Before we head into the weekend, let’s take a look back at the week that was and the metals storylines here on MetalMiner:

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Week of Nov. 29-Dec. 3 (hot rolled coil prices, Alcoa announces smelter restart and more)

• Christopher Rivituso on a drop in European hot rolled coil prices.
• General Motors recently announced it bought a 25% stake in Pure Watercraft, a Seattle-based firm that focuses on “all-electric boating solutions.”
• Almost two years after its nickel ore export ban went into effect, Indonesia’s president indicated the country could impose nickel and copper concentrate export bans.
• Alcoa said the joint venture Portland Aluminium smelter in Australia will restart after having remained idle since 2009.
• The U.S. steel capacity utilization rate for the week ending Nov. 27 fell to 83.2%.
• The CEO of Chilean copper giant Codelco said copper prices could dip next year.
• Meanwhile, oil prices lost significant ground this week, with Brent crude dipping below $70 per barrel at points.
• Lastly, Russian steel group NLMK is boosting capacity at its Mill 1000 hot rolling facility.

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This morning in metals news: tin prices have surged; Norsk Hydro announced the end of a previously announced battery initiative; and, lastly, Cleveland-Cliffs is buying a ferrous scrap processor.

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Tin prices gain

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As we noted earlier this week, news that Indonesia is considering a tin export ban is offering some support to tin prices.

LME three-month tin reached $39,250 per metric ton this week, up 7.2% month over month, according to MetalMiner Insights data.

Meanwhile, from a technical perspective, LME tin trading volumes reached a November peak of 7,138 on Nov. 16. Volumes fell as low as 2,538 later in the month before bouncing back up.

Subscribers can find more tin insights in this month’s Monthly Metal Outlook report.

Norsk Hydro announces end to battery initiative

Earlier this year, Norsk Hydro announced plans to extend its joint battery initiative with Panasonic and energy firm Equinor.

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Chilean copper producer Codelco, the world’s largest, indicated it could see copper prices coming down in 2022.

According to a Reuters report, Codelco CEO Octavio Araneda said prices in 2022 will likely come in slightly lower than in 2021.

As we’ve noted recently, MetalMiner is hosting its final webinar of the year on Wednesday, Dec. 8, during which the MetalMiner team will overview price predictions for metals in 2022. Those interested in participating in the session can sign up on the MetalMiner Events page.

Copper prices stabilize

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Like aluminum, LME copper prices on the LME surged to $10,270 per metric ton in late October, according to MetalMiner Insights data.

The price fell back to close the month, however, closing October at $9,490 per metric ton.

Since then, the copper price has trended sideways.

From a technical perspective, LME copper trading volumes reached a November high of 145,635 as of Nov. 2. Volumes fell as low as 69,991 on Nov. 25, during which prices surged briefly and approached MetalMiner resistance levels.

However, the stronger the trading volume, the greater the significance of a corresponding price movement (and vice versa). As such, after jumping to just under $9,900 per metric ton Nov. 25, the price retreated.

LME three-month copper closed the month at $9,510 per metric ton.

Political crossroads

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Recently, MetalMiner’s Stuart Burns delved into the aluminum market deficit, one in which limited aluminum supply and elevated delivery premiums have been persistent features.

However, perhaps to some aluminum buyers’ relief, some supply is coming back online next year.

Each month, MetalMiner hosts a webinar on a specific metals topic. Sign up for the last session of the year, scheduled for Wednesday Dec. 8, during which the MetalMiner team will discuss price predictions for 2022. 

Alcoa to restart idled smelter

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Alcoa Corporation earlier this month announced plans to restart an aluminum smelter that had sat idle since 2009.

The firm said it will restart the joint venture Portland Aluminium smelter in Australia, which has a total annual capacity of 358,000 metric tons per year.

However, Alcoa said it plans to restart 35,000 metric tons of capacity.

“Portland Aluminium is an unincorporated joint venture with 358,000 mtpy of total capacity, and Alcoa Corporation has 197,000 mtpy of consolidated capacity,” Alcoa said. “Once the restart is complete, Portland Aluminium will operate at approximately 95 percent of total capacity and Alcoa Corporation will have approximately 186,000 mtpy of its consolidated capacity at Portland operating.”

Renewed production at the Australian smelter is slated to begin in Q3 2022.

In September, Alcoa announced plans to restart its Alumar aluminum smelter in Brazil. The smelter, which has annual capacity of 268,000 metric tons per year, has been idle since 2015.

Midwest premium eases

As Stuart Burns has explained throughout the year, rising aluminum premiums reflect market tightness.

“The aluminum market is undeniably tight, as consumers are having to wait months for metal and the Midwest Premium rises,” Burns wrote back in March. “In some locations — Europe, in particular —  consumers of rolled plate cannot secure new production space until well into Q3.

“Some mills have even pulled out of quoting for new business customers in 2021. Anti-dumping legislation on flat rolled products from China and a fire last year at a Russian rolling mill have combined dramatically restrict supply options for consumers.”

Fast forward to Q4, and inventories in LME depots have continued to dwindle, Burns explained while also covering the background of the post-financial crisis aluminum market and the history of the so-called “stock and finance” trade and the shadowy world of off-warrant stocks.

However, the Midwest aluminum premium has lost some steam over the last couple of months. according to MetalMiner Insights data.

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This morning in metals news: General Motors announced it had purchased a stake in Pure Watercraft, a firm specializing in “all-electric boating solutions”; aluminum prices ticked up ahead of Thanksgiving; and, lastly, Thyssenkrupp commissioned its 35th EnviNOx^® system, which reduces nitrous oxide emissions.

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.

GM buys stake in electric watercraft firm

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When it comes to the automotive space and electrification, we typically focus on EVs that operate on land.

However, automaker General Motors recently announced it had purchased a stake in Pure Watercraft, which produces all-electric boating solutions. GM purchased a 25% stake in the Seattle-based firm.

“The collaboration between GM and Pure Watercraft advances a shared vision to promote sustainability through an expansion of zero-emissions mobility for future generations and reflects the holistic approach necessary for widespread EV adoption,” GM said.

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Lower auto sales in Europe have put West European hot rolled coil prices under pressure. However, demand from construction is nonetheless helping to support prices for the flat-rolled product.

“People want to invest their money into something,” one trader source told MetalMiner.

We’re offering timely emails with exclusive analyst commentary and some best practice advice. 

Hot rolled coil prices slide

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ArcelorMittal had originally sought €1,080 ($1,210) in November. While that price remains the Luxembourg group’s official one, transactions have taken place at lower levels.

Large-volume transactions have occurred in November at €980-1,000 ($1,095-1,120) per metric ton exw for delivery in January, the trader said.

Transactions for smaller volumes €1,050 ($1,175), the trader added.

Imports from Russia and Turkey have transacted at an average of about €865 ($970) per ton cfr Europe, the trader noted.

Auto registrations slow

New automobile registrations in the European Union totaled 665,000 units for October. That marked a drop of more than 30% year over year from 950,000 units, the European Automobile Manufacturers Association (ACEA) said Nov. 18.

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While you may be busy putting the finishing touches on your Thanksgiving spread and, subsequently, taking a turkey-induced nap, you might find some time to revisit this week’s coverage, including oil prices, global crude steel production and much more.

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But first, in case you missed it, MetalMiner is hosting its final monthly webinar of the year at 10:00 a.m. CDT, Wednesday, Dec. 8. Metal buying organizations will not want to miss it, as the MetalMiner team will delve into price predictions for 2022. For more information about the webinar and to sign up, those interested should visit the MetalMiner Events page.

Elsewhere, MetalMiner also recently launched a suite of precious metals within the MetalMiner Insights platform. In addition to gold and silver, the suite includes platinum and palladium (of particular relevance to the automotive sector), plus rhodium, iridium and ruthenium.

Without further ado, here’s a recap of this week’s coverage:

• Ford Motor Co. and GlobalFoundries announced a partnership to work on semiconductor technology and boost supply for the automaker.
• Nucor Corporation will add a blast and prime line to its under-construction plate mill in Brandenburg, Kentucky.
• Global copper mine production increased by 3.3% during the first eight months of the year, the International Copper Study Group reported.
• The U.S. is facing a stainless steel shortage, a guest post this week warns.
• Aluminum inventories are moving toward zero, Stuart Burns explained.
• Norsk Hydro said it will begin construction on a new Michigan recycling plant in Q2 2022.
• Global crude steel production took a big step down in October, World Steel Association data indicate.
• According to a second estimate from the Bureau of Economic Analysis, U.S. real GDP increased by 2.1 in Q3 2021.
• President Joe Biden announced the Department of Energy will release 50 million barrels of oil from strategic reserves.

We’re off today and tomorrow but will resume regular coverage Monday.

But for now, we wish you a Happy Thanksgiving, MetalMiner readers!

Yesterday, MetalMiner’s Stuart Burns touched on the aluminum market and plummeting inventories, a trend in stark contrast to former times of plenty.

Meanwhile, in the steel market, global crude steel production totaled 145.7 million metric tons in October, the World Steel Association reported.

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

Steel production slides

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The October steel total marked a decline of 10.6% on a year-over-year basis. Meanwhile, output increased by 0.4% compared with the previous month.

In China, the world’s top steel producer, output peaked this year at 99.5 million tons in May. Since then, China’s output has declined each month, according to the World Steel Association.

The country’s October steel production totaled 71.6 million tons, down from 73.8 million tons in September.

The pace of GDP growth in China slowed to 4.9% in Q3, according to National Bureau of Statistics data. GDP had increased by 7.9% year over year in Q2 2021.

For the year to date, China’s output of 877.1 million tons marks a year-over-year decline of 0.7%.

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Longtime readers of MetalMiner may recall a number of aluminum posts we have put out over the years since the financial crisis that explore shadow stocks or the “stock and finance trade” inventory that have referred to the murky world of “off-warrant,” or non-exchange, reserves of aluminum. Those reserves are often hard to determine in terms of location, volume or ownership.

They have remained an enduring feature of the global aluminum market. The market’s perception of their size and the possibility of their delivery back into circulation have been persistent influences on the market price.

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

Aluminum after the financial crisis

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The stock grew in the immediate aftermath of the 2008 financial crisis, as the world went into a form of financial lockdown. All manner of downstream activities from automotive to household goods stopped consuming aluminum.

Recovery took many months, indeed stretched in 2010 before Chinese stimulus measures rippled out into the world, stimulating demand and facilitating a return to strong growth.

But primary aluminum mills — partially protected by power and alumina supply contracts linked to the ingot price and mindful of the huge cost to capital of shutting down major smelters — kept churning out the metal.

Stock and finance

Seeing an opportunity, traders and banks piled into the market.

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(Editor’s note: The following is a guest post from C.J. Nord, C.P.M., CSCP, founder of the nonprofit Supply Chains for Good, and Harry Moser, founder and president of the Reshoring Initiative.)

Don’t hold out hope for the U.S.’s stainless steel shortage to get better until you know of new supply coming online.

There appear to be no plans in the works to increase domestic production. Supply may tighten even more than we have seen. This is similar in scale to the chip shortage.

Stainless steel shortage factors

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Like almost all factory shortages, multiple factors have led to the stainless steel shortage.

The shortage became a national concern in January 2021, when ATI Metals took 304 stainless offline and shifted production to 316 grade.

The news of that change didn’t make it downstream. Our nation is still underinformed about the shortage of this type of steel. Stainless is critical for multiple applications in a broad range of industries.

The ATI change took roughly 30% of our nation’s supply offline. Furthermore, only about 10% has come back online (these are rough numbers based on our surveys of users and distributors).

If a mill decides to bring 304 online, it could take as much as a year for supply to reach the distributor level.

This is a long-term, painful shortage.

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