U.S. construction spending reached a seasonally adjusted annual rate of $1,459.4 billion in November, the Census Bureau reported this week.
The November rate marked a 0.9% increase from the previous month. Furthermore, the rate increased 3.8% year over year.
Meanwhile, construction spending through the first 11 months of 2020 totaled $1,314.1 billion, up 4.4% compared with the first 11 months of 2019.
Meanwhile, private construction reached a rate of $1,111.8 billion, or up 1.2% from October. Under the umbrella of private construction, residential construction reached $658.1 billion in November, or up 2.7%. Nonresidential construction dipped 0.8% to $453.8 billion.
Public construction fell 0.2% to an estimated seasonally adjusted annual rate of $347.6 billion. Under public construction, educational construction rose 0.3% to $86.7 billion. Highway construction reached a rate of $97.5 billion, or up 1.8% from October.
ABI: billings fall for ninth consecutive month
Aside from construction spending, the Architecture Billings Index (ABI), released monthly by the American Institute of Architects, posted an index value of 46.5 in November.
This morning in metals news: U.S. average gas prices fell to their lowest level since 2016 last year; the U.S. Treasury announced sanctions against Iran’s steel industry; and Ford Motor Co. released its Q4 2020 U.S. sales results.
As MetalMiner readers know, we keep tabs on commodities like oil insofar as they can be price drivers for metals. In short, oil price increases are often supportive of metals prices. (Readers can learn more about our analysis in the most recent update to our Annual Outlook.)
Unsurprisingly, given the slowdown in travel last year stemming from the onset of the COVID-19 pandemic in the U.S., the average gas price fell to its lowest level since 2016, the Energy Information Administration (EIA) reported.
Per the EIA, the average gas price dropped to $2.17 per gallon.
Meanwhile, in mid-March 2020, before the declaration of a national emergency, the average stood at $2.38 per gallon.
U.S. levies sanctions on ‘key actors’ in Iran’s steel sector
The U.S. Treasury on Tuesday announced sanctions on several firms in the Iranian steel sector, in addition to a Chinese supplier of graphite electrodes.
The Treasury announced sanctions on China’s Kaifeng Pingmei New Carbon Materials Technology Co., Ltd. (KFCC), which sold graphite electrodes to Pasargad Steel Complex, the Treasury said.
The automaker said the quarter marked its best fourth-quarter retail sales since 2007.
“GM outperformed the industry in the quarter and the full year by a significant margin because our manufacturing and supply chain teams and dealers helped keep people safe at work and our launches on track,” said Steve Carlisle, executive vice president and president of GM North America. “Extraordinary teamwork has set up everyone to succeed in 2021 as the economy continues to recover and we further ramp up truck and SUV production.”
Furthermore, average transaction prices set fourth-quarter and full-year records, GM reported, at $41,886 and $39,229, respectively.
Meanwhile, Fiat Chrysler reported Q4 U.S. sales of 499,431 vehicles, or down 8% year over year. The automaker’s full-year sales in 2020 declined by 17% compared with the previous year.
“The work undertaken by our dealers was nothing less than heroic given the challenges they faced this year,” U.S. Head of Sales Jeff Kommor said. “The fourth quarter provided a strong springboard heading into 2021. Looking ahead, we anticipate an exciting year that will include a variety of new vehicles. Just in the first quarter alone, we will be offering the Ram 1500 TRX, Jeep Wrangler 4xe, Jeep Wrangler Rubicon 392, the refreshed Dodge Durango and the refreshed Chrysler Pacifica.”
Nissanreported Q4 sales of 243,133 vehicles, down 19.3% year over year. The automaker’s full-year sales, meanwhile, declined by 33.2% year over year.
This morning in metals news: the American Iron and Steel Institute released its first report on U.S. raw steel production for 2021; Nippon Steel eyes its net-zero emissions goals; and, lastly, the U.S. hot-rolled coil price continues to surge.
This morning in metals news: Ford Motor Co. and Mahindra announced the mutual decision to end joint venture talks; the Energy Information Administration released its quarterly coal report; and, finally, the zinc price has retraced.
A previously announced joint venture between Ford Motor Co. and Mahindra will not be going through, the companies announced recently.
The two companies had reached a deal back in October 2019, with a long-term expiration date of Dec. 31, 2020.
“According to the companies, the outcome was driven by fundamental changes in global economic and business conditions – caused, in part, by the global pandemic – over the past 15 months,” Ford said in a prepared statement. “Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities.”
Meanwhile, Ford said its independent operations in India will continue “as is.”
This morning in metals news: the U.S. announced it will adjust its tariffs on E.U. products imposed last year; the U.S.’s renewable energy consumption surpassed that of coal for the first time since before 1885; and metals prices have retraced slightly this week.
Last year, a WTO ruling authorized the U.S. to impose up to $7.5 billion worth in tariffs on E.U. products. The ruling came as a result of the long-running saga over government subsidies for Airbus in Europe.
Yesterday, the United States Trade Representative (USTR) announced the U.S. will adjust the previously announced tariffs, citing the scope of the E.U.’s countermeasures that hit against U.S. subsidies of Boeing.
“In September, 2020 the EU was authorized to impose tariffs affecting $4 billion in U.S. trade as a result of related WTO litigation,” the USTR said in a release. “In implementing its tariffs, however, the EU used trade data from a period in which trade volumes had been drastically reduced due to the horrific effects on the global economy from the COVID-19 virus. The result of this choice was that Europe imposed tariffs on substantially more products than would have been covered if it had utilized a normal period. Although the United States explained to the EU the distortive effect of its selected time period, the EU refused to change its approach.”
This morning in metals news: U.S. steel imports dropped 22.1% year over year through the first 11 months of the year; the U.S. international trade deficit rose by 5.5% from October to November; and global aluminum production totaled 5.47 million metric tons in November.
Continuing our rundown of the best of 2020, let’s take a look back at the year that was for copper.
Like other metals, copper suffered an early-year swoon.
The LME three-month copper price fell to just over $4,600 per metric ton in late March, as nations around the world began to battle the early stages of the coronavirus pandemic.
Since then, copper has bounced back, in large part powered by Chinese demand.
Just before Christmas, the price surged to a 2020 high of $7,914 per metric ton. The price marked its highest since Q1 2013.
Meanwhile, as we look ahead, copper is likely to remain in high demand, with growing application from the renewables sector (including wind and solar). As nations around the world continue to advance green initiatives — albeit of varying degrees of ambition — the demand for copper will certainly be there.
“Sustained growth in copper demand is expected to continue as copper is essential to economic activity and even more so to the modern technological society,” the International Copper Study Group said in its copper market forecast for 2020-2021. “Infrastructure development in major countries such as China and India and the global trend towards cleaner energy will continue to support copper demand.”
Furthermore, the ICSG forecast global apparent usage of refined copper will rise by 1.1% in 2021.
So, without further ado, let’s take a look at the most-viewed copper-centric posts of the year on MetalMiner.
This morning in metals news: MetalMiner’s Maria Rosa Gobitz recaps movements in December metals prices; Steel Dynamics released its Q4 earnings guidance; and, finally, the United States International Trade Commission launched a Section 337 investigation relating to vehicle control systems.
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Recapping December 2020 metals prices
MetalMiner’s Maria Rosa Gobitz recapped the last two weeks in metals and oil as the year draws to a close.
“The U.S. oil market traded up over the past two weeks,” Gobitz explains. “The WTI oil price closed Thursday at $48.23/barrel, up from $46.57/barrel two weeks ago. According to the Energy Information Administration, U.S. crude oil inventories were at 499.5 million barrels by the week ending Dec. 18, an decrease of 0.7% from 503.2 million barrels compared to two weeks prior. Even though inventories increased this fortnight, they are still up about 11% from the five-year average for this time of year.”
Gobitz rounded up the world of metals over the last two weeks in bullet form:
Over the last two weeks, the Thomson Reuters/CoreCommodity CRB increased to 165.55 from 161.25. The oil price rose by 3.6% over the same period.
Prices for almost all steel forms increased during the past two weeks. U.S. HRC steel prices continued to increase. By Dec. 25, the price reached $917/st, up 12.4% over the past two weeks. Similarly, the CRC and HDG prices increased by 5.8% and 6.1%, respectively, over the past two weeks to $1,022/st and $1,141/st. The plate price increased by 12.3% to $812/st.
However, wire rod prices remained flat over the past two weeks at $29.39/cwt. Capacity utilization for the week ending Dec. 11 reached 73.2%, up from 71.4% for the week ending Dec. 5.
The dollar index closed at 90.41 on Dec. 23, slightly down from 90.98 on Dec. 11. The dollar reached its lowest point — 89.82 — in the year to date Dec. 17.
Aluminum prices traded sideways. The price closed last week at $2,025/mt (down from $2,034/mt).
The LME three-month copper price increased slightly by 0.7% over the past two weeks, closing last week at $7,811.5/mt.
In the past two weeks, nickel prices breached the resistance level of $17,230/mt but later retraced. The LME three-month nickel price closed last week at $17,013/mt, down from $17,254/mt two weeks prior.
Meanwhile, the tin price closed last week at $20,100/mt, up from $19,505/mt two weeks prior.
Lastly, the zinc price traded sideways over the past two weeks, closing at $2,845/mt from $2,838/mt on Dec. 11.
“Steel prices remain strong as they continued to increase over the last two weeks (as they have since mid-August),” Gobitz added. “We also saw capacity utilization increase as mills extend their lead times. All base metals traded sideways over the past two weeks. Markets seem to have slowed down ahead of the holidays. However, buying organizations should continue to pay close attention to prices.”
By comparison, Q3 adjusted earnings reached $0.51 per diluted share.
USITC launches Section 337 investigation
The USITC has invoked Section 337 of the Trade Act of 1930 to investigate imports of “certain vehicle control systems, vehicles containing the same, and components thereof.”
“Unfair import (a.k.a., Section 337) investigations conducted by the U.S. International Trade Commission most often involve claims regarding intellectual property rights, including allegations of patent infringement and trademark infringement by imported goods,” The UISTC explains on its website regarding the scope of Section 337.
In November, Jaguar Land Rover Limited (of Coventry, United Kingdom), and Jaguar Land Rover North America, LLC (of Mahwah, New Jersey), filed a complaint alleging violation of Section 337. The complaint alleges unfair importation of “certain vehicle control systems, vehicles containing the same, and components thereof” that infringes a patent.
In addition, respondents in the investigation are:
Dr. Ing. h.c.F. Porsche AG, d/b/a Porsche AG, of Stuttgart, Germany
Porsche Cars North America, Inc., of Atlanta, GA
Automobili Lamborghini S.p.A. of Sant’Agata Bolognese, Italy
Automobili Lamborghini America, LLC, of Herndon, VA