Author Archives: Fouad Egbaria

This morning in metals news: the United States International Trade Commission this week issued a ruling on imports of aluminum foil from five countries; Ford of Europe reported a decline in sales and European market share; and, lastly, job openings rates declined in 21 states in August, the Bureau of Labor Statistics reported.

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USITC rules on aluminum foil

aluminum foil

Alex/Adobe Stock

The United States International Trade Commission this week ruled imports of aluminum foil from five countries are being dumped into the U.S. and illegally subsidized.

The five countries are Armenia, Brazil, Oman, Russia and Turkey.

The Department of Commerce will now issue countervailing duty orders on imports of aluminum foil from Oman and Turkey. Meanwhile, the Department of Commerce will issue antidumping duty orders on aluminum foil from all five countries.

Ford of Europe reports drop in Q3 sales

Ford of Europe reported Q3 sales declined by 35.2% year over year, down to 194,460 vehicles.

In the year to date, however, its sales fell 1.9% year over year.

The automaker’s European market share fell 1.3 percentage points to 6.3% in Q3 2021.

Job openings rates down in 21 states

Job openings rates declined in 21 states in August, the Bureau of Labor Statistics reported.

Rates were flat in 28 states and increased in one state.

Rate decreases were the largest in Nevada, West Virginia and Hawaii.

Meanwhile, the number of hires declined in 17 states in August, with the largest drops coming in Illinois, New Jersey and Ohio.

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This morning in metals news: BMW announced Wednesday it will source steel from Swedish firm H2 Green Steel; meanwhile, miner Freeport-McMoRan today reported its third-quarter and nine-month 2021 results; and, finally, metal prices remain elevated but have taken a step back this week.

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BMW to source green steel from Swedish firm

BMW logo

bizoo_n/Adobe Stock

Automaker BMW reported it will source steel using wind and hydroelectric power from Swedish firm H2 Green Steel.

“From 2025 on, the company plans to source steel produced with up to 95% less CO2 emissions and without requiring fossil resources such as coal,” BMW said. “The BMW Group has now reached an agreement to this effect with the Swedish startup H2 Green Steel, which uses hydrogen and only green power from renewable energies for steel production. Owing to its particularly energy-intensive manufacturing process, steel production is considered one of the main sources of global CO2 emissions.”

FreeportMcMoRan reports Q3 results

Freeport-McMoRan reported Q3 2021 net income of $1.4 billion. The figure marked a jump from $329 million in Q3 2020.

For the nine-month period ending Sept. 30, 2021, net income totaled $3.2 billion. Meanwhile, in the same period in 2020, net income amounted to a loss of $109 million.

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U.S. housing starts declined in September from the previous month, the Census Bureau reported this week.

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 month, on Thursday, Oct. 28, the MetalMiner team will delve into the benefits of artificial intelligence and technical analysis. 

Housing starts fall

housing starts

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Housing starts in September reached a seasonally adjusted annual rate of 1,555,000, the Census Bureau reported.

The September rate marked a 1.6% decline from the previous month. However, the rate increased by 7.4% from September 2020.

Furthermore, single‐family housing starts reached a rate of 1,080,000, virtually unchanged from the revised August figure. Meanwhile, the September rate for units in buildings with five units or more reached 467,000.

Meanwhile, privately owned housing units authorized by building permits fell by 7.7% from August to September. However, the September 2021 rate of 1,589,000 came in virtually unchanged from September 2020.

Mortgage rates reach highest level since April

Prospective homebuyers are currently facing the highest mortgage rates since April, according to Freddie Mac.

The 30-year fixed rate mortgage weekly average reached 3.05% as of Oct. 14. The rate ticked up from 2.99% the previous week and 2.81% a year ago.

Meanwhile, the 15-year rate reached 2.3%, up from 2.23% the previous week. However, the 15-year rate came in down from 2.35% from a year ago.

Construction material prices rise

Construction material prices have continued to rise over the last year.

According to the Associated General Contractors of America, prices contractors paid for materials came in higher than prices contractors charged during the 12-month period ending in September.

“Construction materials costs remain out of control despite a decline in some inputs last month,” said Ken Simonson, the association’s chief economist. “Meanwhile, supply bottlenecks continue to worsen.”

The producer price index (PPI) for nonresidential construction increased by 5.2% over the last 12 months, the AGCA reported. However, the index fell by 0.9% last month.

Among metal products, the AGCA reported the PPI for steel mill products increased by 134% compared to last September. Meanwhile, the index for copper and brass mill shapes jumped by 39.5%. The index for aluminum mill shapes increased 35.1%.

Amid ongoing material shortages and supply-chain disruptions, the AGCA argued removing tariffs would alleviate some of the current pressure.

“The tariffs on lumber, steel, aluminum, and many construction components have added fuel to already overheated prices,” AGCA CEO Stephen E. Sandherr said. “Ending the tariffs would help immediately, while other steps should be taken to relieve supply-chain bottlenecks.”

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This morning in metals news: U.S. steel capacity utilization reached 85.3% last week; meanwhile, Lightsource bp touted the launch of a Colorado solar project and the world’s “first steel mill to be powered largely by solar energy”; and, lastly, Rio Tinto announced new decarbonization targets.

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US steel capacity utilization rises to 85.3%

hot rolled steel

niteenrk/Adobe Stock

The U.S. steel capacity utilization rate reached 85.3% for the week ending Oct. 16, the American Iron and Steel Institute (AISI) reported.

Steel production during the week totaled 1.88 million net tons, up 1.3% from the previous week. Furthermore, steel output during the week rose by 21.5% year over year.

Meanwhile, in the year to date, steel production totaled 75.1 million net tons. The total marked a 20.3% year-over-year increase.

Pueblo steel mill goes solar

Lighthouse bp, in collaboration with Xcel Energy and EVRAZ North America, announced the launch of the new 300 MW Bighorn Solar project.

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This morning in metals news: copper prices have surged this month; median weekly earnings for full-time wage and salary workers are up; and WTI crude oil prices have ticked up since last week.

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Copper price surge

copper smelter

Bombardho/Adobe Stock

Earlier today, MetalMiner’s Stuart Burns delved into copper market stresses, including short-term (at the very least) supply concerns.

“Mine supply is likely to improve, if not this year, then gradually in 2022,” Burns explained. “But that may fail to work through into lower refined copper prices if capacity bottlenecks in China are not resolved this winter. Indeed, the greater ore supply could result in higher treatment charges as refiners find they have the whip hand in a plentiful ore supply market but constrained refining capacity environment.

“In the short term, there appears more risk to the upside than the down.”

After trending mostly sideways for a few months, copper has awoken this month.

LME three-month copper closed last week at $10,275 per metric ton, up by 8.65% month over month. The price is now back to its highest level since May.

Median weekly earnings up 0.7% year over year

Median weekly earnings for full-time wage and salary workers reached $1,001 in Q3 2021, the Bureau of Labor Statistics reported.

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Zinc prices have surged to 14-year highs this week, rising by over 24% on a month-over-month basis.

The LME three-month zinc price closed Friday at $3,757 per metric ton, according to MetalMiner Insights data. Chinese primary cash zinc closed Monday at $742 per metric ton, up 20.86% month over month.

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Power costs and zinc prices

zinc

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As MetalMiner’s Stuart Burns reported Friday, surging power costs around the world are weighing on a number of industries, including metals.

Belgian zinc producer Nyrstar last week announced output cutbacks, citing power costs. Effective Oct. 13, the Belgian firm said it would reduce output at its three European smelters by up to 50%.

“Zinc, like aluminum, is smelted using vast amounts of electricity. Power is rationed and as power costs rise, as is happening in China and Europe, so does zinc,” Burns commented Monday.

Nyrstar said its plants are fully electrified. Its operations in the Netherlands and Belgium purchase electricity predominantly generated from renewable power sources, Nyrstar said.

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This morning in metals news: the World Steel Association forecast steel demand to rise by 4.5% this year; U.S. import prices increased in September; and, lastly, the Energy Information Administration forecasts U.S. coal-fired electricity generation will increase this year for the first time since 2014.

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Steel demand to rise 4.5%

China steel production

Zhao Jiankang/AdobeStock

The onset of the COVID-19 pandemic disrupted supply chains around the world and, for a time, dented global steel demand.

However, the World Steel Association forecast steel demand will finish up 4.5% in 2021. The rise comes after a just 0.1% increase in 2020. Meanwhile, the World Steel Association forecast demand to rise by 2.2% in 2022.

“2021 has seen a stronger than expected recovery in steel demand, leading to upward revisions in our forecast across the board except for China,” said Saeed Al Remeithi, chairman of the World Steel Association Economics Committee. “Due to this vigorous recovery,  global steel demand outside China is expected to return earlier than expected to its pre-pandemic level this year.

“Strong manufacturing activity bolstered by pent-up demand is the main contributor. The developed economies have outperformed our earlier expectations by a larger margin than the developing economies, reflecting the positive benefit of higher vaccination rates and government support measures.”

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Before we head into the weekend, let’s take a look back at the week that was and the metals storylines here on MetalMiner, including aluminum prices, rising power costs and much 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.

Week of Oct. 11-15 (aluminum prices, power costs and more)

aluminum price

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

October 2021 Renewables MMI chart

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

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Renewables make progress, but coal, oil saw 2021 comeback, IEA says

The International Energy Agency (IEA) recently released its 386-page World Energy Outlook 2021 report, in which it notes positive trends in renewable energy but setbacks in the form of recovering coal and oil use in 2021.

“The rapid but uneven economic recovery from last year’s Covid-induced recession is putting major strains on parts of today’s energy system, sparking sharp price rises in natural gas, coal and electricity markets,” the IEA reported. “For all the advances being made by renewables and electric mobility, 2021 is seeing a large rebound in coal and oil use. Largely for this reason, it is also seeing the second-largest annual increase in CO2 emissions in history.”

The IEA emphasized significant further investment is needed to reach the 1.5 degree stabilization goal laid out in the Net Zero Emissions by 2050 Scenario released in May 2021. The IEA said that transition requires “a surge in annual investment in clean energy projects and infrastructure to nearly USD 4 trillion” by 2030.

In many renewables applications, cost is a major obstacle, particularly for critical minerals or metals.

“Higher or more volatile prices for critical minerals such as lithium, cobalt, nickel, copper and rare earth elements could slow global progress towards a clean energy future or make it more costly,” the IEA added. “Price rallies for key minerals in 2021 could increase the costs of solar modules, wind turbines, electric vehicle (EV) batteries and power lines by 5-15%. If maintained over the period to 2030 in the NZE, this would add USD 700 billion to the investment required for these technologies.”

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This morning in metals news: the Energy Information Administration forecasts natural gas prices will remain elevated this winter; meanwhile, Rio Tinto said it is working on new technology for the production of low-carbon steel; and, lastly, miner BHP and South Korean steelmaker POSCO signed a memorandum of understanding to explore the reduction of greenhouse gas emissions in the steelmaking process.

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

Natural gas prices to remain elevated this winter

natural gas tap

PhotocreoBednarek/Adobe Stock

To the chagrin of industrial users and residential consumers alike, natural gas prices are likely to remain high this winter, the Energy Information Administration says.

“In our October Short-Term Energy Outlook (STEO), we forecast that natural gas spot prices at the U.S. benchmark Henry Hub will average $5.67 per million British thermal units (MMBtu) between October and March, the highest winter price since 2007–2008,” the EIA said. “The increase in Henry Hub prices in recent months and in our forecast reflect below-average storage levels heading into the winter heating season and strong demand for U.S. liquefied natural gas (LNG), even though we’ve seen relatively slow growth in U.S. natural gas production.”

However, the EIA forecasts Henry Hub prices will decline after Q1 2022.

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