The Federal Reserve reported October 2020 industrial production rose 1.1%.

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October 2020 industrial production rises

Per the Fed, October 2020 industrial production rose but remained 5.6% lower than the pre-pandemic level in February.

However, the Fed also noted the industrial production index has recovered most of the 16.5% decline posted from February to April.

Manufacturing gains

As the U.S. continues to battle the pandemic and its impacts across the board, manufacturing showed positive signs in October.

Manufacturing output ticked up 1.0% last month after a 0.1% increase in September.

Nonetheless, the sector still has a ways to go. Manufacturing output in October remained 5.0% below its February level.

Manufacturing capacity utilization rose 0.7 percentage point to 71.7%, up 11.6 percentage points from April. However, the rate remained 6.5 points below the long-run average (1972-2019).

“The index for durable manufacturing stepped up 0.9 percent, as small drops in the indexes for furniture and related products, fabricated metal products, and motor vehicles and parts were outweighed by gains elsewhere, especially for aerospace and miscellaneous transportation equipment and for miscellaneous manufacturing,” the Fed reported.

Meanwhile, the index for nondurables ticked up by 1.2%.

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This morning in metals news: the China Manufacturing Purchasing Managers’ Index (PMI) fell slightly from the previous month; Ford Motor Co. released its Q3 financial results; and, finally, Oslo-based Norsk Hydro recently released its Q3 financials.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

China Manufacturing PMI down

The China Manufacturing PMI fell 0.1% in October, down to 51.4%, the National Bureau of Statistics reported Monday.

After plummeting to 35.7 in February, the China Manufacturing PMI has been over 50 every month since.

Ford releases Q3 financials

Ford reported Q3 revenue of $37.5 billion, up from $37.0 billion in Q3 2019.

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Anastasiia Usoltceva/Adobe Stock

The Federal Reserve reported September 2020 industrial production slipped 0.6% in September.

While not a precipitous drop, the September drop broke a streak of four straight months of gains.

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September 2020 industrial production still below pre-pandemic levels

According to the Fed, industrial production has to date recovered more than half of its decline from February to April.

Nonetheless, the September industrial production level remained down 7.1% from its pre-pandemic level in February.

“Manufacturing output decreased 0.3 percent in September and was 6.4 percent below February’s level,” the Fed reported. “The output of utilities dropped 5.6 percent, as demand for air conditioning fell by more than usual in September. Mining production increased 1.7 percent in September; even so, it was 14.8 percent below a year earlier.”

Capacity utilization drops

Meanwhile, the industrial sector’s capacity utilization fell by 0.5 percentage point in September, down to 71.5%.

The rate marked an 8.3-percentage-point decline from the long-run average (i.e., 1972-2019).

However, the September rate is up 7.3 percentage points from its low in April, the Fed reported.

The numbers by market group

Broken down by market group, the index for consumer goods fell 1.6%.

Within consumer goods, the indexes for automotive products and consumer energy products fell by more than 4%.

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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: Cleveland-Cliffs’ acquisition of ArcelorMittal USA; a breakdown of the British automotive manufacturing sector’s struggles; the PSA–Fiat Chrysler merger; primary aluminum production; the U.S. steel capacity utilization rate; and Hurricane Laura’s impact on Gulf of Mexico crude oil production.

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Week of Sept. 28-Oct. 2 (Cleveland-Cliffs’ acquisition, primary aluminum production and more)

• The U.K.’s car manufacturing sector is at a crossroads, explains MetalMiner’s Stuart Burns.
• U.S. steel imports fell by more than half from July to August.
• On Monday, Cleveland-Cliffs’ acquisition of ArcelorMittal USA dominated headlines.
• In other M&A news, Burns weighed in on the merger of automotive giants Fiat Chrysler and PSA.
• Like U.K. automakers, European steelmakers also face challenging economic realities.
• What does the current pandemic and the circumstances it has brought about mean for globalization?
• Primary aluminum production rose on a year-over-year basis in August.
• Circling back to Cleveland-Cliffs, the MetalMiner team broke down the announcement of Cleveland-Cliffs’ acquisition of ArcelorMittal USA, including what it might mean for steel prices.
• A U.S.-based company is entering the Indian renewable energy storage market.
• President Donald Trump this week signed an executive order aimed at boosting the domestic mining industry.
• As India has sent more and more of its metals output abroad, Burns speculated if the country could be headed for resistance in the form of duties.
• As for steel, U.S. steel capacity utilization rate jumped to 66.1% last week.
• Lastly, Hurricane Laura exerted the most significant impact on Gulf of Mexico oil production of any storm since 2008, according to the Energy Information Administration.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

The Chinese aluminum industry has been able to cut costs by essentially selling liquid metal to nearby product manufacturers. Source: Adobe Stock/Kybele.

This morning in metals news: U.S. industrial production picked up in August; Nucor recently released its third-quarter guidance; and the Energy Information Administration broke down the impact of OPEC+’s output reductions.

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U.S. industrial production up 0.4%

U.S. industrial production rose 0.4% in August, according to the Federal Reserve.

Despite the rise, industrial production in August remained down 7.3% compared with the pre-pandemic level in February.

Manufacturing output rose 1.0%. However, the Fed noted gains for most manufacturing sectors have tapered since June.

Nucor releases Q3 guidance

Steelmaker Nucor Corporation said it expects its third-quarter earnings to fall in the range of between $0.50 and $0.55 per diluted share.

Nucor said its downstream products segment is having “another strong quarter due to the continued resiliency of nonresidential construction markets.”

The steelmaker expects earnings for the downstream segment to increase from the second to the third quarters.

“The results of the steel mills segment in the third quarter of 2020 is expected to be similar to the second quarter of 2020,” the firm added.

OPEC+ cuts lead to market rebalancing

According to the Energy Information Administration (EIA), the decision by OPEC+ earlier this year to cut output has produced a rebalanced market.

“EIA estimates that the OPEC+ agreement, along with declines in production elsewhere, including the United States, brought global supply lower than the level of global demand for the first time since mid-2019,” the EIA reported. “Lower supply than demand has resulted in significant global liquid fuels inventory draws since June.”

Furthermore, the EIA expects oil inventories to continue to decline this year year and in most of 2021.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices.

Photo by Jeffrey Sauger for General Motors

This morning in metals news: General Motors announced a partnership with Nikola Corporation; U.S. manufacturing corporations saw their profits plunge in Q2 2020; and Chile’s copper shipments fell in August.

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GM announces partnership with Nikola

General Motors on Monday announced plans to partner with Nikola Corporation, a partnership that would see the Detroit automaker manufacture the Nikola Badger.

“As part of the agreement, Nikola will utilize General Motors’ Ultium battery system and Hydrotec fuel cell technology, representing a key commercialization milestone for General Motors,” GM said in a release.

Manufacturing profits decline

To no one’s surprise, manufacturing profits declined significantly in Q2 2020.

After-tax profits for U.S. manufacturing corporations reached $47.2 billion in Q2, according to the U.S. Census Bureau. The quarterly total marked a decline from the $113.0 billion in Q1 2020 and the $136.3 billion in Q2 2019.

Chile’s copper shipments fall in August

According to Bloomberg, No. 1 copper producer Chile saw a decline in the value of its copper shipments last month.

Per data released by the Chilean government today and cited by Bloomberg, Chile’s copper exports totaled $2.76 billion in August, marking an 11% decline from the previous month.

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The Federal Reserve recently reported U.S. industrial production in June increased by 5.4%, building on the 1.4% increase in May.

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vadiml/Adobe Stock

This morning in metals news: Nevada Copper announced plans to restart its Pumpkin Hollow mine; the American Iron and Steel Institute (AISI) commented on the $1 trillion infrastructure bill approved by the U.S. House of Representatives last week; and a Florida community has approved the sale of land for the construction of a $120 million aluminum can manufacturing plant.

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This morning in metals news, productivity was down for a number of manufacturing industries last year, BHP has executed its first blockchain iron ore trade with China’s Baosteel and copper prices continue to surge.

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Anastasiia Usoltceva/Adobe Stock

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:

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