached 1.745 million net tons at a steel capacity utilization rate of 77.0%.

Meanwhile, adjusted year-to-date production through Feb. 27, 2021, totaled 14.36 million net tons at a capacity utilization rate of 76.5%. Output is down 8.4% year over year.

At the same point last year, steel capacity utilization had reached 81.9%.

By region, production during the week ending Feb. 27, 2021, totaled:

• Northeast: 155,000 net tons
• Great Lakes: 624,000 net tons
• Midwest: 181,000 net tons
• Southern: 715,000 net tons
• Western: 74,000 net tons

Steel prices

Steel prices continue to rise in the US, as buyers struggle to secure supply (even despite slowly gaining capacity utilization rates).

US hot rolled coil closed Monday at $1,204 per short ton, or up 9.65% from a month ago.

Meanwhile, US cold rolled coil rose 8.87% to $1,375 per short ton.

US hot dipped galvanized is up 7.12% to $1,475 per short ton.

Plate is up 9.77% to $1,079 per short ton.

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

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This morning in metals news: US construction spending picked up in January; meanwhile, the Federal Register published the text of President Joe Biden’s latest executive order; and, lastly, the copper price came back down to close last week.

US construction spending rises in January

US construction spending picked up to a seasonally adjusted annual rate of $1,521.50 billion, the Census Bureau reported.

The spending rate marked an increase of 1.7% from the previous month and 5.8% from January 2020.

Private construction spending increased by 1.7% from the previous month.

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

Federal Register publishes supply chain order

Last week, President Biden signed an executive order that seeks to review and strengthen several critical supply chains.

Today, the Federal Register published the full text of the executive order titled “America’s Supply Chains.”

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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 coverage of the copper price, how the Biden administration will handle the former Trump administration’s metals tariffs and much more.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Week of Feb. 22-26 (copper price, aluminum tariff and much more)

• Stuart Burns on the copper price and the red metal’s overall bullish narrative.
• Rio Tinto released its annual report and Norilsk Nickel reported a fatal accident at one of its operations.
• Burns reviewed the impact of former President Donald Trump’s Section 232 aluminum tariff, in addition to its fate under the new Biden administration.
• The US steel sector’s capacity utilization rate bumped up to 77.0% last week.
• Meanwhile, US industrial production grew by 0.9% in January, the Federal Reserve reported.
• Japanese automotive component maker Kosei reached another aluminum supply deal with Russian aluminum giant UC Rusal.
• The copper price has continued to rise, as supply issues become more and more of a concern.
• In its latest earnings report, aluminum product maker Arconic cited weakness in aerospace demand.
• US metals shipments in January were down compared with shipment levels in January 2020.
• President Joe Biden signed an executive order that aims to review supply chains for several key materials, including rare earths and semiconductors.
• J.D. Power and LMC Automotive forecast US new-vehicle retail sales to rise by 3.3% in January.
• The Department of Commerce reviewed margins for anti-dumping and countervailing duty orders on aluminum foil from China.
• The US trade deficit for goods reached $83.7 billion in January, the Census Bureau reported.

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This morning in metals news: the US international goods trade deficit moved up slightly from December to January; meanwhile, MetalMiner sister site SpendMatters took to LinkedIn for feedback on President Joe Biden’s executive order on supply chains; and, lastly, Sweden will be home to what will reportedly be the world’s largest “green hydrogen plant.”

US trade deficit rises in January

The US trade deficit in January reached $83.7 billion, the Census Bureau reported.

The trade deficit increased from $83.2 billion in December.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Spend Matters analyst looks at Biden administration’s supply chain executive order

Speaking of the trade deficit and trade in general, in light of President Joe Biden signing an executive order to address US supply chain problems for semiconductor chips, large-capacity batteries for electric vehicles, rare earth minerals and pharmaceuticals, Spend Matters analyst Pierre Mitchell took to LinkedIn to get a conversation started.

“Hey, if a 78-year-old guy from Scranton gets it, maybe more C-level execs will finally now get serious about supply chain risk management,” Mitchell writes. “Actually, most do, especially after the pandemic, but it’s still depressing when so many wait until they get a major disruption. Is this finally a sea change … or ‘C-change’?”

MetalMiner’s Stuart Burns recently outlined the geopolitical chess game taking place over rare earth materials.

To be a part of the conversation, engage with Mitchell’s post on LinkedIn to voice your opinions.

World’s largest ‘green hydrogen plant’

Steelmaking is a traditionally high-polluting industry. But, slowly but surely, steelmakers around the world are touting newfound green bona fides.

CNBC reported yesterday that Sweden could soon be home to the “world’s largest green hydrogen plant.”

The firm, H2 Green Steel, will aim to provide the European market with steel made with a “fossil-free manufacturing process,” CNBC reported.

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The US Department of Commerce this week announced final margins for anti-dumping and countervailing duties on aluminum foil from China.

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DOC calculates AD, CVD margins for aluminum foil

According to the Aluminum Association, the Department of Commerce announced anti-dumping and countervailing duty margins “in connection with the first annual administrative review of the unfair trade orders on certain aluminum foil.”

In its analysis, the DOC used sales information for Jiangsu Zhongji Lamination Materials Co., Ltd. and Xiamen Xiashun Aluminum Foil Co., Ltd. 

“The Aluminum Association and its members are pleased that the Commerce Department continues to enforce vigorously the anti-dumping and countervailing duty orders on aluminum foil from China,” said Tom Dobbins, president and CEO of the Aluminum Association.

Dobbins said the unfair trade orders are “leveling the playing field.”

However, he also said it is “discouraging” that Chinese producers are exporting foil using unfair trade practices.

“Today’s announcement reinforces the need for continued vigilance to ensure that foil imports from China are competing fairly in the U.S. market,” he added.

The Department of Commerce calculated a combined anti-dumping and countervailing duty rate of 71.98% for Jiangsu Zhongji Lamination Materials.

Meanwhile, the DOC calculated a combined rate of 67.45% for Xiamen Xiashun Aluminum Foil Co.

The duties also apply to “other cooperative respondents” whose shipments the DOC did not analyze individually.

The calculations cover aluminum foil that came into the United States between Aug. 14, 2017 and March 31, 2019.

“The unfair trade orders on aluminum foil from China continue to be effective in ensuring fair competition with imports from China,” said John M. Herrmann, lead counsel to the domestic industry. “We will continue our efforts to ensure the effectiveness of these unfair trade orders, including aggressive efforts to identify and thwart schemes to evade enforcement of the orders.”

Other investigations

Meanwhile, the Department of Commerce late last year launched investigations related to aluminum foil imports from five other countries.

The DOC in October launched probes related to imports from Armenia, Brazi, Oman, Russia and Turkey.

The period of investigation runs from July 1, 2019, to June 30, 2020.

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This morning in metals news: J.D. Power and LMC Automotive released their joint forecast on February US auto sales; meanwhile, US steel imports fell by 23% in January; and, lastly, Ford’s CEO urged the US government to support the implementation of electric vehicle applications.

February US auto sales forecast to rise

New-vehicle retail sales in February are forecast to rise by 3.3% when adjusted for selling days, LMC Automotive and J.D. Power said.

“Despite challenges posed by inclement weather in most of the country, retail sales demand continues to be strong with the industry posting a second consecutive month of year-over-year gains,” said Thomas King, president of the data and analytics division at J.D. Power.

Meanwhile, the average manufacturer incentive is down. According to J.D. Power and LMC Automotive, the average incentive is on pace to be $3,562 per vehicle, or down $614 from a year ago.

Furthermore, as incentives decline, average transaction prices are going up. Per the report, the forecast calls for the average transaction price to rise 9.8% to $37,524, a February record.

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President Joe Biden’s latest executive order seeks to secure a variety of important supply chains.

For example, in one higher-profile case, General Motors recently announced it would extend downtimes at several plants as a result of a semiconductor shortage.

As we’ve noted in our Rare Earths Monthly Metals Index (MMI) series, rare earths supply has long been a point of concern for the US, particularly the Pentagon. (Recently, MetalMiner’s Stuart Burns delved into China’s overwhelming control of the rare earths processing market and indications Beijing is considering tighter rare earths export regulations.)

In that vein, the president’s latest executive order — his 33rd in just over a month in office, which the White House said he would sign Wednesday — aims to secure those critical supply chains.

The White House said the order focuses on six key areas:

• the defense industrial base
• the public health and biological preparedness industrial base
• the information and communications technology (ICT) industrial base
• the energy sector industrial base
• the transportation industrial base
• supply chains for agricultural commodities and food production

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