Articles in Category: Commodities
scrap steel

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This morning in metals news: global steel groups renewed calls for the Global Forum on Steel Excess Capacity to continue its work targeting steel overcapacity; Freeport-McMoRan released its Q3 financial results; and, finally, U.S. natural gas exports to Mexico have increased.

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Steel groups call for renewed emphasis on steel overcapacity

Groups around the world have asked governments to “intensify” their work with the Global Forum on Steel Excess Capacity.

“Steel industries throughout the world expressed tremendous concern about the recent increase in steel overcapacity at a time when steel demand is severely depressed by the COVID-19 pandemic, reversing a trend of gradual decreases in overcapacity in the three years after the GFSEC was established (2016 – 2019),” the American Iron and Steel Institute (AISI) said in a release.

Among the action items suggested by the groups included development of “stronger disciplines” related to industrial subsidies. In addition, the groups called for upholding “effective trade remedies” in order to ensure a level playing field.

Freeport-McMoRan releases Q3 financials

Miner Freeport-McMoRan released its Q3 financials today, reporting net income of $329 million, up from a loss of $207 million in Q3 2019.

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Steel production

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This morning in metals news: the U.S. steel sector’s capacity utilization rate for the week ending Oct. 10 reached 67.9%; copper prices dropped Tuesday; and global liquid fuel outages increased in 2020, according to the Energy Information Administration.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

Steel sector capacity utilization rate reaches 67.9%

The U.S. steel sector’s capacity utilization rate rose to 67.9% for the week ending Oct. 10, the American Iron and Steel Institute (AISI) reported.

The rate increased from 66.6% the previous week but declined from the 78% posted during the same week in 2019.

Meanwhile, steel output for the week ending Oct. 10 totaled 1.50 million net tons, up 1.2% from the previous week. Output during the aforementioned week, however, declined 16.8% year over year.

Copper price falls

In addition to steel capacity utilization, the copper price slipped on Tuesday, Reuters reported.

LME three-month copper fell 0.5% on Tuesday to $6,705 per metric ton, according to Reuters.

Liquid fuel outages rise in 2020

Finally, according to the Energy Information Administration, the number of liquid fuel outages has increased in 2020.

“So far in 2020, monthly oil supply disruptions have averaged 4.6 million barrels per day (b/d) and reached 5.2 million b/d in June, the highest monthly levels since at least 2011, when the U.S. Energy Information Administration (EIA) began tracking monthly liquids production outages,” the EIA reported. “Global oil supply disruptions averaged 3.1 million b/d in 2019, and rising outages in Iran have been the main drivers of the year-on-year increase.”

Furthermore, Libya, Iran and Venezuela were the primary contributors to the outages, the EIA reported.

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U.S. adds aluminum sheet tariffs to 18 countries

The U.S. is imposing tariffs on aluminum sheet imports from array of countries that the Commerce Department sees as trying to exploit the lack of Chinese aluminum in the U.S. market after tariffs were placed on it in 2018, according to USAToday.

The tariffs “will range from the single digits for Bahrain to anywhere from 52% to 132% for Germany,” the article states.

The affected countries exported $2 billion in aluminum in 2019, the USAToday article reports. The tariffs target Bahrain, Brazil, Croatia, Egypt, Germany, Greece, India, Indonesia, Italy, Oman, Romania, Serbia, Slovenia, South Africa, South Korea, Spain, Taiwan and Turkey.

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Aluminum Association CEO Tom Dobbins said in a statement: “The Commerce Department’s findings confirm that foreign producers relied on artificially low prices to rapidly increase their aluminum sheet exports to the United States, just as unfairly traded imports from China were beginning to withdraw from the market.”

Hurricane slows oil, gas production

Hurricane Delta hobbled oil and gas production in the Gulf of Mexico as it approached and made landfall Friday in Louisiana, but energy companies were returning crews to offshore sites to assess damage and restart operations, Reuters reports. As of Sunday, 91% of oil production and 62% of natural gas production were idled by the hurricane, Reuters reports.

Caterpillar eyes driverless machinery to blunt COVID crisis

Caterpillar’s autonomous driving technology, which can be added to machines, is helping the U.S. heavy equipment maker mitigate the slow sales on its main machinery because of the coronavirus crisis, Reuters reports.

“With both small and large customers looking to protect their operations from future disruptions, demand has surged for machines that don’t require human operators on board,” the article states.

“Sales of Caterpillar’s autonomous technology for mining operations have been growing at a double-digit percentage clip this year compared with 2019, according to previously unreported internal company data shared with Reuters. By contrast, sales of its yellow bulldozers, mining trucks and other equipment have been falling for the past nine months.”

Mining giant Rio Tinto signed a deal with Caterpillar last year for self-driving trucks, autonomous blast drills, loaders and other machines for the construction of the Koodaideri iron ore mine in Australia, Reuters reports.

Are you on the hook for communicating the company’s steel performance to the executive team? See what should be in that report!

steel shipment

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This morning in metals news: U.S. steel prices have made significant gains in recent weeks; exports of liquefied natural gas (LNG) from two key Louisiana export terminals have resumed after Hurricane Laura; the coronavirus pandemic has impacted tin production in Bolivia.

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U.S. steel prices rise

U.S. steel prices have posted significant gains of late. HRC, for example, closed Wednesday at $589 per short ton, up 17.33% month over month.

Meanwhile, the CRC price closed Wednesday at $775 per short ton, up 15.5% month over month.

Finally, U.S. HDG closed Wednesday at $850 per short ton, up 12.73% month over month.

LNG exports resume from terminals hit by Hurricane Laura

Among other impacts, Hurricane Laura disrupted activities at two LNG export terminals in Louisiana.

However, on the heels of the hurricane, the Sabine Pass terminal resumed exports Sept. 11, per the Energy Information Administration. Sabine Pass is the largest LNG export facility in the U.S.

However, the resumption of activity at Cameron terminal did not occur until Oct. 5 due to persisting infrastructural damage at the facility.

Furthermore, the next hurricane on the way could lead to further damage.

“Currently, Hurricane Delta, a Category 4 storm in the Gulf of Mexico, is expected to make landfall in Louisiana on Friday, October 9,” the EIA reported. “Depending on the path of Hurricane Delta, Cameron and Sabine Pass may take precautionary measures and temporarily suspend operations as they did before Hurricane Laura.”

Tin output in Bolivia

The coronavirus pandemic has impacted tin production in Bolivia, the International Tin Association (ITA) reported this week.

Tin concentrate production in the first quarter of the year fell 30% year over year.

In addition, coronavirus-related closures prevented production 2,600 tonnes of refined ton in Q2, the ITA estimated.

Are you on the hook for communicating the company’s steel performance to the executive team? See what should be in that report!

oil price chart

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The oil majors are not having a great pandemic.

Consumers reacted to earlier lockdowns and continued pandemic restrictions, leading to a massive drop in demand. On the other hand, prices initially collapsed after Saudi Arabia led an assault on the U.S. shale market and engaged in a spat with Russia over prices.

Set that against an acceleration in the longer-term trend away from fossil fuels in favor of renewables. Oil companies are facing a perfect storm of low prices, low demand and long-term questions about the viability of their product. Those realities will inevitably push up the cost of capital.

As readers of the MetalMiner Annual Outlook report know, oil prices constitute one of three macroeconomic price drivers embedded in our metals price analysis.

Oil majors struggle

Two of the largest oil majors, Chevron and Exxon, have between them lost $9.4 billion in the second quarter alone.

“The demand destruction in the second quarter was unprecedented in the history of modern oil markets. To put it in context, absolute demand fell to levels we haven’t seen in nearly 20 years,” the Financial Times quoted Neil Chapman, Exxon senior vice-president, as telling analysts. “We’ve never seen a decline with this magnitude or pace before, even relative to the historic periods of demand volatility following the global financial crisis and as far back as the 1970s oil and energy crisis.”

Oil companies’ share prices reflect their fall from grace. They were once the largest sector in the S&P 500. However, now they make up just 3%. Furthermore, Exxon fell from the Dow Jones Industrial Average after almost a century.

As if this were not bad enough the oil and gas industry, indeed the whole fossil fuel industry is facing long-term decline. Economies, at varied paces, are moving toward a lower-carbon future.

Greener future

A significant feature of stimulus measures around the world is a heavy bias toward so-called green energy and/or carbon emission reduction.

Goldman Sachs estimates investment in decarbonizing the energy industry alone — renewables, carbon capture, hydrogen, and the upgrading of power infrastructure — will reach $16 trillion over the next 10 years.

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alumina refinery line

Norsk Hydro’s Alunorte alumina refinery. Source: Norsk Hydro

This morning in metals news: global alumina production rose 2.7% year over year in August; China’s industrial profits fell through the first eight months of the year; and nickel prices have taken a dive over the last month.

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Global alumina production rises in August

Global alumina production in August reached 11,366 metric tons, the International Aluminum Institute reported.

Production of the aluminum raw material was about flat with the previous month. However, August production rose 2.7% year over year, up from 11,079 metric tons in August 2019.

Meanwhile, China’s alumina production totaled 5,910 metric tons in August.

Chinese industrial profits down 4.4%

Although China has bounced back economically in many respects, its industrial profits fell 4.4% during the first eight months of the year, the National Bureau of Statistics of China reported.

As for metals sectors, profit from the ferrous metal smelting and processing industry decreased by 23.1%. Nonferrous metal smelting and processing industry profits fell 5.6%. Non-metallic mineral products industry profits decreased by 3.8%.

Nickel price falls

After rising consistently since late March, the nickel price took a step back in September.

The LME three-month nickel price closed Monday at $14,405 per metric ton, or down 5.52% compared with a month ago.

The price surged as high as $15,671 per metric ton as of Sept. 2, the high for 2020. As for the 2020 low, the LME three-month zinc price dipped as low as $11,142 per metric ton March 23.

Are you prepared for your annual aluminum contract negotiations? Be sure to check out our five best practices. 

Brazil flag

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This morning in metals news: Brazil’s iron ore exports are on the rise; Outokumpu last week announced the initiation of a turnaround plans for its long products business area; and, finally, the world’s first marine superchargers will use recycled aluminum from Norsk Hydro.

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Brazil’s iron ore exports jump

According to mining.com, Brazil’s iron ore exports in September rose 18.5% on a year-over-year basis.

Citing the Ministry of Industry, Foreign Trade and Services, the report notes the September total marked Brazil’s highest export total since 2015.

Outokumpu aims to revitalize long products business

Finland-based Outokumpu last week said it launched a turnaround plan for its long products business area.

“The turnaround program will be started immediately with personnel measures that might lead to a reduction of approximately 100 positions,” the stainless steel producer said in a release. “Other turnaround actions include the implementation of Outokumpu’s manufacturing excellence methodology at the Long Products’ sites to increase operational efficiency.”

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mergers and acquisitions

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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, including: Cleveland-Cliffs’ acquisition of ArcelorMittal USA; a breakdown of the British automotive manufacturing sector’s struggles; the PSAFiat Chrysler merger; primary aluminum production; the U.S. steel capacity utilization rate; and Hurricane Laura’s impact on Gulf of Mexico crude oil production.

Sign up today for Gunpowder, MetalMiner’s free, biweekly e-newsletter featuring news, analysis and more.

Week of Sept. 28-Oct. 2 (Cleveland-Cliffs’ acquisition, primary aluminum production and more)

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

crude oil

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This morning in metals news: Hurricane Laura had the largest effect on Gulf of Mexico crude oil production of any hurricane since 2008, according to the Energy Information Administration (EIA); U.S. imports of standard pipe and tin plate from Thailand and China, respectively, surged from May-July; and tech companies could call the site of the former Etna steel mill their new home.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

Hurricane Laura leads to 14.4M-barrel reduction in Gulf of Mexico oil output

Hurricane Laura had the largest impact on Gulf of Mexico oil production of any storm since 2008, the Energy Information Administration (EIA) reported.

The EIA reported, citing estimates from the U.S. Bureau of Safety and Environmental Enforcement (BSEE), the hurricane reduced crude oil production by 14.4 million barrels over a period of 15 days.

At its peak, Hurricane Laura forced the evacuation of all 16 dynamically positioned drilling rigs, the EIA reported. Meanwhile, the hurricane forced evacuation of 11 of the 12 nondynamically positioned drilling rigs and nearly half of the 643 offshore production platforms operating in the Federal Offshore Gulf of Mexico.

The hurricane battered Louisiana in late August. The Associated Press reported Sept. 24 that New Orleans-based utility Energy Corp. said damage stemming from the hurricane had reached a cost of $1.4 billion.

U.S. standard pipe, tin plate imports surge

U.S. imports of standard pipe from Thailand and tin plate from China surged over the summer, according to Steel Import Monitoring and Analysis (SIMA) system trends data.

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mining

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This morning in metals news: President Donald Trump signed an executive order declaring a national emergency for the mining industry; Vale this week announced the suspension of one of its iron ore operations; and the site of an old steel plant in Chicago is getting a new look.

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Trump signs executive order to boost mining

President Trump announced the signing of an executive order that declares a mining industry national emergency.

“Today, President Trump is signing an Executive Order and declaring a National Emergency to expand the domestic mining industry, support mining jobs, alleviate unnecessary permitting delays, and reduce our Nation’s dependence on China for critical minerals,” the executive order reads.

The order sets the stage for the Department of the Interior to use the Defense Production Act to fund mineral processing.

Furthermore, the action will cut down on “unnecessary delays in permitting actions,” the order says.

In 2017, Trump signed an order laying out a federal strategy to ensure the U.S.’s supply of critical minerals.

The U.S. has long sought to curb its dependence on China for a wide variety of critical minerals. China, for example, dominates the global rare earths mining and processing sectors. More than 80% of global rare earths output comes from China.

Vale suspends Viga operations

In addition to Trump’s executive order, Earlier this week, Brazilian miner Vale announced the suspension of operations at its Viga concentration plant.

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