Articles in Category: Ferrous Metals

While global steel production levels remain well ahead of levels seen at the same time last year — when the COVID-19 was still only in its early days and demand had not yet had a chance to bounce back — output levels in June did fall compared with the previous month.

China steel production

Zhao Jiankang/AdobeStock

According to the World Steel Association’s latest monthly report, global crude steel production totaled 167.9 million net tons in June.

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

Steel production falls month over month

Global steel production dropped 4.0% from May’s 174.8 million net tons.

However, global output rose by 11.6% on a year-over-year basis. June 2020 production totaled 150.4 million net tons.

Chinese steel production drops

Top steel producer China also saw its steel production fall in June compared with the previous month.

China, which has moved to curb steel production in efforts to meet emissions targets, produced 93.9 million tons in June. The total marked a 5.6% decline from 99.5 million tons in May.

MetalMiner’s Stuart Burns weighed in on the recent steel price rally in China and the impact of production cut mandates from Beijing.

“Since prices came off they have been making a steady recovery,” he wrote. “Beijing’s pressure to curb excess production capacity as part of wider environmental targets raises the prospect of material shortages in the face of still robust demand.”

The Chinese cold rolled coil price surged above $1,100 per metric ton in May before plunging after Beijing’s attempt to curb prices by issuing a warning to speculators. The price proceeded to drop to around $930 per ton but has since recovered. The Chinese CRC price closed Monday at $996 per metric ton.

Chinese hot rolled coil has followed a similar trajectory, closing Monday at $915 per metric ton.

Around the world

No. 2 steel producer India churned out 9.4 million tons in June, up 21.4% year over year.

Meanwhile, Japan’s output rose 44.4% year over year to 8.1 million tons.

In addition, U.S. production rose 44.4% to 7.1 million tons. Estimated Russian production reached 6.4 million tons, or up 11.4% year over year.

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This morning in metals news: the U.S. steel capacity utilization rate rose further to 84.6% last week; miner BHP announced a nickel supply agreement with Tesla; and, lastly, crude oil imports have been on the rise over the last four weeks.

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

Steel capacity utilization hits 84.6%

steel shipment

Hor/Adobe Stock

Steel capacity utilization in the U.S. steel sector reached 84.6% for the week ending July 24, the American Iron and Steel Institute reported.

The rate increased from 84.1% the previous week and from 60.3% during the same week in 2020.

Steel production during the week ending July 24 totaled 1.87 million net tons, or up 0.5% from the previous week. Furthermore, output increased 38.4% on a year-over-year basis.

BHP announces nickel supply deal with Tesla

Miner BHP announced a new nickel supply deal with electric vehicle maker Tesla.

BHP will supply the EV maker with nickel from its Nickel West asset in Western Australia.

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U.S. steel imports reached an estimated 2.6 million metric tons in June, the Census Bureau reported today.

The total marked a jump of 13% from the 2.3 million metric tons the U.S. imported in May.

US steel imports rise

steelmaking in an EAF

nikitos77/Adobe Stock

Furthermore, through May, U.S. steel imports totaled 10.7 million metric tons, up 7% from 10.0 million through the first five months of 2020.

Pacing the June rise was a jump in imports of blooms, billets and slabs. Imports of the category reached 795,863 metric tons in June, up 31.7% from 604,340 metric tons in May. Meanwhile, the June total rose a whopping 1,000% compared with June 2020.

Imports of oil country goods jumped 35.2% from May to 154,073 metric tons in June.

In addition, imports of hot rolled sheets jumped by 50.7% to 311,461 metric tons in June. Imports of steel rebar rose 12.0% to 94,915 metric tons.

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It is reassuring to see a metal price driven by good old fundamentals.

With so much buzz around supercycles and electrification, the impact of the speculative element in pricing has been much in evidence this year for products like copper and oil.

But according to a recent Reuters post, solid supply and demand fundamentals are driving nickel.

Do you know the five best practices of sourcing metals, including stainless steel?

Supply and demand fundamentals pushing nickel prices

stainless steel background

Oksana Kuzmina/Adobe Stock

A strong rise in the nickel price early this year resulted in the three-month LME quotation hitting a seven-year high of over $20,000 per ton before crashing back to $15,665 during the first half of March. Announcements by Tangshan Stainless in Indonesia that it would switch production of its refined nickel output to an EV cathode battery chemistry undermined the presumption of a looming shortfall in battery quality metal.

The narrative has since moved from nickel being a tight battery grade metal market to simply a tight refined metal market.

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This morning in metals news: South Korean steelmaker POSCO reported its strongest operating profit in Q2 since Q3 2010; the United States International Trade Commission made a determination regarding steel wire mesh from Mexico; and, lastly, tin prices have been soaring.

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

POSCO records strong Q2

POSCO logo

Dennis/Adobe Stock

South Korean steelmaker POSCO reported its strongest operating profit since 2010 in the second quarter of this year.

The steelmaker reported Q2 2020 operating profit of 168 billion KRW ($145.6 million), which jumped to 2,201 billion KRW ($1.9 billion) in Q2 2021.

Crude steel production reached 9.45 million tons in Q2 at a capacity utilization rate of 93.2%. Meanwhile, the steelmaker tallied 9.56 million tons in Q1 at a rate of 95.3%.

However, the Q2 rate marked a sizeable jump from the second quarter of 2020, when output reached 7.79 million tons at rate of 77.0%.

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MetalMiner experts recently joined ROTH Capital Partners for a webinar that covered a wide range of metals topics, including oil prices, macroeconomic trends, and insights into the aluminum, steel and copper markets.

bull market

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The webinar, which took place July 14, followed up on a previous MetalMiner-Roth webinar on May 20, 10 days after metals surged to record highs. Copper, for example, reached an all-time on May 10. MetalMiner CEO Lisa Reisman and Vice President of Business Solutions Don Hauser joined to share their insights on various markets, recapping metals movements in the two months since that peak.

If you missed it live, register here to receive a copy of the webinar recording to hear all of Reisman and Hauser’s insights from the hourlong webinar.

On July 28, get a sneak peek of the MetalMiner annual budgeting and forecasting workshop (a three-hour virtual event that will take place in August 2021). Get ready to plan for 2022. 

Bull market

While prices have come off of the record highs seen in May, they remain elevated. In short, we remain in a bull market.

“We are still in a bull market,” Reisman said. “The nonferrous metals are taking a pause but unless we see them start to fall off toward support levels … they’re still in a bull market.”

However, in terms of the “supercycle” narrative — which we have covered in this space previously — MetalMiner remains skeptical.

“The reason we’re struggling with the big supercycle narrative is that we would expect to see a decade, 1o years, of sustained, upward demand,” she said. “We don’t quite see that.”

With that said, metals demand currently is strong across a range of industries.

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This morning in metals news: the U.S. steel capacity utilization rate rose to 84.1% last week; privately owned housing starts jumped in June; and, lastly, Pedro Castillo has been declared president-election in Peru.

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

US steel capacity utilization rises to 84.1%

hot rolled steel

niteenrk/Adobe Stock

The U.S. steel capacity utilization rate continues to rise, jumping to 84.1% for the week ending July 17, the American Iron and Steel Institute reported.

The sector churned out 1.86 million net tons during the week. The output total marked an increase of 0.4% from the previous week and 37.7% year over year.

For the year to date, output reached 50.8 million net tons at a capacity utilization rate of 79.6%.

Housing starts jump in June

Meanwhile, privately owned housing starts reached a seasonally adjusted annual rate of 1.64 million in June, the Census Bureau reported.

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Prices for hot rolled coil in Western Europe have started to slow on subdued demand, due to the summer season and competitive import offers, market participants told MetalMiner.

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

Hot rolled coil prices slow

hot-rolled coil steel

taitai6769/Adobe Stock

The flat rolled product has transacted in the past week at closer to €1,200 ($1,415) per metric ton exw for November delivery. That compares with a price range of €1,150-1,200 in late June, sources said.

Producers sought to push HRC prices up to €1,250 ($1,475), one trading source told MetalMiner. End users, however, did not accept the increase.

Severe flooding late last week in the Netherlands, Belgium and Germany’s North Rhine-Westphalia state, however, have created logistics disruptions in those areas. This prompted ThyssenKrupp Steel to declare on Friday a force majeure on its deliveries, a spokeswoman for the German group told MetalMiner.

“That doesn’t help the supply for sure” as it could tighten the market and mitigate any price declines, the analyst warned.

Higher temperatures in the European summer as well as workers and businesses taking holidays in July and August, resulting in lower activity, are now putting pressure on prices for the flat rolled products.

The import market is also adding pressure to local prices, however, sources noted.

Offers on HRC from mills in Japan, Indonesia and Taiwan are about $1,170-1,200 per ton CFR European ports for September/October delivery.

“I think that it is fair to say that import activity will pick up,” one analyst said.

Lead times on the domestic market are in some cases as far out as Q1 of 2022, he added.

Uncertainty over imports

The analyst warned, however, that it is for now uncertain what kind of impact Russia’s planned introduction of a 15% export tax from Aug. 1 on all steel products – semis and finished – would have on import markets into Europe.

China is also weighing the introduction of an export tax on its steel exports in order to cool its domestic market, one source said, after canceling in May the export rebate on the 13% value-added tax failed to bring the desired effect, sources noted.

Meanwhile, the European Commission, the European Union’s executive arm, opened up an antidumping investigation in June on hot dipped galvanized coil imports from Russia and Turkey. That prompted producers in those two countries to increase offer volumes, the trader said.

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Novolipetsk Steel (NLMK) reported a 10.8% increase year over year in its crude production for H1 2021. The steelmaker benefited from stronger demand, as economies in Russia and abroad restarted economic activity, the group said.

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

NLMK ramps up production

Postmodern Studio/Adobe StockTotal crude production across all NLMK’s steelmaking assets came to 8.94 million metric tons, compared with 8.07 million tons over the same time in 2020, the group said in its July 13 operational results.

Rebuilding work on the converter shop at NLMK’s main site in Lipetsk also helped to raise production, the group added. Its capacity percentage averaged to 95.5%, up from 93% over the first six months of 2020.

NLMK has a crude steel capacity of 17 million metric tons per year. The majority of that volume comes from Lipetsk, which can pour up to 12.4 million metric tons per year. The crude steel is then cast into slab for rolling hot and cold rolled coil transformer and dynamo steel, as well as pre-painted.

Lipetsk also supplies its slabs to assets in Europe and the United States for further rolling into coils or plate.

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This morning in metals news: Chinese steel exports surged in June, according to General Administration of Customs data; meanwhile, the average cost for U.S. solar power construction continued to decline in 2019; and, lastly, Cleveland-Cliffs released its Sustainability Report 2020.

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

Chinese steel exports jump in June

China map

Zerophoto/Adobe Stock

Chinese steel exports jumped by 23% to 6.49 million tons in June, the General Administration of Customs reported this week.

The country reported steel exports 5.27 million tons in May.

Meanwhile, exports of unwrought aluminum and aluminum products reached 454,397 tons in June, up from 439,097 tons in May.

In addition, exports of rare earths fell from 4,171 tons in May to 4,012 tons in June.

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