Author Archives: Fouad Egbaria

This morning in metals news: Nucor Corporation this week said it is evaluating locations for a new 3-million-ton capacity sheet mill; meanwhile, the Department of Commerce announced changes to its anti-dumping and countervailing duty regulations; and, lastly, British Steel warned about surging power prices.

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Nucor Corporation to build new sheet mill

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Nucor Corporation this week said it is evaluating locations for a new sheet mill that will have a capacity of 3 million tons.

The steelmaker said it is looking at possible locations in Ohio, Pennsylvania and West Virginia.

“The new mill will be geographically situated to serve customers in the Midwest and Northeast markets and will have a significantly lower carbon footprint than nearby competitors,” Nucor said.

The steelmaker said the new mill will cost approximately $2.7 billion. The mill will produce hot-rolled sheet products with downstream processing. Furthermore, the facility will also have a tandem cold mill, annealing capabilities and two galvanizing lines.

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Global copper mine production picked up by 4.9% during the first half of the year, the International Copper Study Group said this week.

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Copper production gains

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Broken down further, concentrate production rose by 6.4% during the six-month period. Meanwhile, solvent extraction-electrowinning fell by 1.5%.

Chile, the world’s top copper producer, saw its copper production fall 1.2% during the first half of the year.

Meanwhile, Peru, the second-biggest copper producer, saw its output bounce back by 14% year over year. However, its half-year output remained down 9% from H1 2019 levels.

As a result of rising output at the Grasberg mine, Indonesia’s output rose by 69% year over year.

Refined production up 3.2%

Meanwhile, on the refined side of the picture, production rose by 3.2% year over year, the ICSG reported.

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This morning in metals news: Rio Tinto said it plans to triple solar capacity at its Weipa bauxite mine in Australia; meanwhile, the Aluminum Association said the Department of Commerce had issued final affirmative determinations regarding imports of aluminum foil; and, lastly, U.S. Steel is reportedly looking for a site to build a $3 billion mini-mill.

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Rio Tinto to triple solar capacity at Weipa

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Rio Tinto said it aims to triple its solar capacity at its Weipa bauxite mine in Australia.

“Under the plans, EDL has been contracted to build, own and operate a 4MW solar plant and 4MW/4MWh of battery storage at Weipa,” Rio said in a release. “Work on the battery facilities will start this year, with construction of the whole project expected to be complete by late 2022.

Aluminum Association praises aluminum foil ruling

The Department of Commerce issued final affirmative determinations in its anti-dumping and countervailing subsidy review of aluminum foil imports from Armenia, Brazil, Oman, Russia, and Turkey, the Aluminum Association said Friday.

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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 stainless steel consumption’s impact on nickel prices, surging aluminum prices and much more:

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Week of Sept. 13-17 (stainless steel drives nickel, aluminum prices rise and more)

• Stainless steel production is driving the nickel price, Stuart Burns explained.
• Global aluminum production rose to 5.74 million metric tons in July, the International Aluminum Institute reported.
• Commodity exchange-traded funds (ETFs) are seeing large inflows this year.
• The German government plans to offer $65 million in funding toward a new ArcelorMittal direct reduced iron (DRI) plant.
• Aluminum prices continued to surge this week.
• Construction spending rose in July, while the Architecture Billings Index continued its run of growth.
• Lynas Malaysia offered an update on its processing operations in the country.
• Gold prices fell in the first half of August before bouncing back near the tail end of the month.
• U.S. import prices took a step back in August, dropping by 0.4%.
• Battery maker LG Energy Solution cited the increasingly competitive market for battery materials while announcing its new nickel and cobalt supply agreement with Australian Mines Ltd.
• The Oak Flat copper project in Arizona is at an impasse amid tribal opposition.
• Chinese aluminum might end up avoiding European anti-dumping duties that previously seemed to be a slam dunk to go forward.
• In its Q3 2021 guidance, U.S. Steel forecast the quarter will be a record-setting one.

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This morning in metals news: U.S. Steel released its third-quarter guidance yesterday; U.S. petroleum exports just edged out imports in the first half of the year; and, lastly, unemployment rates fell in 15 U.S. states in August.

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U.S. Steel releases Q3 guidance

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On Thursday, U.S. Steel released its Q3 2021 financial guidance, forecasting EBITDA of $2.0 billion, up from $1.3 billion in the second quarter.

“We expect the third quarter to be a quarter of records for U. S. Steel,” U. S. Steel President and CEO David B. Burritt said. “Supported by strong reliability and quality performance, sustained customer demand, and continued increases in steel selling prices, we expect our Best for All℠ business model to generate record quarterly adjusted EBITDA and EBITDA margins, demonstrating the power of our strategy.”

Burritt added U.S. Steel is bullish that market fundamentals “will support a stronger for longer steel market.”

Higher steel prices into adjusted contracts and spot selling prices, plus strong customer demand, will contribute to record EBITDA in the company’s flat-rolled segment, the guidance report indicated.

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The Renewables Monthly Metals Index (MMI) held flat for this month’s reading.

(Editor’s note: This report also includes the MMI for grain-oriented electrical steel, or GOES.)

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LG Energy Solution signs cobalt, nickel access deal

Last month, LG Energy Solution announced it had signed an agreement that will give it access to nickel and cobalt supply from Australian Mines Ltd.

“LG Energy Solution has secured 100% rights to battery-grade nickel and cobalt materials from Australian Mines Limited amid growing concerns about future supplies of raw materials,” LG said.

“LG Energy Solution announced Monday it has entered into a binding long form offtake agreement with Australian Mines Ltd. for nickel and cobalt, which will be supplied in the form of mixed hydroxide precipitate (MPH) from the Sconi Project in North Queensland.”

The battery maker will have access to 71,000 tonnes of nickel for six years starting from the end of 2024. For cobalt, the total is 7,000 tonnes.

LG said the supply of nickel and cobalt will allow it to manufacture batteries for 1.3 million “high-performance electric vehicles.”

The battery materials will come from Australian Mines’ Sconi Project, which is currently under development.

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This morning in metals news: U.S. import prices declined by 0.4% in August; the Energy Information Administration surveyed the disruption to electricity customers as a result of Hurricane Ida; and, lastly, the European Steel Association commented on the European Union’s proposed Green Deal.

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US import prices fall

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Running against the recent trend, U.S. import prices fell by 0.4%, the Bureau of Labor Statistics reported.

Import prices had jumped by 0.4% in July and 1.1% in June.

“The August downturn was led by lower fuel and nonfuel prices,” the BLS reported. “In contrast, prices for U.S. exports advanced 0.4 percent in August, after increasing 1.1 percent in July.”

Hurricane Ida impact on electricity customers

After Hurricane Ida made landfall in New Orleans in late August, many were left without power.

According to the Energy Information Administration, the storm caused at least 1.2 million electricity customers to lose power. The outages spread out over eight states.

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The Global Precious Monthly Metals Index (MMI) fell by 4.2% for this month’s reading, as the gold price took losses early in the month before bouncing back.

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Gold price recovers

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The gold price bounced back after falling to around $1,730 per ounce in early August.

From there, the U.S. gold bullion price rose to $1,815 by the end of the month.

Meanwhile, the U.S. dollar, which typically has an inverse correlation with gold, picked up in the first two-thirds of the month. The dollar index peaked at 93.57 on Aug. 19 before retracing, closing the month at 92.63.

In other relevant indicators, 30-year Treasury bond yield rates opened August at 1.86% and climbed to a high of 2.03% on Aug. 12 before retreating. The 30-year yield rate closed the month at 1.92%.

Thus far in September, the 30-year yield has continued to retreat, closing Tuesday, Sept. 14, at 1.85%.

Meanwhile, the 10-year yield opened August at 1.20% before closing the month at 1.30%.

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The Rare Earths Monthly Metals Index (MMI) dropped 8.5% for this month’s reading.

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Lynas updates on Malaysian operations

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Lynas Rare Earths Ltd. last month offered an update on its processing operations in Malaysia.

The plant is operating at reduced rates due to the COVID-19 pandemic.

“The Lynas Malaysia plant continues to operate at reduced rates in line with our commitment to the health and safety of our people and in compliance with the Malaysian Government’s Standard Operating Procedures (SOPs),” Lynas said in a release. “As the vigorous 3rd wave of COVID-19 in Malaysia persists, Lynas continues to maintain strict health and hygiene protocols, including COVID-19 testing for all staff and contractors prior to entry to the site.”

Furthermore, Malaysian regulatory authorities extended the deadline for “satisfaction of the licence condition related to the commencement of construction of the Permanent Disposal Facility (PDF) for WLP residue” by six months. The deadline is now March 2, 2022.

“This recognises the constraints presented by current COVID-19 conditions,” Lynas said. “We continue to engage productively with the relevant government and regulatory authorities to progress the approvals for the PDF.”

The company’s processing operations in the country has been the source of outcry from environmental activists. Activists have appealed a court’s decision to dismiss their request for review of the decision to renew the company’s operating license in 2019.

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The Construction Monthly Metals Index (MMI) picked up by 4.9% for this month’s reading.

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US construction spending

U.S. construction spending reached a seasonally adjusted annual rate of $1,568.8 billion in July, the Census Bureau reported earlier this month.

The July rate marked a 0.3% increase from the previous month. Furthermore, the July figure jumped by 9.0% compared with July 2020.

During the first seven months of the year, construction spending totaled $883.2 billion, up 6.2% year over year.

Private construction spending reached a rate of $1,231.0 billion, or up 0.3%. Within private construction, residential construction reached an annual rate of $773.0 billion in July, up 0.5% from June. Nonresidential construction came in at $458.0 billion in July, or down 0.2%.

Meanwhile, public construction reached $337.8 billion, up 0.7%. Educational construction checked in at $79.7 billion, down 0.5%. Highway construction rose by 1.9% to a rate of $94.5 billion.

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