Author Archives: Fouad Egbaria

This morning in metals news: the United States International Trade Commission made determinations in a five-year sunset review covering imports of cut-to-length carbon steel plate; meanwhile, United States Trade Representative Katherine Tai will outline the Biden-Harris administration’s “worker-centered trade policy” today; and, lastly, the Consumer Price Index for All Urban Consumers rose by 0.6% in May.

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USITC rules on cut-to-length carbon steel plate imports

United States International Trade Commission

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The USITC recently made determinations in a five-year sunset review regarding an existing anti-dumping duty order on cut-to-length carbon steel plate from China and terminating suspended investigations on imports of the product from Russia and Ukraine.

In its vote, the USITC said revoking the anti-dumping duty order on the carbon steel plate from China “would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.”

It also voted to maintain existing suspension agreements for the imports from Russia and Ukraine.

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The Rare Earths Monthly Metals Index (MMI) fell by 19.6% this month, as China has loosened rare earths production quotas and the Biden administration could possibly launch a Section 232 investigation for neodymium magnets.

June 2021 Rare Earths MMI chart

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US to consider neodymium Section 232 probe

As noted in yesterday’s morning roundup, the Biden administration released the findings of its 100-day review of critical U.S. supply chains.

Earlier this year, President Joe Biden called for various agency heads to execute 100-day reviews of critical U.S. supply chains. Specifically, the president’s order referenced supply chains for critical minerals, in addition to large-capacity batteries, semiconductors and pharmaceutical products.

The report stemming from that review notes the possibility of launching a Section 232 investigation for neodymium magnets. Former President Donald Trump used Section 232 to impose tariffs on steel and aluminum.

In a section summarizing recommendations, the report called for strengthening international trade rules and trade enforcement mechanisms. The review calls for evaluation of whether or not a Section 232 investigation for neodymium magnets is warranted.

“Neodymium (NdFeB) permanent magnets play a key role in motors and other devices, and are important to both defense and civilian industrial uses,” the report states. “Yet the U.S. is heavily dependent on imports for this critical product. We recommend that the Department of Commerce evaluate whether to initiate an investigation into neodymium permanent magnets under Section 232 of the Trade Expansion Act of 1962.”

NdFeB magnets are used in computer hard disk drives, magnetic resonance imaging (MRI), precision guided munitions, automotive motors and wind turbines.

Prices fall as China relaxes rare earths production quotas

As MetalMiner’s Stuart Burns explained earlier this month, the Chinese government recently relaxed production quotas for rare earths.

Consequently, prices for rare earth oxides took a fall.

“Market prices remain volatile, though,” Burns explained. “A half yearly quota set by government officials is not the optimal system to match supply, demand and prices. As the economy bounced back last year, the rare earths market was caught on the hop and prices rose strongly.

“Some light rare earths, like praseodymium-neodymium (PrNd) oxide, reached multiyear highs.”

However, Beijing relaxed the quota from 66,000 tons to 84,000 tons.

Furthermore, the Rare Earths MMI has fallen for the third straight month.

“This suggests the MIIT’s loosening of production limits has had the desired impact and availability is proving sufficient to meet demand,” Burns added.

Lynas plant in Malaysia continues to operate

Lynas Rare Earths Ltd. offered an update last month on its Malaysian plant.

The Malaysian government issued a movement control order May 12, which is in effect until June 7.

“The MCO, which is in effect for the period from 12 May 2021 until 7 June 2021, permits all economic sectors to continue to operate during the period of the MCO,” Lynas said in a statement. “Consistent with the MCO and previous updates, the Lynas Malaysia plant continues to operate with Standard Operating Procedures (SOPs) in place. Lynas Malaysia has already implemented strict health and hygiene protocols that meet and exceed the Ministry of Health’s requirements. Products produced at the Lynas Malaysia plant are essential to the manufacturing supply chains for critical industries including automotive, medical devices, oil refining and machinery & equipment.”

Actual metals prices and trends

The Chinese yttrium price rose by 1.6% month over month to $33.75 per kilogram as of June 1. The terbium oxide price fell by 17.1% to $1,044 per kilogram.

The neodymium oxide price fell by 8.5% to $77,706 per metric ton.

The Europium oxide fell by 3.3% to $30.61 per kilogram. Meanwhile, the dysprosium oxide price dropped by 11.7% to $385 per kilogram.

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

June 2021 Construction MMI chart

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US construction spending ticks up in April

housing starts

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U.S. construction spending reached a seasonally adjusted annual rate of $1,524.2 billion in April, the Census Bureau reported.

The estimated April rate marked a 0.2% increase from the previous month and a 9.8% increase on a year-over-year basis.

Construction spending amounted to $452.3 billion during the first four months of the year, or up 5.8% from the same period in 2020.

Meanwhile, private construction spending reached a seasonally adjusted annual rate of $1,180.7 billion, up 0.4% from March. Under the umbrella of private construction, residential construction increased by 1.0% to a rate of $729.2 billion in April. Nonresidential construction fell by 0.5% to $451.4 billion in April.

Public construction spending fell 0.6% to $343.5 billion. Educational construction spending fell 0.5% to $84.8 billion. Highway construction rose 0.6% to $99.8 billion.

Construction employment declines in May

On the labor side, employment in the construction sector fell by 20,000 in May, the Census Bureau reported. Employment in construction is down by 225,000 from February 2020.

The Associated General Contractors of America noted contractors continue to struggle with unpredictability with respect to securing materials.

“Steadily worsening production and delivery delays have exceeded even the record cost increases for numerous materials as the biggest headache for many nonresidential contractors,” said Ken Simonson, the association’s chief economist. “If they can’t get the materials, they can’t put employees to work.”

ABI posts growth for third consecutive month

For the third straight month, the Architecture Billings Index, released monthly by the American Institute of Architects, showed growth (meaning an index value greater than 50).

After the onset of the pandemic, the ABI had contracted each month for a year until the February 2021 reading.

For April, the ABI checked in at 57.9, up from 55.6 the previous month. The design contracts index reached 61.7, up from 55.7 the previous month.

The ABI marked its highest level since before the Great Recession.

“Interest in new projects remained extremely strong as well, with the Inquiries score rising to 70.8, and the value of new signed design contracts reaching 61.7, the highest score in that index since data collection started in late 2010,” the ABI report stated. “This means that not only are clients talking to architecture firms about starting new projects, but that they are also signing contracts to begin that work at a high rate.”

By region, the Midwest led the way with an ABI reading of 60.6. Trailing the Midwest were the South (58.3), Northeast (55.0) and West (52.4).

As we’ve noted in this space on a regular basis, shortages and delays in receiving materials have had a ripple effect. The sudden surge in demand throughout some sectors has produced a bullwhip effect.

The ABI report noted the 0.8% jump in the Consumer Price Index from March to April and the 4.2% jump from April 2020 to April 2021, which marked the largest increases since before the Great Recession.

“In addition, core inflation rose by 0.9% in April, the largest increase in that indicator since 1981,” the ABI report notes. “Rising consumer prices at this time are largely caused by supply constraints due to a shortage of key inputs subsequently leading to production delays, and by rising demands for services, particularly travel and hospitality.”

Pending home sales drop in April

Meanwhile, in the housing market, pending home sales fell by 4.4% in April, the National Association of Realtors (NAR) reported.

“Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes,” said Lawrence Yun, NAR’s chief economist. “The upper-end market is still moving sharply as inventory is more plentiful there.”

Actual metals prices and trends

The Chinese rebar price dipped 0.7% month over month to $802 per metric ton. Meanwhile, the Chinese H-beam steel price fell 2.3% to $815 per metric ton.

The U.S. shredded scrap steel price rose by 3.2% to $450 per short ton.

The European 1050 commercial aluminum sheet price rose by 0.4% to $3,577 per metric ton.

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This morning in metals news: as the U.S. economy reopened, job openings hit a record high in April; meanwhile, steel prices continue to rise; and, lastly, emissions from the electric power sector have declined as it has shifted from coal to natural gas.

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

Job openings hit record high in April

job openings

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U.S job openings reached a record high of 9.3 million on the last business day of April, the U.S. Census Bureau reported.

Hires, meanwhile, reached 6.1 million, little changed from the previous month.

“Total separations increased to 5.8 million,” the Census Bureau added. “Within separations, the quits rate reached a series high of 2.7 percent while the layoffs and discharges rate decreased to a series low of 1.0 percent.”

In durable goods manufacturing, separations increased by 7,000.

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This morning in metals news: the Biden administration today released a 250-page report detailing the findings of its 100-day supply chain review; meanwhile, the US steel capacity utilization rate ticked up to 82.3%; and, lastly, the U.S. goods and services deficit fell in April compared with the previous month.

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

Biden administration releases 100-day supply chain review

supply chain chart

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Earlier this year, President Joe Biden signed an executive order calling for 100-day reviews of critical U.S. supply chains. The reviews in question included those for things like critical minerals, semiconductors and high-capacity batteries.

The 100-day period has come and gone. Today, the administration released a 250-page report detailing its findings.

“The COVID-19 pandemic and resulting economic dislocation revealed long-standing vulnerabilities in our supply chains,” the report’s introduction states. “The pandemic’s drastic impacts on demand patterns for a range of medical products including essential medicines wreaked havoc on the U.S. healthcare system. As the world shifted to work and learn from home, it created a global semiconductor chip shortage impacting automotive, industrial, and communications products, among others.”

In addition to its deeper analysis, the report included six broad recommendations for strengthening U.S. supply chains:

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The Automotive Monthly Metals Index (MMI) rose by 4.5% for this month’s reading, as many automakers posted record auto sales in May.

June 2021 Automotive MMI chart

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US auto sales

auto sale

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Among monthly reporters, Ford Motor Co. reported its total sales in the US in May rose by 4.0% year over year. However, retail sales dropped by 11.2%.

Ford’s total truck sales fell by 11.6%. Meanwhile, SUV sales rose by 48.6% and car sales dropped 62.4%.

Furthermore, Ford sold 10,364 electrified vehicles, good for a jump of 184%.

“Growth came from Mustang Mach-E, which totaled 1,945 vehicle sales, while F-150 PowerBoost totaled 2,852 for the month, Escape electrified sales totaled 3,617 – up 125 percent over last year,” the automaker said. “Explorer Hybrid sales also had a big increase of 132 percent over a year ago on sales of 1,156 SUVs.”

Honda, meanwhile, reported an all-time monthly sales record of 176,815 vehicles. Total sales rose by 46.2%. Truck sales rose by 52.2%, while car sales rose by 37.9%.

Similarly, Hyundai reported a monthly sales record for the third consecutive month. Hyundai’s May total sales rose by 56% to 90,017 vehicles. In May, Hyundai also unveiled the IONIQ 5 for North America, which it says has a targeted driving range of 300 miles and the ability to charge from 10% 80% in 18 minutes.

A record May

In their monthly automotive forecast, J.D. Power and LMC Automotive forecast May would be a record month for new-vehicle retail sales in the US.

They projected retail sales would reach 1,388,600 vehicles, or up 34.0% from May 2020. The total also marked an increase of 10.6% from May 2019.

“The U.S. auto industry is showing tremendous adaptability in maintaining a record sales pace, despite historically low inventory levels,” said Thomas King, president of J.D. Power’s data and analytics division. “May is usually one of the highest-volume sales months with buying activity peaking around the Memorial Day weekend when manufacturers typically offer incremental incentives.”

General Motors to boost deliveries to US, Canada

General Motors said it plans to increase its deliveries of vehicles to customers in the US and Canada.

The automaker said the move aims to “meet strong consumer demand for Chevrolet, Buick, GMC and Cadillac vehicles.”

Furthermore, production of the Chevrolet Silverado HD and GMC Sierra HD full-size pickups will increase by about 1,000 trucks per month beginning in mid-July. Meanwhile, shipments of Chevrolet Colorado and GMC Canyon mid-size pickups will increase by about 30,000 total units from mid-May through the week of July 5.

GM also said assembly plants that build GM’s “most capacity-constrained products” will not take any dedicated vacation downtime this summer.

Despite the ongoing semiconductor shortage that has impacted the automotive industry, GM expressed optimism about its first-half performance.

“As a result of GM’s ongoing efforts to prioritize semiconductor usage, its success engineering solutions that maximize the utilization of chips as well as the pull-ahead of some projected semiconductor deliveries into the second quarter, the company now expects its first-half financial results to be significantly better than the first-half guidance previously provided,” GM said. “GM is optimistic about the full year and expects to share additional information during its second-quarter earnings conference call on Aug. 4.”

Nonetheless, the automaker said production at certain manufacturing facilities in North America, Asia and South America “will continue to be impacted” by the global semiconductor shortage through June and July.

China auto sales up 8.6%

Meanwhile, auto sales in China rose by 8.6% year over year in April, according to the China Association of Automobile Manufacturers.

Sales reached 2.25 million vehicles in April. However, sales dropped by 10.8% from the previous month.

For the January-April period, sales rose by 51.8% year over year.

Actual metals prices and trends

The US HDG price rose by 1.1% month over month to $1,884 per short ton as of June 1. The US shredded scrap steel price rose by 3.2% to $450 per short ton.

Meanwhile, LME three-month copper rose by 2.3% to $10,171 per metric ton.

The Korean 5052 aluminum coil premium increased by 3.7% to $3.91 per kilogram.

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

This morning in metals news: Nucor Corporation today announced it will acquire Cornerstone Building Brands‘ insulated metal panels business; the oil price approached $70 per barrel to close last week; and the aluminum price has retraced over the last month.

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

Nucor to acquire insulated metal panels business

mergers and acquisitions

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Nucor announced today that it plans to acquire the insulated metal panels business of Cornerstone Building Brands.

The acquisition comes at a cash purchase price of $1 billion. Nucor said it expects the transaction to close later this year, pending regulatory approvals.

“Today’s announcement accelerates our vision to broaden value-added solutions that Nucor provides to our targeted end markets. Additionally, it enhances our strong financial position with attractive free cash flow conversion rates and accretive EBITDA margins,” Nucor President and CEO Leon Topalian said. “We are excited about this opportunity to acquire a historical leader and innovator in the quickly growing IMP product category serving the non-residential market.”

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Before we head into the weekend, let’s take a look back at the week that was and the metals news here on MetalMiner, including iron ore volatility, rare earths production quotas in China and much more:

bulk cargo iron ore

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Week of May 31-June 4 (iron ore volatility, rare earths quotas and more)

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

This morning in metals news: US nonfarm payroll employment rose by 559,000 in May; the EU plans to impose carbon emissions costs on imports of steel, cement and electricity, Reuters reported; and the LME copper price dropped below $10,000 per metric ton.

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

Nonfarm payroll employment rises in May

nonfarm payrolls

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Nonfarm payroll employment in the US increased by 559,000 in May, the Bureau of Labor Statistics reported today.

Meanwhile, the unemployment rate declined by 0.3 percentage point to 5.8%.

“Notable job gains occurred in leisure and hospitality, in public and private education, and in health care and social assistance,” the Bureau of Labor Statistics reported.

EU to slap carbon emissions costs on imports

The European Union will introduce new carbon emissions costs on imports of steel, cement and electricity, Reuters reported.

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This morning in metals news: General Motors says it will increase vehicle deliveries to customers in the US and Canada; US nonfarm business sector labor productivity rose by 5.4% in the first quarter; and crude oil prices continue to rise.

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

General Motors to increase deliveries to US, Canada

General Motors headquarters in Detroit, Michigan

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General Motors announced plans to increase vehicle deliveries to customers in the US and Canada.

The automaker cited “strong demand” for Chevrolet, Buick, GMC and Cadillac vehicles.

Production of the Chevrolet Silverado HD and GMC Sierra HD full-size pickups will increase by about 1,000 trucks per month, General Motors said, beginning in mid-July. In addition, shipments of Chevrolet Colorado and GMC Canyon mid-size pickups will increase by about 30,000 total units from mid-May through the week of July 5.

“As announced in May, GM will return full-size pickup production to Oshawa Assembly in Canada during the fourth quarter of 2021,” the automaker added. “The new accelerated timeline and incremental volume are expected to make an impact in 2022, as production ramps up.”

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