Author Archives: Nichole Bastin

The Stainless Monthly Metals Index (MMI) rose by 3.8% month over month.

November 2021 Stainless MMI chart

Nickel continues to be within an overall uptrend. However, LME prices experienced significant volatility throughout October.

Prices dropped as low as $17,810/mt in the early days of the month before they spiked to $20,475/mt by Oct. 21. Prices have since retraced and appear to have consolidated near February highs.

Do you know the five best practices of sourcing metals, including stainless steel?

Base price, extras increase

As stainless steel demand increases while mill capacity remains steady, base prices and surcharges continue to increase.

Effective Nov. 1, Outokumpu announced a base price and extras increase, in addition to adding silicon to its alloy surcharge calculation. The increases affect the 200, 300, as well as 400 series.

Extras rose for products that impact productivity or add complexity to its mix, including tempers, width and gauges. Meanwhile, as ferrosilicon more than doubled in price since September, Outokumpu announced an adder for 301 Silicon followed by the implementation of a silicon component to its alloy surcharge. NAS’ November alloy surcharge for 304 also increased from October.

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.

China’s stainless output expected to rise

Amid the ongoing power crisis that caused metal prices to surge in October, China has eased power curbs in two key stainless-producing provinces.

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The Raw Steels Monthly Metals Index (MMI) dropped by 2.5% month over month.

November 2021 Raw Steels MMI chart

Stop obsessing about the actual forecasted steel price. It’s more important to spot the trend

Auto steel demand shows weakness

auto production line

Ivan Traimak/Adobe Stock

Steel prices appear poised for a decline in coming months as auto steel demand shows weakness and new capacity is set to come online.

According to a report by Bloomberg, U.S. Steel Corp. recently offered “excess prime” steel that was previously earmarked for automotive companies. The firm made 50,000 tons of high-end steel from U.S. Steel Corp.’s Gary, Indiana facility — which is among the primary suppliers to U.S. auto companies — available to buyers after automakers declined to take on expected volumes.

While demand for automobiles remains strong, automakers continue to struggle with the ongoing semiconductor shortage.

Lead times for semiconductors have extended far above an average threshold of 9-12 weeks, hitting 22 weeks in October.

According to the Susquehanna Financial Group, power-management components stand at 25 weeks. Microcontroller lead times have ballooned to 38 weeks.

Falling auto production

Due to such shortages, automakers in recent months have either curtailed production or halted assembly lines altogether. Data from the Federal Reserve showed U.S. auto production plummet by 28.3% from August to September. September auto production fell to a seasonally adjusted annual rate of 1.06 million vehicles.

While some automakers have managed to reopen shuttered factories, production is expected to remain far below average.

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The Copper Monthly Metals Index (MMI) rose by 3.5% for this month’s reading.

Copper had a phenomenal rally since 2020 that saw LME prices ascend nearly 132% to $10,720/mt in May 2021. Since the summer of 2021, however, price action indicates some consolidation after prices tested the $10,250/mt mark earlier in October.

From a technical perspective, prices appear to be trading sideways at a historical resistance level. As such, buyers should watch markets in the coming months for the appearance of a clearer market trend.

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Copper pushed upward after Fed decision

Federal Reserve facade

Aaron Kohr/Adobe Stock

The Federal Reserve concluded its two-day meeting on Nov. 3, which pushed LME copper prices upwards.

Prices saw a 0.74% increase in one day following the Fed’s announcement that interest rates would remain near zero. Federal Reserve Chair Jerome Powell stated at the subsequent news conference, “We do not think it is a good time to raise interest rates because we want to see the labor market heal further.”

Powell’s statement triggered the S&P 500, the Nasdaq 100, the Dow Jones Industrial Average, as well as the Russell 2000 to close at all-time highs.

Alongside the pause in adjustments to interest rates, the Fed announced it would begin around mid-November to unwind the emergency stimulus measures put in place at the dawn of the pandemic, the Financial Times reported. The $120 billion monthly bond purchasing program is set to be gradually tapered. Purchase of treasury securities will fall by $10 billion per month while purchases of agency mortgage-backed securities will fall by $5 billion per month. The expected end point for this withdrawal is around June of 2022.

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The Aluminum Monthly Metals Index (MMI) fell for the first time in nine months, dropping by 1.5%.

November 2021 Aluminum MMI chart

After prices hit the record peak in late October, aluminum started to face some speed bumps when the price attempted to continue to trade upward.

Since Beijing’s intervention into the coal market, LME aluminum prices began to retrace back to mid-August prices. This follows an impressive rally that extended more than a year and saw aluminum outperform nearly all base metals (with the exception of tin).

From a technical perspective, aluminum prices currently lack sufficient bullish signals. October’s price action indicates a substantial risk for an overall trend reversal.

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Section 232 tariffs resolution

tariff

Feng Yu/Adobe Stock

A much-anticipated agreement was reached regarding the Section 232 tariffs between the U.S. and the European Union.

Former President Donald Trump imposed the tariffs in 2018, citing national security concerns under Section 232 of the Trade Expansion Act of 1962. The import duties came in at 25% for steel and 10% for aluminum. In 2020, the Trump administration went on to add tariffs on certain derivatives of aluminum and steel.

Under the new resolution announced in late October, the existing tariffs will be replaced with a tariff-rate quota (TRQ) effective Jan. 1, 2022.

For aluminum, the TRQ will apply to historically-based volumes of E.U. aluminum. Excess volumes that enter the U.S. market will still be subject to a duty of 10% (unless they are subject to an exclusion).

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Before we head into the weekend, let’s take a look back at the week’s news and some of the metals storylines here on MetalMiner: Aluminum prices reach 10-year high while a coup in Guinea threatens to disrupt global bauxite supply, China-Australia iron ore trade surges ahead despite ongoing tensions; and see MetalMiner’s analyst-driven Monthly Metals Index updates for aluminum, raw steels, copper, stainless.

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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.

News for the Week of Sept. 7-10

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crude oil

phonlamaiphoto/Adobe Stock

This morning in metals news: In a bid to aid domestic refiners currently limited by steep energy costs, China announced plans to auction crude oil from its strategic reserves. In other news, Shell declares force majeure as Hurricane Ida’s fallout continues. Also in the news, July steel shipments show 37% year over year rise.

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.

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aluminum ingot stacked for export

Olegs/Adobe Stock

This morning in metals news: Aluminum prices reach 10-year highs after a coup in Guinea threatens to disrupt global bauxite supply. In other news, steep commodity prices send China’s factory-gate inflation to a 13-year high. Also in the news, Hurricane Ida’s damage leaves more than 75% of U.S. Gulf of Mexico oil production offline.

Each month, MetalMiner hosts a webinar on a specific metals topic. This month’s discussion is Carbon Steel 2022: What types of steel contracts to set up and when to execute them. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.
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crude oil

phonlamaiphoto/Adobe Stock

This morning in metals news: Oil price fall nearly 3% on Monday. Chinese steel exports rise in July. Copper and cobalt production to double at Tenke Fungurume mine in the DCR with a $2.5 billion investment from a Chinese firm.

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.

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natural gas

sebos/Adobe Stock

Before we head into the weekend, let’s take a look back at the news that was and some of the metals storylines here on MetalMiner: Soaring natural gas prices and inflation; China’s aims to further reduce steel output; Aluminum prices near a decade high, according to our Monthly Metals Index coverage. Look for the Copper MMI and more next 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.  Read more

semiconductor and automobile

Maxim_Kazmin/Adobe Stock

This morning in metals news: The global semiconductor shortage may continue into the next year or more. In other news, after failing to reach an agreement Thursday on the $1 trillion infrastructure bill, the U.S. Senate aims to finalize it Saturday. Also in the news, South Korea plans to raise its stockpiles of 35 “critical metals.”

Receive the latest short-term and long-term outlook for the full range of industrial metals (base and ferrous) at the annual MetalMiner Forecasting Workshop on Aug. 25.

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