Articles in Category: Macroeconomics

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 Consumer Price Index (CPI) for All Urban Consumers increased by 0.9% in June, the Bureau of Labor Statistics reported today; meanwhile, U.S. crude oil production efficiency increased in the Bakken region in 2020; and, lastly, North American Stainless experienced a production slowdown late last week.

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

Consumer Price Index up 0.9%

Consumer Price Index

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The Consumer Price Index for All Urban Consumers increased by 0.9% in June, the Bureau of Labor Statistics reported today.

The index had jumped by 0.6% in May.

The June jump marked the largest one-month increase since June 2008, the BLS reported, when the index jumped by 1.0%.

US crude oil production efficiency up in Bakken

Crude oil production efficiency increased in the Bakken region in 2020, the Energy Information Administration reported.

However, the Bakken region proved to be the only US region with a rise in production efficiency last year.

“In 2020, U.S. initial crude oil production per well, or well production efficiency, increased significantly in the Bakken region, according to our Drilling Productivity Report (DPR), which we update monthly,” the EIA reported. “Productivity in other drilling regions remained largely steady or decreased slightly, DPR data shows.”

NAS delays

Last week, Bloomberg reported production challenges at North American Stainless’ (NAS) facility in Ghent, Kentucky, reporting a shortage of industrial gases that impacted operations and caused it to declare force majeure.

NAS accounts for approximately 40% of the U.S. stainless steel market.

However, a source told MetalMiner that NAS sent letters to customers rescinding the force majeure and had only opted to reduce, rather than halt, production. The slowdown will result in delays of about two weeks, MetalMiner has learned, and will largely impact September order books.

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This morning in metals news: US nonfarm payroll employment rose by 559,000 in May; the EU plans to impose carbon emissions costs on imports of steel, cement and electricity, Reuters reported; and the LME copper price dropped below $10,000 per metric ton.

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.

Nonfarm payroll employment rises in May

nonfarm payrolls

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Nonfarm payroll employment in the US increased by 559,000 in May, the Bureau of Labor Statistics reported today.

Meanwhile, the unemployment rate declined by 0.3 percentage point to 5.8%.

“Notable job gains occurred in leisure and hospitality, in public and private education, and in health care and social assistance,” the Bureau of Labor Statistics reported.

EU to slap carbon emissions costs on imports

The European Union will introduce new carbon emissions costs on imports of steel, cement and electricity, Reuters reported.

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This morning in metals news: aluminum roller and recycler Novelis announced its quarterly financial results; meanwhile, the United States International Trade Commission voted Tuesday on anti-dumping duties for prestressed concrete steel wire strand; and, lastly, the Consumer Price Index rose by 0.8% in April.

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

Novelis reports ‘outstanding’ quarter

earnings sign

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Aluminum roller and recycler Novelis reported net income of $180 million during the quarter ending March 31, 2020 (Q4 of fiscal year 2021).

The performance marked a jump from $63 million in Q4 of fiscal year 2020.

“Guided by our purpose and driven by the resilience of our people and the strength of our partnerships, we safely navigated this extraordinary year to achieve outstanding results,” President and CEO Steve Fisher said. “With the ongoing successful integration of Aleris, a diverse and innovative product portfolio, and unmatched geographic footprint, we have proven our ability to deliver sustainable aluminum solutions to customers in a way that resulted in record financial performance.”

Furthermore, among other factors, higher average aluminum prices helped drive a 33% year-over-year rise in sales to $3.6 billion.

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productivity word cloud

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This morning in metals news: nonfarm business sector labor productivity jumped by 5.4% in the first quarter; the CME Group said it will permanently close the trading pits it shut down last March; and US energy production dipped last year.

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US nonfarm labor productivity shoots up in Q1 2021

US nonfarm labor productivity rose by 5.4% in the first quarter, the Bureau of Labor Statistics reported.

Furthermore, output increased by 8.4% and hours worked increased by 2.9%.

Meanwhile, manufacturing labor productivity rose by 0.1% in Q1 2021. Manufacturing output rose by 2.4% and hours worked by 2.3%.

Durable goods manufacturing productivity rose by 0.7% in the first quarter. Meanwhile, nondurable goods manufacturing productivity increased by 0.3%.

CME closes trading pits permanently

After closing its open outcry trading pits last March, the CME Group said the closure is now permanent.

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This morning in metals news: US real GDP grew at an annual rate of 6.4% in Q1 2021; meanwhile, U.S. Steel reported its Q1 financial results; and, lastly, Intel cited the “explosive growth” in semiconductors in its Q1 2021 financial report.

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US GDP grows 6.4% in Q1

US GDP

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US GDP grew at an annual rate of 6.4% in Q1 2021, the Bureau of Economic Analysis (BEA) reported this week.

Real GDP had increased by 4.3% in Q4 2020. After GDP plunged a record 33% in Q2 2020, GDP has increased each of the past three quarters.

“The increase in first quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic,” the BEA said in its report. “In the first quarter, government assistance payments, such as direct economic impact payments, expanded unemployment benefits, and Paycheck Protection Program loans, were distributed to households and businesses through the Coronavirus Response and Relief Supplemental Appropriations Act and the American Rescue Plan Act.”

Personal consumption expenditures (PCE), nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending paced the Q1 rise, the BEA added.

In addition, increases in durable goods (led by motor vehicles and parts), nondurable goods, and services paced the rise in PCE.

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electric vehicle charging

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Most carmakers had a pretty torrid first half of 2020, with factories disrupted, show rooms closed and consumers bunkered down in their homes. Sales plummeted across Europe and North America.

However, the second half of last year and, particularly, the first quarter of this year have seen carmakers’ prospects come roaring back.

The MetalMiner team will present a commodity forecast for copper, aluminum, stainless and carbon steel on Wednesday, March 24, at 10 a.m. CDT https://zoom.us/webinar/register/WN_6J8wAyYySfihVk3ZUH9yMA.

The move to electric vehicles

Yet, the turmoil being experienced by the industry is much more about the stop-go of last year.

Rather than cause a retrenchment, the pandemic has helped accelerate the move to electrification.

The greatest spur, however, has undoubtedly been government legislation.

EU penalties on carmakers that fail to meet emission reduction targets are driving a mass migration from internal combustion engines (ICE) to hybrids and fully electric vehicles. After a slow start, European carmakers are adopting aggressive transition plans.

Volkswagen goes all in on electric vehicles

Just this past week, Volkswagen announced — to the joy of its shareholders, who piled in to push shares up 20% — that the German automaker aims to become the global leader in electric cars by 2025. The automaker is placing heavy bets on next-generation lithium-ion batteries, the Financial Times reported.

Volkswagen says it will sell 1 million electric or hybrid cars this year, a tenfold increase from 2019, with half being fully electric vehicles and the rest plug-in hybrids.

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housing starts

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After what was a frigid month across the country, February housing starts declined in the US. February saw a historic chill in Texas and elsewhere in the region — in addition to inclement weather in other, traditionally colder parts of the country — that led to many losing power and a decline in natural gas production, among other impacts.

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

US housing starts fall 10.3% in February

With residential and commercial customers losing power across most of Texas last month, it’s not surprising that construction activity slowed.

According to the US Census Bureau’s latest report today, US housing starts reached a seasonally adjusted annual rate of 1.42 million. The February rate marked a 10.3% decline from the previous month.

Furthermore, the rate declined by 9.3% from February 2020.

Furthermore, single-family housing starts in February reached a rate of 1.04 million, or down 8.5% from January. In addition, the February rate for units in buildings with five units or more reached 372,000, the Census Bureau reported.

Building permits also decline

In addition, building permit authorizations declined in February by 10.8%, down to a rate of 1.69 million.

Meanwhile, single-family authorizations fell 10.0% to a rate of 1.14 million. Authorizations of units in buildings with five units or more reached a rate of 495,000.

Materials prices rise

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Department of Commerce building

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This morning in metals news: the Department of Commerce said imports of common alloy aluminum sheet from 18 countries are being dumped and benefiting from subsidies; Federal Reserve Governor Lael Brainard this week commented on the US’s economic outlook; and the copper price has retraced somewhat over the last week.

DOC makes common alloy aluminum sheet ruling

The Department of Commerce ruled that common alloy aluminum sheet imports from 18 countries benefited from either dumping or countervailable subsidization.

The affirmative final dumping determination related to imports from: Bahrain, Brazil, Croatia, Egypt, Germany, India, Indonesia, Italy, Oman, Romania, Serbia, Slovenia, South Africa, Spain, Taiwan, and Turkey.

Meanwhile, the countervailing subsidy investigation referred to common alloy aluminum sheet imports from Bahrain, India and Turkey.

In 2019, Germany sent the most common alloy aluminum sheet, by value, to the US, at $286.6 million.

Don’t miss the MetalMiner analyst team on March 24 at 10:00 a.m. CDT for a 30-minute metals market forecast and strategies to deploy in falling markets:

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gold price

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This morning in metals news: the gold price continues to slide; the Federal Reserve released its latest Monetary Policy Report; and the record freeze in Texas is disrupting natural gas production.

Gold price weakens

After surging to around $2,035 per ounce in August, the gold price for the most part trended in a band between $1,850-$1,950 through the balance of 2020.

Of late, however, the gold price has retraced, even falling below the $1,800 threshold.

Gold closed Thursday at $1,775 per ounce.

The gold price has fallen, even as the US dollar has also continued to lag. The US dollar index reached 90.23 today, compared with just over 99 a year ago.

One thing worth monitoring is growing interest in cryptocurrencies, particularly Bitcoin. The cryptocurrency has surged above the $53,000 mark and jumped by approximately 80% this year.

Amid a run of loose monetary policy from central banks around the world, some investors will look to other assets. That could mean they’ll even look to assets other than time-tested safe havens, like gold.

It’s unlikely that the US dollar will lose its status as the global reserve currency anytime soon. However, cryptocurrencies like Bitcoin could potentially weigh on gold, leading some investors to rethink traditional safe-haven asset strategy.

A lot can change in a year. In February 2020, Bitcoin hovered around just under $10,000.

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

Fed releases Monetary Policy Report

Speaking of currency, the gold price and monetary policy, the Federal Reserve today released its latest Monetary Policy Report.

The report notes the labor market recovered as the year progressed. However, the pace of the recovery slowed down significantly late in 2020.

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