Articles in Category: Commodities

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 rising global crude steel production, automotive sector developments and much more:

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Week of April 26-30 (global steel production, oil prices and more)

• Global copper mine production rose by 4% in January, the International Copper Study Group reported.
• Meanwhile, global crude steel production jumped in March, the World Steel Association reported.
• MetalMiner’s Stuart Burns took a look at the oil price outlook amid rising COVID-19 cases in India and Japan.
• On Thursday, the MetalMiner team hosted a 30-minute webinar on the stainless steel market. (For a schedule of upcoming webinar topics, visit the MetalMiner events page.)
• US steel capacity utilization reached 78.4% last week, the American Iron and Steel Institute reported.
• Could supply chain challenges in the automotive sector actually end up being a boon for other sectors? Burns delved into the subject earlier this week.
• China’s aluminum imports continued to surge in March, MetalMiner contributor Sohrab Darabshaw outlined this week.
• Ford Motor Co. announced its new global battery center dubbed Ford Ion Park.
• Sticking with the automotive sector, J.D. Power and LMC Automotive forecast US new-vehicle sales would have a record April.
• US steel imports picked up from February to March, the Census Bureau reported.
• General Motors’ Ultium Charge 360 initiative aims to make the charging experience easier for GM electric vehicle owners.
• Burns covered the EU’s carbon border tax proposal.
• US real GDP grew at an annual rate of 6.4% in the first quarter. In addition, the rise marked the third consecutive month of GDP gains after the record 33% drop in Q2 2020.

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This morning in metals news: Ford Motor Co. announced its new global battery center called Ford Ion Park; meanwhile, OPEC nations met via teleconference on Tuesday; and, lastly, the US goods trade deficit rose by 4% in March.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Ford aims to accelerate battery R&D with Ford Ion Park

On Tuesday, automaker Ford announced a new global battery center dedicated to battery research and development.

“Ford Ion Park will use state-of-the-art equipment to pilot new manufacturing techniques that will allow Ford to quickly scale breakthrough battery cell designs with novel materials once the company vertically integrates battery cells and batteries,” Ford said in a release.

Ford Ion Park is located in southeast Michigan, where a team has already been working. The facility includes a $185 million collaborate learning lab, which will open late next year, Ford said. Work at the lab will include developing, testing and building vehicle battery cells and cell arrays.

The move is illustrative of increasing competitiveness in the electric vehicle space. Legacy automakers, like Ford, are pouring significant resources into electrification and closing the gap with Tesla. General Motors, for example, has said it plans to offer 30 new electric vehicle models by 2025.

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Cautious production increases by OPEC+ and a strong business cycle upturn have encouraged bullish sentiment about downward pressure on oil inventories and upward pressure on the oil price in the second half of the year, Reuters columnist John Kemp reports in a recent post.

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Oil prices ease as infections rise in major importers Japan, India

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But prices have eased off last week and into this one. Initially, this came as caution rose over the prospect of output increases from shale producers. More recently, however, resurgent coronavirus infections in India and Japan, both major oil importers, have weighed on prices.

Despite growing optimism in the US and, to a lesser extent, in Europe, India’s oil demand remains in doubt.

India has posted several days of record-setting COVID-19 cases, with expectations they are going to get even worse. Bloomberg reports that demand for fuels could plunge by 20% in April.

It seems likely that new lockdowns could be in place for several weeks or even months. In turn, that would seriously impact Indian demand.

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Before the weekend, let’s take a look at the week that was and the metals storylines here on MetalMiner, including an aluminum smelter labor deal, copper prices, environmental policy developments and more:

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Week of April 19-23 (aluminum labor deal, copper prices and more)

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• Stuart Burns on copper price movements and where the red metal might go from here.
• Century Aluminum and the United Steelworkers union reached a new five-year labor deal.
• Tata Steel will introduce a new carbon surcharge on HRC and CRC contracts.
• The zinc narrative is similar to that of copper.
• The US steel sector’s capacity utilization ticked up to 78.0% last week.
• Facebook and Indian firm CleanMax have reached a deal on a wind power project in India.
• Temperance Beer Co. founder Josh Gilbert chatted about what the last year has been like for his brewery, from rising materials costs to changes in consumer preferences.
• General Motors this week debuted another electric vehicle, the Cadillac LYRIC.
• Russia’s NLMK Group benefited from strong demand and high steel prices in Q1, MetalMiner’s Christopher Rivituso explained.
• Burns opined on the latest environmental policy announcements from the UK and US governments.
• Cleveland-Cliffs’ steelmaking revenues skyrocketed in Q1 2021.
• Burns again weighed in on environmental policy efforts and what needs to happen next.
• Lastly, the Clean Sheet Project at the University of Michigan seeks to develop better ways to produce lightweight, recyclable automotive sheet metals.

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This morning in metals news: General Motors debuted its 2023 Cadillac LYRIQ electric vehicle; the House Judiciary Committee advanced a bill that seeks to open OPEC up to lawsuits for price collusion; and Texas is set to add a significant amount of utility-scale solar power.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

GM unveils Cadillac LYRIQ EV

General Motors previously announced plans to offer 30 new electric vehicle models by 2025.

This week, the automaker debuted its 2023 Cadillac LYRIQ electric vehicle.

“At launch, LYRIQ will be available with premier technologies and stirring performance capabilities enabled by the vehicle’s dedicated electric architecture,” GM said.

The vehciel features a 12-module, 100 kilowatt-hour battery pack and a rear-wheel-drive Ultium Platform deliver a Cadillac estimated 340 horsepower and 440 Nm of torque — and a Cadillac-estimated over 300 miles of range with a full charge.”

House panel takes aim at OPEC

The House Judiciary Committee this week passed a bill that seeks to open oil-producing alliance OPEC up to lawsuits for price collusion.

“The Organization of Petroleum Exporting Countries, or OPEC, is an international cartel whose members deliberately collude to limit crude oil production as a means of fixing prices, unfairly driving up the price of crude oil to satisfy the greed of oil producers,” US Rep. Jerrold Nadler (D-NY) said in a release. “Such behavior, if done by private companies, would be illegal per se under U.S. antitrust law.”

As a result, the committee moved to advance the No Oil Producing and Exporting Cartels (NOPEC) Act of 2021. The committee passed it via voice vote Tuesday, Reuters reported.

The bill seeks to empower the Justice Department to pursue antitrust enforcement actions against OPEC members.

Texas to add utility-scale solar power

A significant amount of solar power is going to come online over the next two years in Texas, the Energy Information Administration said.

Texas’ added 2.5 GW of solar capacity last year. That marked the beginning of a “solar boom” in the state, the EIA said.

The EIA forecast the state will add 4.6 GW of solar capacity in 2021. Furthermore, it forecast an additional 5.4 GW in 2022. The additions would bring total installed solar capacity in Texas to 14.9 GW, the EIA reported.

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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 coverage of steel prices, US electricity consumption and much more:

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Week of April 12-16 (steel prices, electricity consumption and more)

• The Energy Information Administration (EIA) forecast US electricity consumption
  

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  will rise by 2.1% this year.

• Carbon dioxide emissions from the industrial sector fell by 8% in 2020, the EIA also reported.
• MetalMiner’s Stuart Burns on the development and adoption of processes behind so-called “green” steel.
• The strike at ATI continued this week, marking the third week of the labor stoppage at nine of the specialty materials firm’s facilities.
• In other green news, Oslo-based Norsk Hydro said it is exploring the possibility of developing and operating its own hydrogen facilities.
• Burns on the European aluminum sector’s objections to the EU’s Carbon Border Adjustment Mechanism.
• MetalMiner contributor Sohrab Darabshaw delved into India’s foray into graphite anode production.
• US steel capacity utilization fell to 77.6% last week, the American Iron and Steel Institute reported.
• The copper price steadied in the second half of March after plunging in late February and early March.
• Rising aluminum delivery premiums are indicative of a tight market.
• Rio Tinto said it had reached a new funding deal for the Oyu Tolgoi copper mine project.
• US steel price gains appear to have started to slow down.
• Alcoa reported first quarter net income of $175 million, citing the benefit of higher alumina and aluminum prices.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

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This morning in metals news: US steel sector capacity utilization fell to 77.6% last week; US import prices rose in March; and the WTI crude price continues to hang steady.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

US steel sector capacity utilization reaches 77.6%

US steel sector capacity utilization dipped to 77.6% for the week ending April 10, the American Iron and Steel Institute reported.

Capacity utilization fell from 77.9% the previous week.

Production during the week ending April 10 totaled 1.76 million net tons, or up 42% year over year. The total fell by 0.3% from the previous week.

US import prices rise

US import prices rose by 1.2% in March, the Bureau of Labor Statistics reported.

The increase follows jumps of 1.3% in February and 1.4% in January.

Import prices from December to March rose by 4.1%, the largest three-month rise in the index since rising 5.8% in May 2011.

Oil price remains steady

As MetalMiner’s Stuart Burns explained earlier this month, oil prices have settled into a relatively narrow band of late.

The WTI crude oil price closed Tuesday at $60.18 per barrel, according to the Energy Information Administration. The price marked an increase of $0.85 from the previous week.

Meanwhile, the price is up $37.77 per barrel from a year ago.

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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:

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Week in Review, April 5-9 (steel capacity utilization, European steel’s challenges and more)

• MetalMiner contributor Christopher Rivituso took a look at a recent McKinsey report on the challenges ahead for the European steel sector.
• US energy consumption fell by 7% in 2020.
• Automakers posted strong Q1 sales results in the US market.
• US construction spending fell in February, as did pending home sales.
• US steel capacity utilization reached 77.9% last week.
• China’s relaxation of its copper scrap import regulations is shifting the copper market.
• Stuart Burns on oil prices on the heels of the latest supply-side news from OPEC.
• China is ahead of the game when it comes to securing raw materials for the next industrial revolution.
• The US Court of International Trade ruled in favor of a plaintiff contesting former President Donald Trump’s proclamation that expanded the Section 232 metals tariffs to steel and aluminum derivatives.
• In the Greenland elections, a left-wing party’s victory could be a roadblock to development of a rare earths mine project.
• Three years after the forced closure of its Tamil Nadu copper smelter, Vedanta aims to start up a new site in India.
• Ford China reported its Q1 sales jumped by 73.3%.
• Burns checked in on the state of rising aluminum physical delivery premiums.
• The gold price trended sideways last month but has shown some life through the first week of April.
• The Aluminum Association called for reform of the Section 232 tariff exclusion process.

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This morning in metals news: Ford China announced its sales rose by 73.3% year over year; meanwhile, the Energy Information Administration (EIA) released its Short-Term Energy Outlook; and, lastly, Rio Tinto announced it had achieved battery-grade lithium at its Boron plant.

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Ford China tallies fourth consecutive quarterly sales jump

Ford China reported its Q1 sales jumped 73.3% year over year.

The jump marked its fourth consecutive year-over-year quarterly sales increase.

Meanwhile, Ford China sales increased 30.3% year over year in Q4 2020.

EIA releases Short-Term Energy Outlook

The EIA forecast US retail gasoline prices this summer will average $2.78 per gallon.

Meanwhile, last summer’s average checked in at $2.07 per gallon.

“EIA expects U.S. gasoline consumption to rise in response to growing levels of GDP and employment,” the EIA said. “In addition, as COVID-19 vaccines are more widely distributed, we expect that driving will increase, causing gasoline consumption to rise.”

Furthermore, the EIA forecast US gasoline consumption will average 8.6 million barrels per day in 2021, up from 8.0 million barrels per day in 2020.

In addition, in its latest outlook, the EIA used projections of 5.6% GDP growth this year and 4.2% growth in 2022.

Rio Tinto achieves battery-grade lithium

Lastly, Rio Tinto announced it had achieved battery-grade lithium at its Boron plant in California.

“The demonstration plant is the next step in scaling up a breakthrough lithium production process developed at Boron, to recover the critical mineral and extract additional value out of waste piles from over 90 years of mining at the operation.

“An initial small-scale trial in 2019 successfully proved the process of roasting and leaching waste rock to recover high grades of lithium.”

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In a surprise move last week, OPEC+ announced a further gradual relaxation of the group’s 2020 emergency 9.7 million barrels per day cut in oil output, causing the oil price to briefly retreat.

In December, OPEC+ had intended to ease the curb by about 500,000 barrels per day each month in 2021.

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However, in the face of still weak demand, it postponed the easements.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Oil price and supply

Meanwhile, in January Saudi Arabia surprised the market and its OPEC+ partners. The kingdom announced a voluntary additional cut of 1 million barrels per day. As a result, its output went to just over 8 million barrels per day b/d from its quota of 9 million barrels per day.

But the Kingdom has now announced it intends to gradually bring that back. It will increase production by 250,000 in May, 350,000 in June and 400,000 in July.

Since last year the 9.7 million b/d of OPEC+ cuts have been reduced to about 7 million barrels per day.

Output, however, remains well below pre-pandemic levels.

The latest announcement stated producers will collectively increase output by 350,000 barrels per day in May. They will add another 350,000 barrels per day in June and around 441,000 barrels per day for July, according to a report in the Financial Times.

Combined, Saudi Arabia and OPEC+’s amount to some 2 million barrels per day in the run-up to the summer.

Subdued demand as third wave of lockdowns hits parts of Europe

Demand is recovering. However, large parts of Europe are in a third wave of lockdowns; demand there remains subdued.

OPEC appears sensitive to not spooking the market and keen to minimize too much damage to the oil price.

The move surprised markets that were expecting no change, but the Brent crude oil price continued to trade around the $63 mark. The price has been at around that level for the last three weeks.

Major oil consumers like India and China will likely welcome the move. Greater output will be seen as one less support mechanism for higher prices this year.

Oilprice.com reports the move by OPEC+ in bullish terms, saying the market sees it as a vote of confidence in rising demand and that constraints on the market remain.

The US shale industry will likely see a further erosion of output this year, according to BloombergNEF last week. Output may shrink by another 485,000 barrels per day by the end of 2021 as producers focus on debt reduction and dividends over growth, according to the report.

For now, OPEC’s feared resurgence of shale oil has not materialized.

But as the battered and bruised fracking industry recovers, don’t count it out.

If the oil price remains at $60 per barrel or above, shale oil is profitable. One thing we do know about the industry is that, sooner or later, profit will justify a return of investment and growth.

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