Articles in Category: Ferrous Metals

earnings sign

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This morning in metals news: Cleveland-Cliffs released its preliminary Q4 2020 results; demand for sustainable aluminum is rising in the maritime industry; and U.S. steel prices continue to rise.

Cleveland-Cliffs revenue jumps

Cleveland-Cliffs reported Q4 2020 revenues of approximately $2.2 billion to $2.3 billion.

The total marked a 320% year-over-year jump.

Meanwhile, the firm reported EBITDA of $280 million to $290 million, or up 150% year over year.

Furthermore, the firm tallied steel sales volume of 1.9 million net tons.

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Demand for sustainable aluminum

Oslo-based Norsk Hydro explained that demand for sustainable aluminum products in the maritime industry is on the rise.

“We see the maritime industry has increased its focus on sustainable products, material selection and design in recent years,” said Thomas B. Svendsen, market manager in Hydro. “Electric ferries carry heavy batteries and need lighter materials. The CO2 footprint in the industry needs to be reduced and recycling of material has therefore gained traction. Aluminium is a good fit.”

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housing starts

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This morning in metals news: privately owned housing starts in the U.S. ticked up by 5.8%, according to the Census Bureau; new COVID-19 lockdown restrictions are impacting China’s major steel-producing region; and the primary aluminum market posted a surplus through the first 11 months of 2020.

Housing starts jump in December

Privately owned housing starts in the U.S. reached a seasonally adjusted annual rate of 1.67 million December, the Census Bureau reported today.

The figure marked a 5.8% increase from November.

Furthermore, the Census Bureau estimated a total of 1.38 million housing starts in 2020, a 7.0% year-over-year increase.

Meanwhile, single-family housing starts in December rose 12.0% to a rate of 1.34 million. In addition, the December rate for units in buildings with five units or more reached 312,000.

Does your company have a steel-buying strategy based on current steel price trends?

Lockdowns impact Hebei province

Hebei province is home to the heart of China’s massive steel-producing sector.

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ThyssenKrupp

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German steelmaker ThyssenKrupp must be desperate to get rid of its steel business.

The steelmaker makes a great range of products of world-class quality. The brand has undeniable strength as a result.

However, it has not and cannot make money from it.

ThyssenKrupp steel division posts losses

The ThyssenKrupp steel division lost money last year.

Quite how much is difficult to say.

However, the Financial Times reported last year the firm predicted losses of a billion Euros for 2020. That is a not inconsiderable proportion of total group losses of more than €5.5 billion reported by the Financial Times this week.

The same article reports the group’s proposal to spin off the steel division as a separate entity, apparently in the expectation it would be easier to raise investment as a standalone unit.

Do you know which market conditions are best with different steel contracting mechanisms? Check out our best practices on this topic

Previous efforts

Efforts to sell or merge the steelmaking division with competitors in recent years have failed repeatedly.

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Steel production

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This morning in metals news: the U.S. steel sector’s capacity utilization rate hit 76.7% last week; the London Metal Exchange has proposed permanently closing its iconic Ring trading floor; and the copper price has trended flat over the past week.

Steel capacity utilization reaches 76.7%

The U.S. steel sector’s capacity utilization rate hit 76.7% for the week ending Jan. 16, the American Iron and Steel Institute reported.

Production during the week totaled 1.74 million net tons, up 1.7% from the previous week. The total, however, marked an 8.8% year-over-year decline.

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LME proposes plan to permanently close historic trading Ring

The LME has proposed permanently closing its historic trading “Ring,” the Financial Times reported.

As the Financial Times notes, trading in the Ring came to a halt last year as a result of the coronavirus pandemic.

Copper price trends flat

The LME three-month copper price has trended flat over the last week.

The price closed Tuesday at $7,992 per metric ton after briefly edging over the $8,100 per metric ton threshold earlier this month.

Over the last month, the three-month copper price is up 1.7%.

Volatility is the name of the game. Do you have a steel buying strategy that can handle the ups and downs?

London Metal Exchange

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Steel is the world’s second-largest commodity after crude oil. It is 15 times the size of all other metals markets combined in terms of metric tons. Furthermore, it is worth twice their value.

Yet, until recently, it was an industry that saw little use for a futures market. That is primarily because major steel participants enjoyed stable long-term prices for the materials they needed.

Price material volatility

Prices for iron ore and coking coal, two of the essential raw materials for steel production, have become far more volatile in recent years. That volatility has sent price shocks rippling through the supply chain. In turn, it has created volatility in finished steel prices that consumers are desperate to contain.

Enter the major futures exchanges. For over 200 years, the London Metal Exchange (LME) has provided the trade – producers, traders and consumers – the opportunity to hedge their risk across a growing range of base metals.

However, only recently have exchanges such as the LME, the U.S.’s CME and the Shanghai Futures Exchange (SHFE) in China introduced products allowing the trade to hedge raw material and finished steel price risk.

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January 2021 MMI trends chartBefore we head into the weekend, let’s take a quick look back at the week that was and the metals storylines here on MetalMiner, including the release of the January 2021 MMI, a look at what might happen to the iron ore price and much more.

Inauguration Day draws near for President-elect Joe Biden, leaving metals industry groups to wonder what happens next for President Donald Trump’s signature metals policy: Section 232 tariffs on steel and aluminum imports. Whether Biden ultimately chooses to maintain those measures or do away with them remains to be seen, but metals watchers will be eyeing those developments closely.

As for metals prices, some price gains slowed down amid the festive season, but some have resumed their upward ascent in early 2021. Copper, for example, crossed the $8,100 per metric ton threshold earlier this month.

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imports

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This morning in metals news: U.S. import prices rose in December; the Aluminum Association commented on potential changes to the Section 232 aluminum tariff program; and November steel shipments dropped by 11.9%.

U.S. import prices gain by 0.9% in December

U.S. import prices jumped by 0.9% in December, per the Bureau of Labor Statistics. Furthermore, the December increase marked the largest jump in import prices since August.

Meanwhile, U.S. export prices rose by 1.1% after rising by 0.7% in November.

Aluminum Association calls for ‘targeted, multilateral’ approach

We previously noted several industry groups’ recent call for the incoming Biden administration to maintain existing steel tariffs and quotas.

In that vein, the Aluminum Association offered its own comments on the Section 232 aluminum tariff program.

“The Aluminum Association continues to favor a targeted approach to trade enforcement,” Aluminum Association President and CEO Tom Dobbins said in a prepared statement. “Across-the-board tariffs have failed to dent the non-market-based structural subsidies that drive overcapacity and hurt U.S. aluminum producers and workers. We look forward to working with President-elect Biden’s trade team on new, creative approaches to combat this perennial challenge, including renewed cooperation with traditional trading partners and allies.”

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The Stainless Monthly Metals Index (MMI) increased by 6.0% this month, as ATI issued a major announcement and China ups its stainless imports from Indonesia.

January 2021 Stainless MMI chart

ATI exits stainless steel commodity market products

Allegheny Technologies Incorporated (ATI) announced Dec. 2 that the company would exit the standard stainless sheet product market. The move reduces availability of standard 36″ and 48″ wide material.

The announcement comes as part of the company’s new business strategy. ATI will focus on investing in enhanced capabilities on higher-margin products, primarily in the aerospace and defense industries.

ATI’s departure from the stainless steel commodity portion of the market also leaves a gap for 201 series materials, which is why 201 base prices will see bigger increases than 300 or 430 series materials. Both NAS and Outokumpu announced a 201 base price increase amounting to approximately $0.0500/lb.

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

China increases Indonesia imports

Meanwhile, according to data reported by the World Bureau of Metal Statistics (WBMS), Indonesia increased its stainless steel product exports by 23.1% from 2019 to 2020.

Slab exports increased from 249,600 metric tons to 973,800 metric tons. Meanwhile, coil exports decreased from 1.5 million metric tons to 1.1 million metric tons.

During 2019, Taiwan finished as the largest consumer of Indonesian stainless steel exports, followed by China.

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The Raw Steels Monthly Metals Index (MMI) increased by 16.5% this month, as steel prices showed strength in December.

January 2021 Raw Steels MMI chart

U.S. steel events

The American Iron and Steel Institute, the Steel Manufacturers Association, the United Steelworkers union, the Committee on Pipe and Tube Imports and the American Institute of Steel Construction sent a letter to Joe Biden urging him to keep the 25% national security tariffs on steel imports that were imposed in 2018.

The industry groups emphasized that the tariffs are essential “to ensure the viability of the domestic steel industry in the face of this massive and growing excess steel capacity.”

“Removing or weakening of these measures before major steel producing countries eliminate their overcapacity — and the subsidies and other trade-distorting policies that have fueled the steel crisis — will only invite a new surge in imports with devastating effects to domestic steel producers and their workers,” the letter continued.

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steel tariff

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This morning in metals news: several industry groups urged President-elect Joe Biden to continue existing steel tariffs and quotas; Germany’s OGE and Thyssenkrupp and Norwegian energy company Equinor are collaborating to mitigate emissions; and Norsk Hydro and Nuvosil are working on aluminum and silicon recycling technology.

Industry groups urge Biden to keep steel tariffs

President Donald Trump in 2018 used Section 232 of the Trade Expansion Act of 1962 to impose steel tariffs of 25%.

The steel tariffs remain in place, as does the 10% tariff on aluminum.

President-elect Joe Biden is set to take office next week. As such, many have wondered how the former vice president’s trade policy will differ from Trump’s approach.

In a joint letter, the American Iron and Steel Institute (AISI), Steel Manufacturers Association (SMA), the United Steelworkers union (USW), The Committee on Pipe and Tube Imports (CPTI) and American Institute of Steel Construction (AISC) urged Biden to keep the steel tariffs in place.

“Continuation of the [steel] tariffs and quotas is essential to ensuring the viability of the domestic steel industry in the face of this massive and growing excess steel capacity,” the statement reads.

The letter adds that removing or weakening the measures will invite a “new surge” in imports.

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OGE, Thyssenkrupp, Equinor work together to curb Duisburg emissions

According to Reuters, German firms OGE and Thyssenkrupp and Norwegian energy company Equinor will work together to curb emissions from Thyssenkrupp’s plant in Duisburg, Germany.

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