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, Colombia could look to make itself a factor in the copper market, Aus Tin announced that it had begun the first phase of its Taronga tin project and Rio Tinto announced its Q2 2019 production results.

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Colombia and Copper

The head of Colombia’s national mining agency said the country is looking to become a bigger producer of copper in the near future, Reuters reported.

Silvana Habib, president of the Colombia Mining Agency, said she wants to see Colombia in the “ranking of copper-producing countries in the short and medium term,” according to the report.

Aus Tin Kicks Off Taronga

Aus Tin recently commenced the first stage of its Taronga project in New South Wales, Australia, according to the International Tin Association.

According to the ITA, production expectations over the nine-year life of the mine come in at 2,800 tons of tin per year.

Rio Unveils Q2 Production Results

Rio Tinto posted Pilbara iron ore shipments of 85.4 million tons in Q2, up 24% from Q1 but down 3% on a year-over-year basis.

Meanwhile, iron ore production reached 79.7 million tons, up 5% from the previous quarter but down 7% on a year-over-year basis.

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

“We saw a challenging operational performance across our portfolio in the first half, while also investing in future growth at Richards Bay Minerals and Resolution,” Rio Tinto CEO J-S Jacques said in a release. “Whilst we experienced operational and weather issues at our iron ore operations in Australia, pricing and market demand has remained robust.”

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This morning in metals news, BHP forecasts increases in copper and iron ore production, Alcoa released its second quarter financial results and ArcelorMittal USA is asking its suppliers to cut costs.

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Copper and Iron Ore

Miner BHP Billiton forecast an increase in copper and iron ore production for the coming fiscal year, according to Kitco News.

BHP forecasts an increase in copper production between 1% and 8% and an increase of between 2% and 6% for iron ore.

Alcoa Releases Q2 Results

Pittsburgh-based aluminum firm Alcoa announced Q2 revenue of $2.71 billion, about flat with Q1, but down from the $3.6 billion in Q2 2018.

Alcoa posted adjusted EBITDA of $455 million in Q2, down from $467 million in Q1 and from the $783 million in Q2.

ArcelorMittal USA Asks Suppliers to Cut Costs

According to S&P Global Platts, ArcelorMittal wants its suppliers to cut costs in a steel market that has lost some steam over the past year.

MetalMiner Executive Editor Lisa Reisman argues the move sends the wrong message and could be harmful for ArcelorMittal’s otherwise strong brand.

“Research has shown that establishing strong win-win supply arrangements always yields better outcomes relative to product innovation, quality, reliability, etc.,” Reisman said. “It’s an absolute mistake to wield a hammer as a punishment for margin erosion due to falling prices.”

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

Reisman said the company should have hedged some of its sales with exchange-traded products (like the CME HRC contract). In addition, with prices likely having hit their bottom and a cyclical uptick being very possible, the request for lower prices could be unsuitable to near-term market conditions.

What happens from here remains to be seen, but Reisman argued this move could have repercussions, including suppliers questioning the move and potentially reconsidering their allocations to ArcelorMittal in future tight markets.

It is just as well Rio Tinto is riding high on a strong iron ore price, as its copper business in Mongolia has hit a cost blowout, according to the Financial Times.

Difficult ground conditions are being cited as the primary reason Rio is having to completely rethink the design and development of its underground mine at Oyu Tolgoi.

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As a result, the first sustainable production is now expected between May 2022 and June 2023, according to the Financial Times — a delay of 16-30 months compared with original guidance — while the cost of the $5.3 billion project will increase by between $1.2 billion and $1.9 billion.

Rio has been producing copper, gold and silver from an open-pit mine at Oyu Tolgoi since 2013, but it has always planned to exploit the mine’s vast underground resources.

The underground expansion is expected to lift output to 550,000 tons per year making OT, as it is known, the third-largest copper mine in the world. At the underground mine, Rio plans to use the cost-effective block-caving technique, a widely used method of mining large – vertically and horizontally — hard rock ore bodies underground.

The procedure involves undermining an orebody, allowing it to progressively collapse under its own weight, as this site explains.  As a large section of rock is undercut, an artificial cavern below the ore body is created that fills with its own rubble as the ore body collapses. This broken ore falls into a pre-constructed series of funnels and access tunnels underneath the broken ore mass. The collapse progresses upward through the ore body, eventually causing large areas of the surface to subside into sinkholes.

The problem at OT is the ore body is too fragile and collapses too easily, making the current design inherently unstable.

Rio, via its majority-controlled subsidiary Turquoise Hill Resources, says it first hit problems last year as it tried to complete a 1.3 kilometer production and ventilation shaft amid changing ground conditions. The firm is now having to look at the relocation of underground infrastructure, resulting in considerable delay and added cost.

Despite these challenges, there is no question that the mine will be viable; copper demand is set to rise on the back of electrification and electric cars, while copper ore grades are depleting around the world.

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

The long-term prospects for higher prices are positive — which is just as well, as OT may well have more surprises in store for Rio before it reaches full production.

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This morning in metals news, President Donald Trump is expected to sign an executive order calling for heightened steel content thresholds for federal projects, Japanese firm Nippon Steel is planning to offload $1.9 billion in assets in order to purchase India’s Essar Steel and Chinese iron ore prices are getting a boost from a positive demand outlook.

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Trump to Sign Executive Order

President Donald Trump will sign an executive order Monday calling for higher steel content thresholds for federal projects, according to White House trade adviser Peter Navarro in an opinion piece published by Fox News.

According to Navarro, the order will call for the raising of the domestic steel content threshold for federal projects from 50% to 95%.

The president also signed a proclamation hailing this week “Made in America Week.”

Nippon Steel to Buy Essar Steel

Japan’s Nippon Steel plans to offload $1.9 billion in assets toward its purchase of India’s Essar Steel, according to the Nikkei Asian Review.

According to the report, Nippon’s plans to sell approximately 200 billion yen in assets comes in at about twice the amount initially expected to be offloaded to finance the deal.

Chinese Iron Ore Price Gains

Expectations of rising demand boosted Chinese iron ore and coke prices Monday, Reuters reported.

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

According to Reuters, the most-traded September iron ore contract on the Dalian Commodity Exchange surged 2.3% on Monday to 895 yuan ($130.22) per ton.

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This morning in metals news, China’s copper import levels fell in June, the U.S.-China trade war saw China’s imports of U.S. goods plunge in June and BHP has long-term designs on mine expansion over the next century.

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China Copper Imports Fall

Imports of copper in China fell 27% on a year-over-year basis, Reuters reported.

In addition, unwrought imports in 1H 2019 fell 12.5% compared with the same period in 2018.

Trade War Slows U.S.-China Trade

Unsurprisingly, ongoing trade tensions between the U.S. and China have seen trade between the two countries slow considerably.

Citing Chinese customs data, the Associated Press reported China’s imports of U.S. goods fell 31.4% in June on a year-over-year basis. Meanwhile, Chinese exports to the U.S. in June fell 7.8%.

Miner BHP Could Expand Significantly

According to Bloomberg, miner BHP Billiton says it could build as many as 11 more iron ore mines in Australia’s Pilbara region over the next 50-100 years.

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

Iron ore prices have surged this year to five-year highs amid supply disruptions in Brazil and Australia.

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This morning in metals news, Federal Reserve Chairman Jerome Powell hinted interest rate cuts could be coming later this month during testimony before the House of Representatives, Southern Copper Corp received authorization from the Peruvian government to build a $1.4 billion mine and U.S. steel shipments in May fell 0.8% from the previous month.

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Fed Chairman Testifies Before House

In much-anticipated testimony by Federal Reserve Chairman Jerome Powell, Powell cited trade tensions and the global economic outlook as factors weighing on the U.S. economy, CNN reported.

According to the report, he also hinted at possible interest rate cuts this month. Powell has come in for criticism from President Donald Trump for raising interest rates back in December, arguing the increase has prevented further economic growth.

Powell is scheduled to testify again Thursday before the Senate.

Southern Copper Gets OK on Long-Delayed Mine

Southern Copper received authorization from the Peruvian government to move forward with a planned $1.4 billion mine, Bloomberg reported.

According to the report, construction of the mine has been delayed since 2010.

May Steel Shipments Down

U.S. steel shipments fell 0.8% in May compared with the previous month, according to the American Iron and Steel Institute (AISI).

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May shipments totaled 8.14 million net tons, down 0.8% from the 8.21 million net tons shipped in April but up 1.1% from the 8.06 million net tons shipped in May 2018.

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This morning in metals news, India is likely to remain a net steel importer for at least the next two years, residents of Scunthorpe are concerned about the future of their town should British Steel close down and the copper price retreated to a one-week low.

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India to Remain Net Steel Importer

As steel imports continue to flow into the country, India is likely to remain a net steel importer over the next two years, Bloomberg reported citing Fitch Ratings Ltd.’s local unit.

India’s annual steel consumption is nearing 100 million tons, according to the report.

Worrying About the Future

A recent bid deadline came and went for the liquidated British Steel, based in Scunthorpe, England.

Media reports indicate there have been at least nine interested buyers, but it remains unclear if a buyer would be willing to take on the entirety of the business, as opposed to individual parts.

With the plant’s future in limbo, the BBC reported residents of Scunthorpe are concerned about a potential shuttering of the plant and the impact it would have on the town.

“If the worst comes to worst, and the steelworks does actually shut, it will be devastating for so many people here,” one resident is quoted as saying.

“People will probably have to move away.”

Copper Slides

On the heels of the weekend’s G20 Summit in Japan, the copper price fell to a one-week low Tuesday, Reuters reported.

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Copper prices soared to a six-week high on Monday. The LME copper price traded down 0.5% Tuesday, according to the report, down to $5,925 per ton, on weak global manufacturing data.

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This morning in metals news, world leaders gathered in Japan this weekend for the G20 Summit, a deadline for bidding on the liquidated British Steel came and went June 30, and Australia’s iron ore exports are forecast to fall for the first time in 18 years.

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G20 Leaders Meet in Japan

Trade issues once again loomed over the proceedings at the latest G20 Summit, this time held in Japan over the weekend.

For the second straight summit, references to protectionism did not not appear in the summit’s communique, Reuters reported.

“We strive to realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open. International trade and investment are important engines of growth, productivity, innovation, job creation and development,” the communique said.

The communique also offered support for the World Trade Organization (WTO), while also noting changes must be made to improve its dispute settlement system.

“Furthermore, we recognize the complementary roles of bilateral and regional free trade agreements that are WTO-consistent,” the statement said. “We will work to ensure a level playing field to foster an enabling business environment.”

British Steel Deadline Passes

Following the liquidation of the U.K.’s No. 2 steelmaker British Steel in May, a June 30 deadline was set for bidding on the embattled firm.

According to Yahoo Finance U.K., up to nine potential buyers have reported interest, but the challenge comes in finding a buyer willing to take up the entire firm, as opposed to just parts.

According to the Yahoo Finance U.K. report, Network Rail has made an offer for the “railway-critical parts of British Steel.

Australian Iron Ore Exports Down

This year could see Australia’s first drop in iron ore exports in nearly two decades, Bloomberg reported.

Australia’s Department of Industry, Innovation and Science cut its 2019 forecast for iron ore exports from 867 million tons to 814 million tons.

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

Rio Tinto also recently downgraded its 2019 iron ore guidance.

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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:

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!