Articles in Category: Metal Fabricated Parts

Our Aluminum MM index rose 3% to 72 during the month of December from 70 in November.

Free Sample Report: Our January Metal Buying Outlook

Is this upward move something to be worried about? Or excited about? We don’t think so.


As soon as prices rise a tick, people try to find the fundamental reason for that price increase. Sometimes they can even, somehow, make the case that the outlook is set to improve. But in the case of aluminum, nothing really improved in December.

Read more

Our raw steels MMI took a much-deserved breath from its long fall in December, rising for the first time since August 2014. The index rose 2% to 47 from 46.

Free Sample Report: Our January Metal Buying Outlook

While it’s certainly progress after a year of falling prices, it’s still important to temper your expectations when it comes to steel.


In December, we had big anti-dumping news. The Department of Commerce announced its preliminary determinations in the investigations of imports of corrosion-resistant steel products from China, India, Italy, and Korea, and Taiwan.

Dumping Duties

China received a preliminary dumping margin of 255.8%. Which could considerably reduce the amount of corrosion-resistant steel imported from China. The size of the duty will likely make these exports unattractive to Chinese producers. Meanwhile, the imports from South Korea, India, Italy and Taiwan all were levied less than 7% duties, which doesn’t seem as if it will be enough to stop these countries from shipping metric tons of automotive and appliance steel to the US going forward.

Finally, Taiwan escaped import duties with preliminary dumping margins of 0%. The effect in corrosion-resistant steels like hot-dipped galvanized is yet unknown and, therefore, something worth monitoring.

Micro Aggressions, Macro Problems

But imports are not the only problem that US mills are facing. Macro factors keep putting pressure on steel prices. In December, oil prices fell to fresh lows, trading near $35 per barrel. Falling oil prices bring down metal production costs and also adds to the bearish sentiment in commodity markets.

Low oil prices have led to an energy sector collapse and domestic steel demand from this sector has fallen significantly. This helps explain the decline in US steel production and capacity utilization. Domestic mills have idled the most capacity since the financial crisis, operating at just 61% in December. Another important consequence of the energy collapse is that inventories held by steel companies are taking a long time to deplete in the face of falling demand, exacerbating the slump in consumption.

Months on hand (MOH) inventories increased to three in December because of the slow shipping rate. Still, many mills are optimistic that they will finish restocking this quarter.

What This Means For Metal Buyers

Although steel prices took a break from their year-long fall in December, there are still many factors weighing down prices. It seems too early to bet on a recovery in prices. For corrosion-resistant steel buyers, the effects of the new import duties are certainly something to watch.

Actual Raw Steel Prices

The US HRC futures contract spot price fell 3% from $376 per short ton to $364/st. US shredded scrap ended at $173 a metric ton, up 4% from $173/mt while Korean scrap steel fell 1%. China slab prices rose 6% to  294 CNY/mt from 278 CNY/mt.

Construction spending fell in November for the first time in nearly 18 months, suggesting the economy ended 2015 with less momentum than previously thought.

Free Sample Report: Our Annual Metal Buying Outlook

Our Construction MMI fell 3.2%, correspondingly, to 60, starting the year with yet another all-time low.


The Institute for Supply Management (ISM) said its index of national factory activity fell to 48.2 from 48.6 in November which is now at its lowest level since June 2009. While a reading below 50 indicates a contraction in manufacturing, the index remains above 43.1, which is associated with a recession.

Chinese Demand is Not Coming Back

Construction activity continues to be stagnant in China as well, the major market that drove the construction boom of the early 2000s. The loss of Chinese demand has hampered component products of our construction index such as rebar and steel plate for more than a year. The Dow Jones Industrial Average, as well as stock indexes around the globe, plummeted Monday after poor purchasing managers index numbers out of China.

Oil prices continued to shoulder some of the blame for low, low prices, but that only tells part of the story. Manufacturers in the petroleum and coal products sector said low oil prices were “negatively” impacting oil and gas exploration activities. Their counterparts in the fabricated metal products segment reported that activity was “still very slow due to oil prices.”

Spending Decreasing?

Construction had been weathering the storm better than some other market indexes as many general contractors and end users were steadily purchasing and consuming metal while the price was low. With construction spending falling for the first time in a year-and-a-half, that might not be the case anymore. We have, anecdotally, heard that stockpiling of commonly used copper, aluminum and steel products — by residential home builders and nonresidential GCs — has been going on for some time.

A dip in purchasing by these large buyers could mean that construction demand in the US is falling, but also that many bulk buyers have simply exhausted warehouse and surplus stock space.

Commerce’s Big Error

Construction spending in November was held down by a 0.8% drop in nonresidential construction. Outlays on residential construction actually rose a modest 0.2%.

In a separate report, though, the Commerce Department said construction spending slipped 0.4%, the first and also biggest drop since June 2014, after a downwardly revised 0.3% gain in October.

The government revised construction data from January 2005 through October 2015 because of a “processing error in the tabulation of data.”

Free Download: Compare with December’s MMI Report

The revisions, which showed construction spending was not as strong as previously reported for much of 2015, prompted economists to lower their fourth-quarter gross domestic product estimates by as much as three-tenths of a percentage point to as low as a 1.1% annual growth pace. So, not only is construction spending now falling, but it’s actually been steadily sliding for all of last year and Commerce’s “processing error” masked the market weakness all that time.

The bottom line is not only is demand still on life support in China, but the US demand that many had assumed was strong for all of 2015 was actually lower than we’d thought and spending is now in negative territory.

Actual Construction Metal Product Prices

Chinese rebar fell increased 1.93% from $290.74 a metric ton in December to $296.38 per mt. Chinese H-beam steel, however, fell from $309.50 per metric ton in December to $299.45 per mt, a 3.2% decrease. The biggest loser was European commercial 1050 sheet aluminum which saw its price fall from $2,557.92 per mt in December to $2,333.20 this month, a whopping 8.8% fall.

Follow Jeff Yoders on twitter at @jyoders19.

Following the financial crisis of 2008/9 there was widespread fear that countries, feeling they were under siege in a post-apocalyptic world, would be fighting for market share and using protectionism to put up the barriers.

Free Sample Report: Our Annual Metal Buying Outlook

In reality, although there was a rise of protectionist action it was muted, particularly considering the dire position in which some countries found themselves. Perversely, it seems that low prices and a slow down in China has done what the financial crisis didn’t. Protectionist action is on the rise and even as economies slowly recover next year expect anti-dumping action across the world to get worse not better.

Protectionism Foils Rusal

Steel and aluminum have hit the headlines most this year, not surprisingly as the volumes are greatest for these major commodities and, arguably, China’s excess capacity is worst in these two metals than any other. But it is not just China that has been the subject of anti-dumping action. Brazil gratefully received news the EU was not persevering with a 17.6% levy on aluminum but UC Rusal is incensed that the European Commission turned a provisional 12.2% duty introduced in July on aluminum foil from Russia into a definitive five-year levy. That duty targets Rusal, the only Russian producer of the aluminum foil covered by the trade protection, according to Bloomberg.


Still it could have been worse, back in July there were reports the EU would impose a 34% duty on Russian foil, as Rusal is the only producer, any duty increase hits the company hard. The foil currently sold by Rusal to Europe is produced by its business units Ural Foil and Sayan Foil but there were suggestions the firm would try to get around the duty by supplying foil from it’s Armenian subsidiary.

Read more

We wrote recently about the rapid inroads (if you will excuse the pun) aluminum has made into the automotive market, particularly for body parts that have been almost the sole domain of steel since before the Model T.

Free Sample Report: Our Annual Metal Buying Outlook

Then we wrote more recently on the fight back being made by steel, spearheaded by the major steelmakers such as ArcelorMittal to develop high-strength alloy steels that can be used in ever thinner gauges without sacrificing rigidity or strength, and the use of hot stamping that reduces spring back and die wear.


Well now it is with some trepidation that we report both aluminum and steel are facing a new kid on the block, the new contender is not even a metal, it’s carbon fiber.

BMW is investing heavily in carbon fiber production research. Source: Adobe Stock/ GordonGrand.

BMW is investing heavily in carbon fiber production research. Source: Adobe Stock/ GordonGrand.

Ahh, but you will say carbon fiber has been around for at least a couple of decades. Goodness, aren’t half the world’s largest airliners made out of the stuff? And isn’t it dreadfully expensive and time consuming to make anything out of it? Read more

David S. Abraham runs the Technology, Rare and Electronics Materials Center and is author of “The Elements of Power: Gadgets, Guns And the Struggle for a Sustainable Future in the Rare Metal Age.” His career spans from commodities trading and Wall Street to the White House where he oversaw international and natural resource programs. He is a frequent speaker on rare metals and technology demands.

Free Sample Report: Our Annual Metal Buying Outlook

A recipient of numerous fellowships, Abraham researched the rare metal trade at Tokyo University, Japan’s Ministry of Economy, Trade and Industry and the Council on Foreign Relations. He also oversaw operations of a clean water non-profit, starting the organization’s operations in Japan and Uganda. He recently wrote in a New York Times Op-Ed that our emerging green energy market could quickly create a shortage of rare metals. Below is a discussion about rare metals, particularly rare earth element production and other issues surrounding the metals that fuel the gadgets and technology we love, with MetalMiner Editor Jeff Yoders.

Jeff Yoders: With your background in rare metals — as a trader, researcher and regulator — you are one of the few people who has an intimate knowledge of all facets or rare metal production, procurement and end use. Was this book the culmination of your career in rare metals?

David Abraham: I think I’ve been dancing around natural resources for much of my career. I’m not an expert in one particular area of the supply chain. The book is a culmination of my work trying to understand many aspects of the entire field. I was in commodities trading, I understand the language there, although I wasn’t in it for my entire career, I was in government. I understand government policy-making, although I’ve only been there for a little while, too. I’ve been able to understand the language and perspectives of many different folks and that helped me understand the flow of these materials better.

The problem with many rare metals is that there is no way to track their origins without known warehouses or chains of custody. Many are traded in handfuls such as this Coltan ore. Source: Adobe Stock/dipling

The problem with many rare metals, is that there is no way to track their origins without known warehouses or chains of custody. Many are traded in backrooms in handfuls, such as this Columbite-tantalum ore. There is little to no transparency of sourcing. Source: Adobe Stock/dipling.

JY: One of our founders, Stuart Burns, came to metals the same way. Stuart used his scientific training and business experience to communicate effectively with engineer and buyer, local politician and corporate manager before he and our other founder, Lisa Reisman, started MetalMiner in 2008. They met while both were trading metals. You were really able to explain the the complexity of the rare metals supply chain that we have known about for a long time.

DA: It’s amazing to me and it’s even more amazing (the complexity of the rare metals supply chain) when you draw it out graphically. I was at a conference a few months back and someone drew out the interplay between China and Japan just on rare earths phosphors, you can’t even put it on one sheet of paper because it spreads everywhere. And that’s just phosphors.

JY: Looking at the chapter you wrote about CBMM and niobium, it shows the full scope of how this mineral is mined in Brazil, refined in Estonia and then used to strengthen steel in many nations. Looking at rare earths, do you believe market-based producers can compete with Chinese mines that are mostly state-run? Such as Bayon Obo, the Chinese iron ore mine you wrote about that has a very profitable rare earths business on the side?

DA: Well, I’ll let the market determine that. What we have seen, though, is that when you have to pay back your debt — when you have to absorb all of the operating costs and capital costs, just to get your minerals out of the ground and to process them — when you’re competing against someone who can do the same thing without a debt overhang, with often lower absorbing those operating and capital costs, and you’re still competing with someone who has lower environmental costs, it becomes really hard to compete, especitally when people only want to spend a 3 to 5% premium for your products.

JY: We have not seen prices rise significantly for rare earths in the last 4 years, yet we have seen demand increase for both rare metals and rare earths. How does that square?

DA: : Abundant supply, has overwhelmed demand.  Eventually, increasing demand will have to cause an increase in prices, but with the illegal materials world — that many of these metals are traded in within China — it’s hard to come by statistics that will tell you when that will be. Moreover, we don’t know where these materials are stockpiled, how much of them are in government warehouses, private warehouses, etc.

Free Download: New! The December MMI Report

JY: After the 2010 incident where China stopped exporting rare earths to Japan, do you believe that China’s use of its near-monopoly on their production is a national security issue? Could Chinese producers simply refuse to export their minerals again? Possibly blocking exports to the US?

DA: When it’s something that has happened in that past, there is always a likelihood that it could repeat itself. The bigger question is, is how vulnerable are our supply chains? There are always ways to get materials from one place to another. In the book I wrote about how the US accessed titanium from Russia during the Cold War, despite non-existent trade relations. So, there are always going to be ways to get specialty materials, but it creates a huge risk when your defense supply line goes through another country. Alternatively, the fact that everyone is interdependent also creates some opportunities for collaboration that reduce the specter of war. You have both things going on at the same time.

JY: It’s such a web, with so many shared and competing interests. It makes it difficult to see the whole picture.

DA: Right. Is it true that US security is undermined because we need resources from countries that we consider competitors? I would say yes, but there are also some positive sides to this situation that aren’t discussed as much. Interdependencies can sow the seeds of cooperation.

We will showcase Part Two of our discussion with David Abraham tomorrow. Follow Jeff Yoders on twitter at @jyoders19.

One of only two US-based grain-oriented electrical steel (GOES) producers recently idled production of the specialty metal, alone with some of its stainless melting and finishing operations. Commodity data from China continues to disappoint.

ATI Idles Stainless Line, GOES Operations Over Low Prices

Allegheny Technologies, Inc. has idled its standard stainless melt shop and sheet finishing operations at its Midland, Pa. facility. ATI also idled its grain-oriented electrical steel (GOES) operations, including its Bagdad, Pa. facility.

Free Sample Report: Our Annual Metal Buying Outlook

ATI said, in a statement, that the future restart of the Midland and GOES operations, respectively, will depend on future business conditions and ATI’s ability to earn an acceptable return on invested capital on products produced at those operations.

Chinese Slowdown Continues in November

China’s output of key industrial commodities, including coal and steel, remained weak in November amid chronic oversupply as slowing construction demand took its toll.

Free Download: The December MMI Report

The world’s second-largest economy has been hit by weak demand at home and abroad, factory overcapacity and challenges posed by its transition to a consumption-led growth model from one reliant on investments

As we entered the final month of 2015, what we’ve known for some time became all but cemented: 2015 will go down as one of the worst years on record for metals producers. Great news for buyers, sure, but was it ever lean to be a producer this year.

Free Sample Report: Our Annual Metal Buying Outlook

Our final MMI report of the year showed another batch of all-time low prices and not a single sub-index showed positive growth. The best any of our metals could do was hold steady. You may remember us saying something similar — all-time low prices and little, if any, upward movement in the sub-indexes — in November, October and September… and June… and March.

Commodities’ Bad Year

How bad is it? The last time raw materials like copper and oil were this cheap, an economic depression loomed. the Bloomberg Commodity Index, which tracks a wide swath of raw materials, plummeted to its weakest level since June 1999.

The last time US oil reserves were this flush with crude was 1972. What’s a major miner to do as raw materials are historically low, too? Well, If you’re Anglo American, this week, you announce you’ll cut jobs, sell mines and retrench. 85,000 Of Anglo American’s 135,000 workers’ jobs are on the line.

There will be less loading of iron at Anglo American mines next year. Source: Adobe Stock/nikitos77.

There will be less loading of iron at Anglo American mines next year. Source: Adobe Stock/nikitos77.

It’s not surprising and no one can really blame Anglo American for finally cutting jobs and production. It’s now more expensive, depending on where it’s mined, to pull iron ore out of the ground than to sell it at these prices. Alcoa‘s move to shut down smelters came from the same economic conditions.

Steel Reels

For steelmakers, it’s the worst downturn in 15 years. US steel shipments were down about 11% through the first nine months of 2015 compared with the year-ago period, according to the American Iron and Steel Institute (AISI). The industry, which employs about 150,000, has announced 12,000 layoffs the past year, the group says.

What’s most disturbing is this downturn is nothing new and it’s been afflicting producers since last year. It would be great to say that the overproduction problem and supply gluts are being curtailed and the shutdowns are having their desired effect.

Except that’s not true. So far, oversupply still exists and producers are still in the same boat. So things could, indeed, get a lot worse in 2016. Umm, Happy New Year?

MM-IndX_TRENDS_Chart_December2015_FNL-TOPVALUE100The December MMI Price Trends Report is out and it’s, well, just what we expected, unfortunately. Prices have plunged this year and last month was no exception with metals such as copper, 9% plummet, and raw steels, fell 4.2%, posting big losses after months of a smaller, more gradual slide.

Free Sample Report: Our Annual Metal Buying Outlook

The finished product sub-indexes are showing how much of a buyers’ market really exists right now. The Construction MMI fell 4.6% as rebar and steel scrap continued to be oversupplied, despite strong demand. For automotive products, the drop was even more precipitous with the Automotive MMI falling 7%. Santa was good to buyers this year.

Thinking 2016 will be better? No signs of that yet. Is it any wonder that a mined mineral, coal, is what everyone hopes they don’t get in their stocking this time of year? Miners and base metal producers are closing smelters, shutting mines and girding up to reduce capacity in 2016. The market, though, is still in a glut for most of the metals we track right now.

So buyers shouldn’t overspend, thinking they’re getting a great deal, this holiday season. The after the holidays sales could be even better.

The narrative flow in the automotive industry has been firmly behind aluminum in the quest for lower weight and better fuel consumption, but steelmakers were never going to stand idly by and see one of their most lucrative markets rapidly eroded even though the speed of the change has caught some of them by surprise.

Free Sample Report: Our Annual Metal Buying Outlook

Brian Aranha, Vice President of Global Automotive at ArcelorMittal is quoted in Automotiveworld saying Ford’s decision to switch a large chunk of the F-150 to aluminum “…was a bad surprise for us, we just didn’t see it coming.”

factory manufacturing

Aluminum might be making inroads, but steelmakers are going to fight to keep their automotive customers. Source: Adobe Stock/AnastasiiaUsoltceva.

Well, whether they saw it coming or not, they are reacting now. Steelmakers the world over are pouring millions into research and development to carve out a role for steel in the car designs of the future.

The Aluminum Challenge

They have much to fear, in an executive summary to a report by Ducker Worldwide last year called DriveAluminum highlight is made to the rapid gains made by the light metal.

Source Ducker Worldwide

Source: Ducker Worldwide

Although the F-150 leads the class with 1,080 lbs. of aluminum, the pickup truck segment has embraced weight reduction more than any other. The average content will be 548.9 lbs per vehicle almost the same as E segment sedans at 549.9 lbs. and SUVs close behind at 410.3 lbs.

Read more

1 2 3 4 5 25