Articles in Category: Commodities
U.S. and Canada

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This past week’s metals news covered everything from silver price movements to the copper price rise’s slowdown to the reimposition of tariffs on some Canadian aluminum.

We also broke down President Donald Trump’s recent proclamation with respect to reimposing the Section 232 tariff on some Canadian aluminum. MetalMiner’s Stuart Burns delved into the concern expressed by Ontario Premier Doug Ford: could Trump target Canadian steel next?

As our readers know well by now, Trump imposed Section 232 tariffs on imported steel and aluminum of 25% and 10%, respectively, in 2018. During the course of negotiations with Canada and Mexico over the United States-Mexico-Canada Agreement (USMCA) — the successor to NAFTA — the U.S. rescinded the tariffs in May 2019.

Now, at least for unalloyed aluminum from Canada, the tariff is back.

The Aluminum Association called the tariffs the “wrong approach.”

Furthermore, the tariff comes in a time when beverage makers are struggling with an aluminum can shortage.

For the buyers out there, if you are under pressure to generate cost savings in aluminum, steel or anything else, make sure you are following these five best practices.

But the tariff storyline is but one thread in the world of metals.

Before we head into the weekend, let’s take a look back at the week that was:

MetalMiner Week in Review, Aug. 10-14

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Seaborne iron ore prices have remained stubbornly high.

Chinese demand and a stronger-than-expected Chinese recovery from the first-quarter lockdowns are driving prices.

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Recovering demand

Demand collapsed in Q1 during the lockdown but has recovered rapidly in Q2, originally for flat-rolled products as manufacturing for household goods and air conditioning as the high summer temperature approached. Automotive, however, remains somewhat depressed. Long product production has seen a later surge as the market stocks up ahead of an anticipated fall infrastructure demand for construction.

China has not imported significant volumes of scrap since a change in regulations in 2017. Levels have been controlled by import quotas. As such, demand has in part been met by importing semis, like rods, from Malaysia and billets from Russia.

But a relaxation of scrap import quotas is expected to drive a surge in scrap imports. The change could boost domestic electric arc furnace (EAF) and induction furnace (IF) producers.

Southeast Asian scrap users wary

Scrap consumers in the rest of Southeast Asia are watching developments with some degree of trepidation.

Those consumers are expecting Chinese scrap demand could drive up the region’s prices and reduce availability. Worst case, this could encourage resource nationalism. Countries could impose a ban or limits on scrap exports to protect domestic availability or cap price rises.

Ultimately, if scrap prices do rise, rebar and billet prices will likely rise. Excess Chinese production would struggle to find a home regionally, with many countries like Vietnam not allowing rebar imports.

Regional production outside of China is not especially robust.

Japan’s Nippon Steel closed six blast furnaces at the start of the pandemic. However, the company is suffering from poor demand (even during H2 2019). While JFE expects to bring its one closed blast furnace back on stream later this year, Nippon has no plans to do the same before 2021 — underlining the continued depressed nature of the market.

Well-managed supply from Australia and anxiety over availability from pandemic-hit Brazil will likely continue to support iron ore prices. As if to support supply constraints — or, maybe, in retaliation for political discourse with Australia — China imported iron ore from a wider range of sources in Q2 and Q3. The most notable import sources were Canada, Ukraine and India, Reuters reported this week.

Increased scrap imports could soften iron ore demand.

But, in reality, the level of substitution is going to be modest.

Analysts are expecting iron ore prices to remain elevated, coming in at least above $100 per ton for the rest of this year.

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This morning in metals news: Ontario Premier Doug Ford said the U.S. may follow up its reinstatement of aluminum tariffs with tariffs on Canadian steel; utility-scale battery storage continues to become more prevalent; and China imported a record amount of iron ore in July.

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Ontario premier readies for potential steel tariffs

Late last week, President Donald Trump signed a proclamation reinstating tariffs on some Canadian aluminum. The U.S. rescinded its Section 232 steel and aluminum tariffs for Canada and Mexico in May 2019.

Ontario Premier Doug Ford speculated steel tariffs might follow.

Utility-scale battery storage on the rise

According to the Energy Information Administration, installation of utility-scale battery storage continues to rise in the U.S.

“In 2010, the United States had seven operational battery storage systems, which accounted for 59 megawatts (MW) of power capacity (the maximum amount of power output a battery can provide in any instant) and 21 megawatthours (MWh) of energy capacity (the total amount of energy that can be stored or discharged by a battery),” the EIA reported.

China iron ore imports soar in July

China’s iron ore imports surged to a record high in July, Reuters reported.

According to General Administration of Customs Data cited by Reuters, iron ore imports totaled 112.65 million tonnes in July. The July monthly import total marked a 10.8% increase from the previous month, according to Reuters.

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It was another busy week in the world of metals and metal-using sectors.

Among this week’s major developments were an executive shakeup at Ford, aluminum prices on the rise in China and a U.S. steel sector seeing capacity utilization gains week by week.

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This morning in metals news: the European Commission on Wednesday extend anti-dumping duties on stainless steel from China; miner Glencore released its half-year report; and Brazil is trying to meet China’s surging iron ore demand.

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copper smelter

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This morning in metals news: the copper price inched upward Wednesday; U.S. coal-fired plants have been transitioning to natural gas; and Norilsk Nickel recently released its production results for the first half of the year.

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iron ore

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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.

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Aluminum production

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This morning in metals news: Rusal released its Q2 2020 production results; Norsk Hydro has signed a memorandum of understanding for potential use of natural gas at its Alunorte refinery in Brazil; and Rio Tinto announced the discovery of a new zone of gold mineralization.

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A recent Reuters article looked at the seaborne iron ore market and suggests robust demand from China is offsetting weak demand from the rest of Asia and Europe, leaving a largely balanced global seaborne market.

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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 on MetalMiner:

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