Articles in Category: Company News

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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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This morning in metals news, aluminum producer Alcoa Corporation reported its fourth-quarter and full-year 2018 results, India is considering a higher iron ore import duty and Shanghai steel futures moved up.

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Alcoa Reports 4Q Earnings

Pittsburgh-based aluminum producer Alcoa Corporation reported its fourth-quarter and full-year 2018 earnings this week, reporting adjusted net income of $125 million, excluding special items, for the final quarter of 2018.

The 4Q net income total was up from $119 million in the third quarter but down from $195 million in 4Q 2017.

For 2018 as a whole, the company reported adjusted net income excluding special items of $675 million, up from $563 million in 2017.

“Despite sequentially weaker commodity prices, we had a strong fourth quarter with higher profits in our Bauxite and Alumina segments,” President and CEO Roy Harvey said. “With the help of higher market prices earlier in the year, we increased annual profits, addressed liabilities, significantly strengthened our balance sheet, and began returning cash to stockholders. With markets likely to remain dynamic in 2019, we will focus on what we can control to continue improving our operations, addressing challenges with agility, and making the most of opportunities in the year ahead.”

In 2019, Alcoa projects a global aluminum deficit between 1.7 million and 2.1 million metric tons. In addition, Alcoa reported the global alumina market came in at a deficit of 0.6 million metric tons.

“In 2019, the Company expects the alumina market to move to a surplus that is projected to range between 0.2 million and 1 million metric tons, which assumes ongoing, third-party supply disruptions in the Atlantic region,” Alcoa states. “The projected alumina surplus is driven by China, where refining expansions are expected to outpace demand growth from smelting.”

India Considers Hiking Iron Ore Duty

According to a report from Creamer Media’s Mining Weekly, the Indian government is considering an increase to its iron ore import duty.

Per the report, domestic industry has lobbied the government to increase the current 2.5% duty on imported iron ore.

Shanghai Steel Picks Up

Global steel prices have lagged of late, but Thursday was a positive session for Shanghai steel futures, Reuters reported.

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Per the report, the most-traded rebar contract on the SHFE ticked up 0.8%, while hot rolled coil was also up 0.8%.

It’s a new world across all industries, as companies grapple with changing consumer tastes, ever-shifting market conditions and new technological developments.

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Of course, the automotive industry is no different, as automakers strive to adapt to the electric vehicle (EV) wave while simultaneously keeping an ear to the ground when it comes to what their customers want.

For Ford Motor Co., adapting meant ditching its lineup of sedans in the North American market, instead focusing on its popular SUVs and pickup trucks.

Other types of adaptation to a changing business world include simply partnering up with an industry colleague and pooling resources, if you will.

In that vein, this week Ford announced a partnership with Volkswagen, which it called “the first formal agreements in a broad alliance that positions the companies to boost competitiveness and better serve customers in an era of rapid change in the industry.”

According to the company announcement, the automakers plan to collaborate on production of commercial vans and medium-sized pickups for the global market as early as 2022. The alliance between the two companies will be led by a joint committee, which will include Ford CEO Jim Hackett, Volkswagen CEO Dr. Herbert Diess and other senior executives from the two companies.

“Over time, this alliance will help both companies create value and meet the needs of our customers and society,” Hackett said. “It will not only drive significant efficiencies and help both companies improve their fitness, but also gives us the opportunity to collaborate on shaping the next era of mobility.”

In addition to collaboration on vans and trucks, the automakers could work together on electric vehicles.

“In addition, Volkswagen and Ford have signed a memorandum of understanding to investigate collaboration on autonomous vehicles, mobility services and electric vehicles and have started to explore opportunities,” a Ford release stated. “Both companies also said they were open to considering additional vehicle programs in the future. The teams will continue working through details in the coming months.”

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Ford is scheduled to announce its fourth-quarter 2018 and full-year results during a conference call at 4:15 p.m. ET on Wednesday, Jan. 23.

In other news, Volkswagen this week announced it would build its North American electric vehicle manufacturing base in Chattanooga, Tennessee.

“Strengthening the company’s commitment to an electric mobility future, this expansion of Volkswagen’s U.S. footprint will include an investment of $800 million into the Chattanooga facility and create 1,000 jobs at the plant, plus additional jobs at suppliers,” a Volkswagen release stated. “EV production at the site will begin in 2022.”

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This morning in metals news, exports from China to the U.S. took a dive in December, India will drive global steel demand in the coming years and Serbia has requested an exemption from the E.U.’s imminent quotas on steel imports.

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December Exports to the U.S. from China Drop

While the U.S. and China have kickstarted the new year with trade talks that have some feeling optimistic of a resolution, U.S. tariffs on $250 billion worth of Chinese imports appear to have had an effect on trade flows last month.

According to a report by the Associated Press, China’s exports to the U.S. fell in December, down 3.5% compared with December 2017.

For the year as a whole, however, China’s exports to the U.S. in 2018 were up 11.3%, according to the report.

Indian Steel Demand

India last year overtook Japan as the No. 2 steel producer in the world, according to data from the World Steel Association last month.

And per a recent post by Adam Szewczyk, head of data management for the World Steel Association, Indian steel demand will likely continue to drive production growth.

“According to worldsteel’s October Short Range Outlook, it is likely that India will also become #2 in steel use by the end of 2019 as its steel demand is expected to grow by 7.3%,” Szewczyk wrote.

“The Indian steel industry, after recovering from the twin shocks of demonetisation and the Goods and Services Tax (GST) reform, is one of the few bright spots for the world’s steel industry in what is forecasted to be a lower growth era.”

Serbia Requests Exemption From E.U. Steel Quota

With E.U. member states set to vote on new steel quotas Wednesday — in response to the U.S.’s implementation of a 25% steel tariff last year, pursuant to Section 232 of the Trade Expansion Act of 1962 — one country has already asked for an exemption.

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According to a Reuters report, Serbia, home to the Chinese-owned Zelezara Smederevo mill, has asked for an exemption from the quotas, which is expected to be approved by E.U. member states and will cover 26 product categories.

If approved, the safeguard measures would replace provisional measures passed in July 2018.

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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 stories here on MetalMiner:

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Want to a see Cold Rolled price forecast? Get two monthly reports for free!

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This morning in metals news, U.S. steel shipments in November surged on a year-over-year basis, the next chief of Nippon Steel and Sumitomo Metals Corp. hopes to make the company the world’s No. 1 producer and U.S.-China trade talks could formally continue later this month.

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Steel Shipments Jump in November

According to a report by the American Iron and Steel Institute (AISI) this week, November shipments of steel from U.S. steel mills were up 5.6% from November 2017, hitting 7.8 million tons.

November shipments were down from October totals, however, by 4.2%.

Top Spot

Japanese firm Nippon Steel and Sumitomo Metal Corp., which will undergo a name change this year (to Nippon Steel Corp.), has a new chief.

The company announced Thursday that Executive Vice President Eiji Hashimoto will become the firm’s new president as of April 1 (when the firm’s name change will go into effect), The Japan Times reported.

According to the report, Hashimoto indicated a desire to make Nippon the world’s No. 1 steel producer.

Trade Talks to Continue?

Trade delegations from the U.S. and China met over three days this week, building on talks between U.S. President Donald Trump and Chinese President Xi Jinping during the G20 summit late last year.

According to a Reuters report, however, trade representatives from the two countries might not be done talking this month.

Per the report, U.S. Treasury Secretary Steven Mnuchin said a top Chinese trade official will “most likely” come to Washington, D.C. later this month for additional talks, as the two countries look for a deal to settle the trade tensions that escalated last year. The two countries traded a total of $360 billion in tariffs last year.

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However, time is quickly running out on the 90-day negotiating window set by Trump and Xi at G20, at the end of which the U.S. will move forward with a previously planned tariff rate increase.

If a deal is not reached by March 1, the U.S. plans to increase the tariff rate on the $200 billion in tariffs imposed in September. The tariff rate on the affected products had previously been set to make the jump from 10% to 25% as of Jan. 1, but the U.S. delayed the increase following the G20 talks.

In addition, China agreed to temporarily slash its tariff on imported U.S.-made automobiles, bringing it back down from 40% to 15%.

This morning in metals, we’re tracking the following stories.

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  • Global aluminum value chain under fire from China. The OECD has released a report titled “Measuring distortions in international markets: the aluminum value chain,” in which the organization places particular emphasis on unfairly subsidized aluminum in China, according to a release by the Aluminum Association. “Looking across the whole value chain … shows subsidies upstream to confer significant support to downstream activities, such as the production of semi-fabricated products of aluminum,” the report’s opening reads. “Total government support for [17 aluminum firms] reached up to USD $70 billion over the 2013-17 period, depending on how financial support (i.e. concessional loans) is estimated,” the report continued. “Although all 17 firms received some form of support, it is highly concentrated: the top 5 recipients receive 85% of all support, most of it at the smelting stage of the value chain.”
  • Nucor Corp. breaking ground in the Midwest. Reuters reports that Nucor is planning to build a plate mill for $1.35 billion in Sedalia, Missouri, to be fully operational in 2022. The new mill would produce 1.2 million tons a year of plate products and create about 400 full-time jobs, according to the company’s release. “Tax reform, continued improvements to our regulatory approach and strong trade enforcement are giving businesses like ours the confidence to make long-term capital investments here in the United States,” Reuters quoted Chief Executive Officer John Ferriola as saying in a statement.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

  • Small business owners’ confidence in economy, outlook on business conditions weakens yet again. The Wall Street Journal reports (paywall) that the National Federation of Independent Business’ optimism index has fallen for the fourth straight month. “Over the past few months, owners’ expectations for the future have tempered, while reporting continued solid economic activity,” the NFIB said in its report, based on responses from 621 small-business owners, according to the WSJ. “The Index remains at historically high levels but can’t be expected to improve every month.” As the WSJ article noted, “the survey results mirror those from the Conference Board, whose December survey suggested growing economic-growth concerns.”

MetalMiner has just released its January 2019 edition of the Monthly Metal Buying Outlook, in which we explore how the fall in commodities — namely crude oil prices — and the continued weakness of the greenback are driving industrial metals prices.

What Happened Over the Last Month?

According to the report,

  • Both commodities and base metals sectors have been in downtrends over the past month.
  • Crude oil prices fell below the $50/barrel level, signaling a bearish outlook for crude oil. OPEC has tried to shore up oil prices by establishing output cuts and quotas for its members and allies, including Russia.
  • The Institute for Supply Management (ISM) PMI reading for December rose, while the Caixin China Manufacturing PMI fell for the month.

What Does it Mean for Metals in the Near-Term Future?

In the detailed sections of the report, get the drill-down analysis behind trends for base metals and several forms of steel:

  • Read about why aluminum buyers should watch the U.S. Midwest premium.
  • Find out how decreasing stocks on the SHFE may be a key driver of tin prices.
  • Learn the buying strategies that come out of the analyzing the trends — from aluminum all the way down to HRC, CRC, HDG and plate steel.

Read the January report today — Request your two-month free trial (and see a sample report here!) 

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Miner Rio Tinto has deployed what it hails as the “first automated heavy-haul, long distance rail network.”

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The rail network is guided by what is billed as the world’s largest robot, called AutoHaul.

“The safe and successful deployment of AutoHaul™ across our network is a strong reflection of the pioneering spirit inside Rio Tinto,” said Ivan Vella, Rio Tinto Iron Ore managing director for Rail, Port & Core Services. “It’s been a challenging journey to automate a rail network of this size and scale in a remote location like the Pilbara, but early results indicate significant potential to improve productivity, providing increased system flexibility and reducing bottlenecks.”

According to a Rio Tinto release, the autonomous rail network has completed over 1 million kilometers of autonomous travel since its first run in July.

The $940 million AutoHaul program is used to automate transport of iron ore to the company’s port facilities in the Pilbara region of western Australia.

“Rio Tinto operates about 200 locomotives on more than 1,700 kilometres of track in the Pilbara, transporting ore from 16 mines to four port terminals,” the release states.

Automation will continue to be a game-changing factor across industries, metals-centric or otherwise.

Earlier this year, following the first run of the AutoHaul network — during which 28,000 tons of ore traveled over 280 kilometers — Vella laid out what the new program brought to the table and alluded to the changes that would occur for workers.

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“This programme symbolises both the pioneering spirit and innovative talents of many people across Rio Tinto and shows our absolute commitment to improving safety and productivity, as well as enabling greater flexibility across our operations. … We are working closely with drivers during this transition period as we prepare our employees for new ways of working as a result of automation.”

Before we head into the weekend, let’s take a look back at the week that was with some of the stories here on MetalMiner on this final Friday of 2018:

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel