Author Archives: Fouad Egbaria

This morning in metals news: the U.S. steel capacity utilization rate rose to 85.3% for the week ending Sept. 11; Norsk Hydro signed an energy deal; and, lastly, aluminum prices have continued to skyrocket.

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Steel capacity utilization rises to 85.3%

steelmaking in an EAF

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The U.S. steel capacity utilization rate picked up to 85.3% for the week ending Sept. 11, the American Iron and Steel Institute (AISI) reported.

U.S. steel production during the week totaled 1.88 million net tons. Production for the week rose by 0.9% from the previous week. Furthermore, output jumped by 22.4% year over year.

For the year to date, production totaled 65.8 million net tons at a capacity utilization rate of 80.8%.

Hydro signs natural gas deal

Oslo-based Norsk Hydro said it had signed a 15-year deal for the supply of liquefied natural gas (LNG) to its Alunorte alumina refinery in Brazil.

Hydro signed the supply deal with New Fortress Energy.

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This morning in metals news: global aluminum production picked up in July; the WTI crude price continues to hover around $70 per barrel; and, lastly, the Producer Price Index for final demand increased by 0.7% in August.

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Aluminum production increases in July

aluminum ingot

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Global aluminum production totaled 5.74 million metric tons in July, the International Aluminum Institute reported.

The total marked an increase from 5.52 million metric tons in July 2020. Furthermore, the total increased from 5.56 million tons in June 2021.

China’s estimated production rose to 3.34 million metric tons in July 2021. The total marked an increase from 3.24 million tons in June 2021.

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This morning in metals news: U.S. steel capacity utilization dropped slightly last week; the number of drilled but uncompleted oil wells in the U.S. declined in July; and, lastly, the construction sector shed 3,000 jobs in August.

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Steel capacity utilization hits 84.5%

hot rolled steel

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The U.S. steel capacity utilization rate for the week ending Sept. 4 fell to 84.5%, the American Iron and Steel Institute (AISI) reported this week.

The rate marked a decline from 84.9% the previous week.

Meanwhile, steel output last week totaled 1,866,000 net tons, AISI reported. The total marked a 0.4% decline from the previous week but a 23.5% year-over-year rise.

DUCs decline in July

Meanwhile, in energy news, the Energy Information Administration (EIA) reported drilled but uncompleted (DUC) wells in the U.S. fell to their lowest monthly level in July since November 2017.

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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:

Western European steel factory

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Week of Aug. 30-Sept. 3

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This morning in metals news: pre-Labor Day retail gasoline prices are at their highest level in seven years; meanwhile, payroll employment rose by 235,000 in August; and, lastly, Norilsk Nickel has signed an agreement to build a liquefied natural gas icebreaker.

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Pre-Labor Day gasoline prices rise

gasoline pump

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To the chagrin of those driving this holiday weekend, pre-Labor Day gasoline prices have reached their highest level since 2014, the Energy Information Administration reported.

The average gas price reached $3.15 per gallon as of Aug. 30.

Furthermore, the price marked a 42% jump compared with the same point in 2020.

Payroll employment up 235K

U.S. payroll employment picked up by 235,000 in August, the Bureau of Labor Statistics reported.

Furthermore, monthly job growth so far this year has averaged 586,000 per month.

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The Automotive Monthly Metals Index (MMI) fell by 1.4% for this month’s MMI reading.

September 2021 Automotive MMI chart

 

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US auto sales

semiconductor and automobile

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Ford Motor Co. reported its August retail sales increased by 6.5% from the previous month.

However, retail sales declined by 39.6% on a year-over-year basis. Total sales fell by 33.1% year over year.

Ford truck and SUV sales fell by 35.7% and 30.4%, respectively.

The automaker also touted a record August for electric vehicle sales.

“Electrified vehicle sales were up 67.3 percent over last year for a total of 8,756 vehicles,” Ford said. “Electrified vehicles are bringing in new customers to Ford at a rate that is more than 8 points higher than Ford’s overall conquest rate.”

Meanwhile, General Motors, which reports on a quarterly basis, in July reported Q2 sales rose by 40%. In a letter to shareholders last month, CEO Mary Barra underlined the automaker’s effort toward achieving zero emissions. In addition, she said GM aims to develop “a full EV portfolio that doesn’t depend on partial solutions like hybrids and ‘electrified’ ICE vehicles.”

Honda, meanwhile, reported August sales fell by 15.6%, citing “industrywide parts supply issues.”

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This morning in metals news: new orders for manufactured goods posted an increase in July from the previous month; meanwhile, U.S. productivity rose by 2.1% in Q2 2021; and, lastly, the U.S. goods and services trade deficit fell from June to July.

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New orders for manufactured goods rise 0.4%

automotive production

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New orders for manufactured goods rose by 0.4% in July, the U.S. Census Bureau reported today.

Furthermore, new orders for manufactured goods have increased in 14 of the last 15 months. July orders amounted to a value of $508.1 billion.

New orders had increased by 1.5% in June.

Productivity jumps 2.1%

U.S. nonfarm labor productivity increased by 2.1% in July, the Bureau of Labor Statistics reported.

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This morning in metals news: U.S. construction spending ticked up by 0.3% in July, the Census Bureau reported; meanwhile, unemployment rates declined in 388 of 389 metropolitan areas of the U.S. in July compared with July 2020; and, lastly, shale natural gas production from the Appalachian Basin hit record levels in the first half of 2021.

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US construction spending rises in July

construction site

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July construction spending reached a seasonally adjusted annual rate of $1,231 billion, the Census Bureau reported.

The July rate marked an increase of 0.3% from the previous month.

Residential construction spending reached a rate of $773.0 billion in July, or up 0.5%. Meanwhile, nonresidential reached a rate of $458.0 billion in July, down 0.2% from the previous month.

Unemployment declines

Reflecting improving economic conditions, unemployment rates in 388 of 389 U.S. metropolitan areas dropped in July compared with July 2020 rates, the Bureau of Labor Statistics reported.

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While much of the world still depends on fossil fuels, demand for battery metals is surging.

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Battery metal demand on the rise

battery energy storage

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South African platinum and palladium producer Sibanye-Stillwater said increasing demand for battery metals is already impacting supply.

“While not yet having material impact on internal combustion engine vehicle sales, increasing demand for battery metals to meet requirements for electric vehicle production is already starting to have substantial implications for battery metal supply,” the South African firm said.

In short, the world will need to expand supply in order to meet that rising demand.

Demand for a variety of critical metals needed for the transition to renewables will be significant. Demand for everything from copper to cobalt is set to skyrocket, the IEA explained its in report titled “The Role of Critical Minerals in Clean Energy Transitions.”

Today’s supply and investment plans for many critical minerals “fall well short” of what will be needed, the IEA said.

With demand set to increase many times over in the years ahead, there will need to be additional investment.

“The resultant increased demand for battery metals to support a prolonged expansion of the global battery electric vehicle (BEV) fleet over the next two to three decades, is going to require commensurate increase in the supply of battery metals,” Sibanye-Stillwater added. “Primary expansion of the scale needed to meet BEV growth projected by some market commentators, will be challenging.”

Steps toward the future

South Africa accounts for 70% of global production of platinum, used in catalytic converters to curb harmful emissions from automotive exhaust.

The South African firm touted its various efforts in the battery metals space. The firm acquired an initial stake in the Keliber lithium project in Finland. Furthermore, it made a proposal for the acquisition of the Sandouville nickel refinery in France.

Platinum, palladium output

Sibanye-Stillwater reported platinum and palladium production from its U.S. operations of 298,301 ounces for the six-month period ending June 30, 2021.

The total marked an increase from 297,740 ounces in H1 2020. However, output declined from the 305,327 ounces in H2 2020.

Meanwhile, 4E PGM (i.e., platinum, palladium, rhodium and gold) output in South Africa totaled 894,165 ounces in H1 2021. In H1 2020, 4E PGM output from the firm’s South Africa operations totaled 630,912 ounces.

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This morning in metals news: U.S. steel capacity utilization dipped to 84.9% last week; North American Stainless said it is maintaining fuel surcharge; and, lastly, RUSAL earlier this month reported its interim H1 2021 results.

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Steel capacity utilization dips to 84.9%

steelmaking in an EAF

nikitos77/Adobe Stock

U.S. steel capacity utilization dipped to 84.9% for the week ending Aug. 28, the American Iron and Steel Institute reported.

Steel output during the week reached 1.87 million net tons. That weekly total marked a decline of 0.2% from the previous week. However, output increased by 26.9% on a year-over-year basis.

For the year to date, steel production reached 62.0 million net tons. Capacity utilization during that period reached 80.5%. During the same period in 2020, the rate reached just 66.6%, with output at 51.7 million net tons.

NAS updates fuel surcharge

North American Stainless (NAS) today said it will maintain its fuel surcharge of 27% for stainless flat and long products.

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