Author Archives: Fouad Egbaria

This morning in metals news: U.S. import prices gained in November; meanwhile, U.S. construction starts surged in November; and, lastly, the Energy Information Administration forecasts record monthly natural gas production in 2022.

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Import prices rise 0.7%

cargo trains

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According to the Bureau of Labor Statistics, U.S. import prices gained by 0.7% in November. The rise follows a 1.5% increase in October.

The index for U.S. imports rose by 11.7% over the last 12 months. Import fuel prices rose by 2.0% in November after a jump of 11.1% in October.

“Prices for nonagricultural industrial supplies and materials advanced 2.0 percent in November, driven by higher prices for fuel, nonferrous metals, and chemicals,”

Construction starts jump in November

U.S. privately owned construction starts reached a seasonally adjusted annual rate of 1,679,000 in November.

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This morning in metals news: U.S. steel capacity utilization ticked up to 82.4% last week, as steel prices continue to cool; meanwhile, Nucor Corporation announced it is expanding its production footprint by acquiring majority ownership of California Steel Industries; and, lastly, U.S. stainless steel imports declined in October.

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US steel capacity utilization hits 82.4%

steel production

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The U.S. steel capacity utilization rate rose to 82.4% for the week ending Dec. 11, the American Iron and Steel Institute reported this week.

The rate increased from 81.9% the previous week.

U.S. steel output reached 1.82 million tons last week, up 0.6% from the previous week. Meanwhile, output in the year to date is up 19.4% to 89.9 million tons.

Meanwhile, U.S. steel prices continue to cool after rising for more than a year.

U.S. hot rolled coil reached $1,731 per short ton last week, or down 6.9% month over month, according to MetalMiner Insights data. Cold rolled coil fell 1.9% to $2,086 per short ton. Hot dipped galvanized fell 4.4% to $2,105 per short ton.

Nucor to acquire California Steel Industries

In M&A news, U.S. steelmaker Nucor announced it is acquiring a majority stake in California Steel Industries.

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The Renewables Monthly Metals Index (MMI) ticked up 4.5% for this month’s value.

December 2021 Renewables MMI chart

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

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EIA: renewables account for 20% of electricity generation

In its most recent Short-Term Energy Outlook, the Energy Information Administration reported the U.S.’s share of electricity generation from renewables will come in at about 20% in 2021.

That share is at about the same level in 2020, EIA reported.

Meanwhile, it forecast the share of renewables for electricity generation to rise to 22% in 2022. Renewables are expected to gain from a decline in natural gas use.

“The natural gas share declines in 2022 as a result of continued high fuel costs and an increasing share of renewable generation,” EIA noted. “As a result of the higher expected natural gas prices, the annual forecast share of electricity generation from coal rises from 20% in 2020 to 23% in 2021 and then drops slightly to 22% in 2022.”

The EIA forecast the U.S. will add 16.2 GW in utility-scale solar capacity in 2021. Meanwhile, it forecast an addition of 20.9 GW in 2022.

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The Global Precious Monthly Metals Index (MMI) fell 4.7% for this month’s MMI value, as gold prices slipped to close November.

December 2021 Global Precious MMI chart

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Gold price ups and downs

gold price

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As MetalMiner Insights subscribers may have noted — the Insights platform now offers a suite of precious metals price points — the U.S. gold bullion price surged in the middle of the month before falling back.

After opening the month at $1,784 per ounce, the U.S. gold bullion price surged to $1,867 per ounce by mid-month. However, the price backtracked down to $1,785 per ounce as of the start of December.

Meanwhile, the U.S. dollar, which historically correlates inversely with gold, picked up momentum in November. After falling to just over 93 to close October, the U.S. dollar rose as a high as 96.88 as of Thanksgiving. Since then, the dollar fell closer to 96 before trading sideways.

Inflation at nearly 40-year high

Earlier this month, the U.S. government reported the Consumer Price Index for the last 12 months increased by 6.8%. Inflation is at its highest level in nearly 40 years.

According to the Bureau of Labor Statistics, the 12-month increase marked the largest jump since June 1982.

Gold prices also posted gains Friday on the heels of the latest inflation report.

Meanwhile, elsewhere in the inflation report, higher energy prices continued to weigh on consumers.

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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 coverage here on MetalMiner, including coverage of aluminum prices, a General Motors collaboration with MP Materials aimed at developed a fully integrated U.S. rare earth magnet supply chain and much more:

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

Week of Dec. 6-10 (aluminum prices, rare earth magnet supply chain and more)

aluminum price

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  • Nucor Corporation announced plans to build a rebar micro mill in the South Atlantic region. The company already has rebar micro mills in Missouri and Florida.
  • U.S. automotive sales remain depressed as a result of low inventory.
  • U.S. construction spending through the first 10 months of the year jumped 7.5% year over year, the Census Bureau reported.
  • The U.S. steel capacity utilization rate dipped to 81.9% last week, the American Iron and Steel Institute reported.
  • Aluminum prices trended sideways in November, MetalMiner analyst Nichole Bastin explained.
  • Energy prices are on the rise in Europe, putting the squeeze on both residential and industrial users.
  • Like aluminum prices, copper prices also consolidated in November after an October spike.
  • Bastin checked in on the stainless steel market, including nickel price volatility.
  • General Motors said it will invest $51 million toward equipment for its aluminum die casting foundry in Bedford, Indiana.
  • Stuart Burns also took a look at aluminum prices and China’s impact on the aluminum market.
  • China introduced a draft plan to reduce emissions from metals by 5% by 2025.
  • Lastly, in the rare earths space, General Motors announced a collaboration with MP Materials to develop a fully integrated supply chain for rare earth magnets. MP materials operates the Mountain Pass rare earths mine and processing facility in California.

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The Rare Earths Monthly Metals Index (MMI) rose by 11.3% for this month’s reading.

December 2021 Rare Earths MMI chart

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GM, MP Materials to collaborate on rare earths magnet supply chain

rare earths

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General Motors announced it will collaborate with MP Materials to develop a “fully integrated” U.S. supply chain for rare earth magnets.

“Under the long-term agreement, MP Materials will supply U.S.-sourced and manufactured rare earth materials, alloy and finished magnets for the electric motors used in the GMC HUMMER EV, Cadillac LYRIQ, Chevrolet Silverado EV and more than a dozen models using GM’s Ultium Platform, with a gradual production ramp that begins in 2023,” GM said in a release.

China’s dominance of the global rare earths mining and processing sector has led the U.S. to pursue development of its own rare earths supply chain in order to mitigate dependence on China.

The Pentagon previously reached an agreement with Australia’s Lynas Rare Earths Limited to build a light rare earths separation facility in Texas.

“We are building a resilient and sustainable EV manufacturing value chain in North America, from raw materials to cell manufacturing to electric drive motors and beyond, further accelerating GM’s vision to support a mass market for EVs,” said Shilpan Amin, GM vice president, Global Purchasing and Supply Chain. “Our work with MP Materials is another bold step forward that will help ensure that we meet our goal to lead the EV industry in North America in more than just sales.”

MP to build magnet factory in the US

Further strengthening the U.S. supply chain, MP announced it will build a rare earths magnet factory in Fort Worth, Texas.

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This morning in metals news: General Motors will invest $51 million to install equipment at its Bedford, Indiana aluminum casting die foundry; nickel prices have gained this past month; and, lastly, the U.K. trade minister reportedly told the U.S. they could consider expanding tariffs on U.S. goods if the U.S. does not remove the Section 232 tariffs on steel and aluminum.

Upcoming negotiation on your aluminum buy? Make sure you know how your service centers will negotiate with you

GM to invest in aluminum die casting foundry

General Motors headquarters in Detroit, Michigan

Katherine Welles/Adobe Stock

General Motors is investing $51 million to install new equipment at its aluminum die casting foundry in Bedford, Indiana.

The new equipment will support support the manufacture of “drive unit castings for the upcoming Chevrolet Silverado EV and other current casting applications.”

GM will unveil its all-electric Silverado at the CES trade show Jan. 5, 2022, in Las Vegas, Nevada.

Nickel prices rise

Nickel prices have gained over the last month, according to MetalMiner Insights data.

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This morning in metals news: a cold winter season will continue to put strain on European energy supplies; the U.S. international trade deficit declined from September to October; and, lastly, U.S. job openings increased in October.

Does your company have a zinc buying strategy based on current zinc price trends?

Energy prices under the microscope amid chilly weather in Europe

natural gas tap

PhotocreoBednarek/Adobe Stock

Europe is bracing for the winter season, which brings with it further strain on already strained energy supplies.

Storm Barra impacted Ireland and the United Kingdom on Tuesday, bombarding the islands with rain and snow.

According to ICE data, Dutch TTF gas futures for January 2022 picked up in November, rising from €67 per megawatt hour Nov. 1 to €96 per megawatt hour this week.

As we noted on the heels of the October price spike, rising energy costs impacted European zinc producers, like Nyrstar and Glencore. LME zinc jumped to $3,757 per metric ton in October but fell to around $3,200 to start November. Since then, the price has trended sideways but remains elevated, according to MetalMiner Insights data.

Russia is the largest supplier of natural gas supply to Europe; rising gas costs contributed to production cutbacks from the aforementioned zinc producers. On Nov. 22, the U.S. announced sanctions against two vessels and one Russia-linked entity related to the Nord Stream 2 pipeline.

Meanwhile, on Tuesday, President Joe Biden spoke with Russian President Vladimir Putin amid rising tensions at the Russia-Ukraine border.

“President Biden voiced the deep concerns of the United States and our European Allies about Russia’s escalation of forces surrounding Ukraine and made clear that the U.S. and our Allies would respond with strong economic and other measures in the event of military escalation,” the White House said in a release. “President Biden reiterated his support for Ukraine’s sovereignty and territorial integrity and called for de-escalation and a return to diplomacy.”

 

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This morning in metals news: steel capacity utilization fell to 81.9%; lead prices have lost ground this month; and, lastly, Liberty Steel announced the restart of its Georgetown, South Carolina plant.

During the last MetalMiner webinar of 2021, the MetalMiner team will take a look ahead and overview price predictions for 2022. To attend, sign up on the MetalMiner Events page

Steel capacity utilization rate falls to 81.9%

steel production

photollurg/Adobe Stock

The U.S. steel capacity utilization rate fell to 81.9% for the week ending Dec. 4, the American Iron and Steel Institute reported.

U.S. steel output during the week totaled 1.81 million net tons, or down 1.6% from the previous week. For the year to date, steel production totaled 88.08 million net tons, or up 19.6% year over year, at a capacity utilization rate of 81.6%.

U.S. steel prices began to backtrack in September after a year of uninterrupted rises.

Hot dipped galvanized closed last week at $2,131 per short ton, or down 3.8% month over month, according to MetalMiner Insights data.

Hot rolled coil closed last week at $1,770 per short ton, or down 6.1% month over month.

Lead prices retreat

Meanwhile, lead prices have lost ground so far this month.

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The Construction Monthly Metals Index (MMI) fell by 6.1% for this month’s reading, as U.S. construction spending rose by 7.5% year over year in the first 10 months of the year.

December 2021 Construction MMI chart

MetalMiner is hosting its final webinar of the calendar year tomorrow — Wednesday, Dec. 8 — during which the MetalMiner team will overview price predictions for 2022. To attend, visit the MetalMiner Events page

US construction spending up in October

housing starts

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U.S. construction spending came in at a seasonally adjusted annual rate of $1,598 billion in October, up 0.2% from September, according to the Census Bureau.

Furthermore, the October spending rate increased by 8.9% compared with October 2020 spending.

Through the first 10 months of the year, U.S. construction spending totaled $1,323.1 billion, or up 7.5% year over year.

Private construction spending in October reached a seasonally adjusted annual rate of $1,245.0 billion, or down 0.2% from September. Within private construction, residential construction reached a rate of $774.7 billion in October, down 0.5% from September. Nonresidential construction rose 0.2% to $470.3 billion.

Meanwhile, public construction spending rose 1.8% to a rate of $353.0 billion. Educational construction spending rose 0.2% to $82.2 billion. Highway construction spending rose 2.4% to $102.5 billion.

Nucor to build third rebar micro mill

As we reported yesterday, Nucor Corporation on Monday announced plans to build its third rebar micro mill.

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