Articles in Category: Exports

This morning in metals news: nickel prices have consolidated in December; North American Stainless announced a reduction in its fuel surcharge; and, lastly, the Energy Information Administration reported U.S. liquefied natural gas exports reached a record high in the first half of 2021.

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Nickel prices trend sideways to close the year

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The nickel price surged around Thanksgiving, rising to just over $21,000 per metric ton (a 2021 high).

However, the LME three-month nickel price has since cooled.

Nickel closed last week at $20,125 per metric ton, according to MetalMiner Insights data. The price is down 1.5% month over month.

NAS announces fuel surcharge reduction

Speaking of nickel — a majority of which goes into stainless steel production — North American Stainless announced a reduction in its fuel surcharge for stainless flat and long products.

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Two years ago, Indonesia instituted a ban on nickel ore exports.

Now, it is contemplating banning exports of tin and copper ore, too.

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Indonesia export bans prompt tin price surge

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Indonesian President Joko Widodo has been announcing from different forums that his country may stop the export of bauxite next year, copper ore in 2023 and tin in 2024.

On the heels of the announcements, the tin price has surged, MetalMiner Insights data shows. (Subscribers can find additional tin and copper analysis in the next Monthly Metal Outlook report, which will be released Wednesday, Dec. 1.)

The LME three-month tin price closed Monday at $39,450 per metric ton. The price is up 6.6% month over month.

For long, Indonesia has been a major exporter of metal ores, mostly to Asian countries, including China and Japan. The ban on nickel exports had triggered investments, mostly from China, into Indonesian nickel processing.

As part of efforts to improve the country’s external balance & attract investments into the resource processing industry, Indonesia may stop tin exports in 2024, the Indonesian President reiterated last week at the Indonesian central bank’s annual gathering.

The president has made similar statements in recent public appearances about the country’s long-term dependence on raw commodities, reducing its export earnings and employment opportunities.

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When news of Russia’s export tax on primary aluminum came out in the summer, it caused an increase in LME prices. More significantly, however, physical delivery premiums — such as the Midwest premium, the Rotterdam premium and the Main Japanese Port (MJP) premium — also increased.

See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your aluminum buy.

Aluminum premiums surge

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Of the three, the Rotterdam premium arguably had the biggest impact. Some European rolling and extrusion mills beginning to quote the Rotterdam premium – either duty paid or duty unpaid – as a separate component of their pricing structure.

That has long been a feature in the U.S. market, where the Midwest premium has been a sizeable component of the all-in price. However, it had never been a cost broken out for European consumers, with the mills absorbing the Rotterdam premium as part of their conversion premiums.

Russian aluminum export tax

Russia set its export tax at 15% or U.S. $254 per metric ton, whichever is larger, back in August for an initial six-month period. The move ostensibly aimed to dissuade primary metal exports in an effort to support domestic consumers facing rapidly rising costs in a domestic manufacturing sector that was running hot as it bounced back from pandemic restrictions.

The expectation was the tax would likely remain in place well into 2022, as it would provide a welcome revenue stream for the Russian treasury. However, maybe bolstered by bumper oil revenues or faced with strong lobbying by Rusal, a recent Reuters report suggests the probability is the tax will be allowed to end in December. As a result, metal supplies to Europe could increase.

Aluminum has already fallen from a high of $3,300 per metric ton to $2,700 in just over a month. The Fast Markets Duty unpaid Rotterdam premium has dropped 20% from $380 per ton in September to $302 today.

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This morning in metals news: U.S. nonfarm payroll employment rose by 194,000 jobs in September; meanwhile, U.S. Steel had another spill from a plant in Northwest Indiana; and, finally, U.S. gasoline exports reached seasonal highs in May, June and July.

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Nonfarm payroll employment rises

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Nonfarm payroll employment in the U.S. rose by 194,000 jobs in September, the Bureau of Labor Statistics reported.

The national unemployment rate fell by 0.4 percentage point to 4.8%.

Construction employment picked up by 22,000 in September. However, construction employment is down by 201,000 compared to its February 2020 level.

Meanwhile, manufacturing employment rose by 26,000 in September. Fabricated metal products rose by 8,000. However, motor vehicles and parts jobs fell by 6,000. Overall, manufacturing employment is down by 353,000 from February 2020.

Second spill at U.S. Steel plant

Less than two weeks after a spill from a U.S. Steel plant led to nearby beach closures, another spill occurred this week, the Northwest Indiana Times reported.

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Russia’s 15% export duty on steel has not impacted market prices for flat-rolled products, either coming into the European Union or rolled within the 27-member bloc, market participants told MetalMiner.

“The Russian [steelmakers] are absorbing it completely,” one trading source said of the export duty.

A second trader noted a similar situation.

“The export tax has nothing to do with the customer here. That is the producers’ issue,” that source noted.

See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your steel buy.

Russia export duty after two months

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Their comments followed Russian Federal Government’s Decree No. 988 of June 25. The decree imposed a 15% export duty from Aug. 1 to Dec. 31 on all steel exports – finished and semi-finished – from the country and also the wider Eurasian Economic Union. That includes not only Russia, but also Armenia, Belarus, Kazakhstan and Kyrgyzstan. It also includes observer states Moldova, Cuba and Central Asian state Uzbekistan.

The duty also applies to certain base metals, including copper, nickel and low-grade aluminum products.

Federal government officials claimed then that sharply rising steel prices in Europe, Russia’s second-largest export market, were translating to higher steel prices at home.

The European Union is also Russia’s second-largest destination market for steel exports, including finished, semi-finished and tubular products. Those exports exceeded 4.02 million metric tons in 2019, the analyst said.

That number was down 20% on the year from 5.17 million metric tons, yet the bloc retained its place as Russia’s second-largest export market.

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This morning in metals news: Ford Motor Co. is collaborating with Redwood Materials on a closed-loop battery recycling and building out the domestic electric vehicle battery supply chain; Norway will expand natural gas exports to Europe; and, lastly, aluminum prices have slowed down after peaking Sept. 13.

Many may be wondering how to set buying strategies for 2022 with so many variables in the air. The old saying goes, “Nothing kills high prices like high prices” — but does that still hold true?

Ford, Redwood to team up on closed-loop battery recycling

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Ford Motor Co. announced it will collaborate with battery materials company Redwood Materials on closed-loop battery recycling.

The companies also said they will work together to build out a domestic battery supply chain.

“Ford and Redwood are collaborating to integrate battery recycling into Ford’s domestic battery strategy. Redwood’s recycling technology can recover, on average, more than 95% of the elements like nickel, cobalt, lithium and copper,” the automaker said. “These materials can be reused in a closed-loop with Redwood moving to produce anode copper foil and cathode active materials for future battery production. By using locally produced, recycled battery materials, Ford can drive down costs, increase battery materials supply and reduce its reliance on imports and mining of raw materials.”

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This morning in metals news: U.S. Steel released its third-quarter guidance yesterday; U.S. petroleum exports just edged out imports in the first half of the year; and, lastly, unemployment rates fell in 15 U.S. states in August.

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U.S. Steel releases Q3 guidance

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On Thursday, U.S. Steel released its Q3 2021 financial guidance, forecasting EBITDA of $2.0 billion, up from $1.3 billion in the second quarter.

“We expect the third quarter to be a quarter of records for U. S. Steel,” U. S. Steel President and CEO David B. Burritt said. “Supported by strong reliability and quality performance, sustained customer demand, and continued increases in steel selling prices, we expect our Best for All℠ business model to generate record quarterly adjusted EBITDA and EBITDA margins, demonstrating the power of our strategy.”

Burritt added U.S. Steel is bullish that market fundamentals “will support a stronger for longer steel market.”

Higher steel prices into adjusted contracts and spot selling prices, plus strong customer demand, will contribute to record EBITDA in the company’s flat-rolled segment, the guidance report indicated.

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The Rare Earths Monthly Metals Index (MMI) dropped 8.5% for this month’s reading.

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Lynas updates on Malaysian operations

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Lynas Rare Earths Ltd. last month offered an update on its processing operations in Malaysia.

The plant is operating at reduced rates due to the COVID-19 pandemic.

“The Lynas Malaysia plant continues to operate at reduced rates in line with our commitment to the health and safety of our people and in compliance with the Malaysian Government’s Standard Operating Procedures (SOPs),” Lynas said in a release. “As the vigorous 3rd wave of COVID-19 in Malaysia persists, Lynas continues to maintain strict health and hygiene protocols, including COVID-19 testing for all staff and contractors prior to entry to the site.”

Furthermore, Malaysian regulatory authorities extended the deadline for “satisfaction of the licence condition related to the commencement of construction of the Permanent Disposal Facility (PDF) for WLP residue” by six months. The deadline is now March 2, 2022.

“This recognises the constraints presented by current COVID-19 conditions,” Lynas said. “We continue to engage productively with the relevant government and regulatory authorities to progress the approvals for the PDF.”

The company’s processing operations in the country has been the source of outcry from environmental activists. Activists have appealed a court’s decision to dismiss their request for review of the decision to renew the company’s operating license in 2019.

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This morning in metals news: new orders for manufactured goods posted an increase in July from the previous month; meanwhile, U.S. productivity rose by 2.1% in Q2 2021; and, lastly, the U.S. goods and services trade deficit fell from June to July.

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New orders for manufactured goods rise 0.4%

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New orders for manufactured goods rose by 0.4% in July, the U.S. Census Bureau reported today.

Furthermore, new orders for manufactured goods have increased in 14 of the last 15 months. July orders amounted to a value of $508.1 billion.

New orders had increased by 1.5% in June.

Productivity jumps 2.1%

U.S. nonfarm labor productivity increased by 2.1% in July, the Bureau of Labor Statistics reported.

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This morning in metals news: the pace of the rise of U.S. import prices slowed in July compared with the previous month; meanwhile, Nucor completed the acquisition of an insulated metal panels business; and, lastly, U.S. steel prices continue to move upward.

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US import prices up 0.3% in July

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U.S. import prices jumped by 0.3% in July, the Bureau of Labor Statistics (BLS) reported. Higher fuel prices drove the July jump, according to the BLS.

Meanwhile, import prices surged by 1.1% in June.

On the other hand, U.S. export prices rose by 1.3% in July after a 1.2% jump in June.

Nucor acquires insulated metal panels business

Nucor Corporation officially completed the acquisition of Cornerstone Building Brands’ insulated metal panels business, the Charlotte-based steelmaker recently announced.

The acquisition comes at a cash price of $1 billion.

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