Articles in Category: Ferrous Metals

Continuing our review of 2021 — we previously recapped the most-viewed carbon steel and aluminum articles of the year — today we’ll take a look at stainless steel.

As MetalMiner analyst Nichole Bastin noted earlier this month, nickel prices surged to a seven-year high in November. More than two-thirds of global nickel production goes toward stainless steel output.

After peaking in late November, nickel prices retraced and consolidated, reaching $19,700 per metric ton last week.

Meanwhile, earlier this year, nickel prices plunged on the heels of nickel supply news from China’s Tsingshan Holding Group. The LME three-month nickel price plunged from around $19,700 in late February to $16,000 per metric ton in early March.

However, buyers continue to face shortages of stainless steel. According to MEPS International Inc., a U.K.-based steel market analysis firm, U.S. stainless steel production is forecast to rise by 16% this year.

Even so, shortages will likely continue into next year.

“Shortages of stainless steel, particularly cold rolled coil, are likely to be a feature of the domestic market in the short term,” MEPS said in a Dec. 1 report.

Are you under pressure to generate stainless steel cost savings? Make sure you are following these five best practices

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As the year draws to a close, let’s take a look back at the MetalMiner stories that proved to be most popular with readers this year, starting with carbon steel.

steel production

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As with metals as a whole, steel prices experienced a rocky 2020 after the onset of the coronavirus pandemic. This year, however, proved a different story, as U.S. steel prices experienced a nearly uninterrupted ascent, which only came to an end in October.

The coronavirus pandemic slammed metals demand overall, including steel demand, in 2020. The automotive industry idled production at the end of Q1 and into Q2 2020, severely denting demand. However, eventually automakers restarted lines and demand returned. Automakers continue to face supply shortages, however, which has contributed to low inventory and capped sales.

In August 2020, U.S. steel prices began a rise that only came to an end in October 2021. Hot rolled coil prices, for example, surged to around $1,930 per short ton in October, according to MetalMiner Insights data. HRC prices remain elevated but have since declined, falling to $1,697 per short ton last week.

The emergence of the omicron variant in recent weeks has cast a pall over global markets, as several European countries reinstituted lockdown measures amid surging infection rates.

On the policy front, President Joe Biden signed the Infrastructure Investment and Jobs Act in November. The bill, which includes $550 billion for infrastructure improvements, should boost demand for metals, generally. However, that boost is not likely to materialize immediately.

With that, let’s take a look back at the most-viewed carbon steel stories of the year on MetalMiner.

Stop obsessing about the actual forecasted steel price. It’s more important to spot the trend

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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, including declining steel prices, a look at inflation’s impact on metals and much more:

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Week of Dec. 13-17 (steel prices, inflation impact and more)

steel shipment

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This morning in metals news: U.S. steel capacity utilization ticked up to 82.4% last week, as steel prices continue to cool; meanwhile, Nucor Corporation announced it is expanding its production footprint by acquiring majority ownership of California Steel Industries; and, lastly, U.S. stainless steel imports declined in October.

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US steel capacity utilization hits 82.4%

steel production

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The U.S. steel capacity utilization rate rose to 82.4% for the week ending Dec. 11, the American Iron and Steel Institute reported this week.

The rate increased from 81.9% the previous week.

U.S. steel output reached 1.82 million tons last week, up 0.6% from the previous week. Meanwhile, output in the year to date is up 19.4% to 89.9 million tons.

Meanwhile, U.S. steel prices continue to cool after rising for more than a year.

U.S. hot rolled coil reached $1,731 per short ton last week, or down 6.9% month over month, according to MetalMiner Insights data. Cold rolled coil fell 1.9% to $2,086 per short ton. Hot dipped galvanized fell 4.4% to $2,105 per short ton.

Nucor to acquire California Steel Industries

In M&A news, U.S. steelmaker Nucor announced it is acquiring a majority stake in California Steel Industries.

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News reports indicate India is set to become a net exporter of steel to China but will be surpassed by Indonesia as the world’s second-largest stainless steel producer.

A new report by a financial credit rating company has forecast that going by current trends, India would turn net exporter of steel to China in this fiscal.

India’s exports for the current fiscal year, said the report, “Steel Industry: Trends & Prospects” released recently by Infomerics Valuation and Rating Pvt Ltd., could surpass those of fiscal year 2021.

This comes despite India being hit by the COVID-19 pandemic and existing border tensions with China.

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

Indonesia to pass India in stainless steel output; U.S. stainless output to rise

stainless steel coils

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But the news of positive exports could be dampened a bit by another forecast.

Indonesia could replace India as the world’s second-largest producer of stainless steel, according to the U.K.-based research institute MEPS.

Per the institute, India’s No. 2 position is “under threat.” MEPS forecast global stainless steel production of 56.5 million tons in 2021, marking 11% year-over-year growth. Meanwhile, for 2022, it forecast output of 58.2 million tons in 2022, or up 2.5% year over year.

“Expansion in Indonesian output should continue to outpace that in India,” MEPS added. “However, rises in other regions are projected to be modest. This will bring little comfort to buyers that are contending with domestic shortages and soaring prices.”

The research institute said Indonesia is likely to displace India as the second-largest stainless steel producer this year with production of 4.5 million tons.

Meanwhile, in China, power rationing and turmoil in the real estate sector continue to impact output and consumption levels.

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The Raw Steels Monthly Metals Index (MMI) dropped by 7.7% month over month to 108, as steel prices fell in November.

December 2021 Raw Steels MMI

The U.S. steel market continues to show weakness. As HRC prices endure week-over week-declines, mill lead times have narrowed to historically average ranges.

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UK, Japan, Korea seek removal of Section 232 tariffs

Following an agreement reached with the E.U., the U.K., Japan and South Korea have all requested to renegotiate the Section 232 tariffs with the U.S.

The Trump administration imposed the tariffs in 2018, levying duties of 25% and 10% on steel and aluminum imports, respectively, from most countries. In late October, the parties announced that the U.S. and E.U. had renegotiated the import restrictions in favor of a tariff-rate quota system. Under the new arrangement, the U.S. would permit a limited volume of the metals produced in the E.U. into the U.S. with no Section 232 duty applied. For steel products, the quota would total 3.3 million metric tons, effective Jan. 1, 2022.

Japan, in particular, had requested an exemption from the tariffs since their onset, instead in favor of a trade agreement in line with WTO rules. Alongside the establishment of Japan-U.S. Commercial and Industrial Partnership (JUCIP), the U.S. said in mid-November that it would open discussions with Japan about a possible ease to the current duties. This announcement prompted South Korea to officially request negotiations, as both Japan and the E.U. are major competitors to the Korean steel industry.

Meanwhile, in a joint statement released Dec. 7, the U.S. and Britain indicated they will open talks regarding the tariffs. British trade minister Anne-Marie Trevelyan has invited the U.S. Commerce Secretary, Gina Raimondo, to visit the U.K. in January, as pressure grows to raise Britain’s retaliatory tariffs on U.S. products.

Chinese daily crude output lowest since 2017

Chinese daily steel production hit a four-year low in October.

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It is always a challenge reading markets, whether you look at fundamentals of supply, demand and macro economic developments or whether you are a chartist looking at price trends to see how they compare to previous models, assessing price movement relative to Fibonacci levels and indications from high/low daily pricing data.

One issue we repeatedly see is an overreliance on one metric. The media love a headline and will make a prediction based on just one data point. Stock levels fall — prices must rise, or imports rise – so demand must be strong.

If only life were quite so simple.

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Rising imports, iron ore prices

iron ore

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More seasoned analysts understand that, and a recent Reuters post is a case in point.

Rising imports and a 25% surge in iron ore prices over just three weeks into top consumer China have been taken by many as a sure bet steel demand is strong. China buys some 70% of seaborne iron ore. As such, it is overwhelmingly the main driver of demand.

The post cites Chinese customs data from Dec. 7 that reported November iron ore imports of 104.96 million metric tons. That total is up 14.6% from October and marks the strongest month since July 2020.

That all sounds immensely bullish, and will no doubt support prices that have pulled back marginally but remain near multiweek highs at over $100 per metric ton equivalent on China’s Dalian exchange (up from the mid $80s early last month).

The market also took support from China’s politburo, promising to promote a “healthy development” of the property sector. That comes shortly after China’s central bank announced a cut in banks’ reserve requirement ratio to bolster slowing economic growth.

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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 coverage here on MetalMiner, including coverage of aluminum prices, a General Motors collaboration with MP Materials aimed at developed a fully integrated U.S. rare earth magnet supply chain and much more:

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

Week of Dec. 6-10 (aluminum prices, rare earth magnet supply chain and more)

aluminum price

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  • Nucor Corporation announced plans to build a rebar micro mill in the South Atlantic region. The company already has rebar micro mills in Missouri and Florida.
  • U.S. automotive sales remain depressed as a result of low inventory.
  • U.S. construction spending through the first 10 months of the year jumped 7.5% year over year, the Census Bureau reported.
  • The U.S. steel capacity utilization rate dipped to 81.9% last week, the American Iron and Steel Institute reported.
  • Aluminum prices trended sideways in November, MetalMiner analyst Nichole Bastin explained.
  • Energy prices are on the rise in Europe, putting the squeeze on both residential and industrial users.
  • Like aluminum prices, copper prices also consolidated in November after an October spike.
  • Bastin checked in on the stainless steel market, including nickel price volatility.
  • General Motors said it will invest $51 million toward equipment for its aluminum die casting foundry in Bedford, Indiana.
  • Stuart Burns also took a look at aluminum prices and China’s impact on the aluminum market.
  • China introduced a draft plan to reduce emissions from metals by 5% by 2025.
  • Lastly, in the rare earths space, General Motors announced a collaboration with MP Materials to develop a fully integrated supply chain for rare earth magnets. MP materials operates the Mountain Pass rare earths mine and processing facility in California.

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The Stainless Monthly Metals Index (MMI) held flat this month, while the stainless steel market is tight.

December 2021 Stainless MMI chart

Nickel prices appear to have consolidated following the late November spike. As with other base metals, nickel has started to show a high degree of volatility and uncertainty that would suggest a breakout of the current trading range is imminent.

Multiple bearish indicators, including decreased buyer volume as well as bearish wedge formations, lead to the probability of further breakdowns in price should nickel prices fail to sustain a bullish breakout above October’s high.

Indonesia expands stainless output

As the year winds to a close, Indonesia is on track to overtake India as the world’s second-leading stainless steel producer, according to data released by the U.K.-based research institute MEPS. Production during 2021 is expected to surpass 4.5 million tons. COVID-19 lockdown measures and oxygen rationing to steelmakers impacted Indian production in Q2. Production had returned on pace by the third quarter.

Meanwhile, as a result of power shortages and production cuts throughout the year, Chinese output remained constrained. Production in South Korea and Japan, however, is set to grow by 12% and 20%, respectively.

European output is expected to reach 7.06 million tons. U.S. total is expected to expand by 16% year over year to 2.5 million tons. In spite of this climb, U.S. flat-rolled stainless supply continues to be constrained, with no additional capacity on the horizon.

In total, forecasts for global stainless steel output in 2021 have reached 56.8 million tons to reflect 11.6% year-over-year growth. For 2022, global output is expected to expand by an additional 2.5% to 58.2 million tons.

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This morning in metals news: steel capacity utilization fell to 81.9%; lead prices have lost ground this month; and, lastly, Liberty Steel announced the restart of its Georgetown, South Carolina plant.

During the last MetalMiner webinar of 2021, the MetalMiner team will take a look ahead and overview price predictions for 2022. To attend, sign up on the MetalMiner Events page

Steel capacity utilization rate falls to 81.9%

steel production

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The U.S. steel capacity utilization rate fell to 81.9% for the week ending Dec. 4, the American Iron and Steel Institute reported.

U.S. steel output during the week totaled 1.81 million net tons, or down 1.6% from the previous week. For the year to date, steel production totaled 88.08 million net tons, or up 19.6% year over year, at a capacity utilization rate of 81.6%.

U.S. steel prices began to backtrack in September after a year of uninterrupted rises.

Hot dipped galvanized closed last week at $2,131 per short ton, or down 3.8% month over month, according to MetalMiner Insights data.

Hot rolled coil closed last week at $1,770 per short ton, or down 6.1% month over month.

Lead prices retreat

Meanwhile, lead prices have lost ground so far this month.

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