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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.

In addition, our May 2021 Monthly Metals Index (MMI) PDF is now available for download. The PDF summary includes an executive summary, trends chart and portions of each MMI article (with each page including a link to the full article).

This month’s MMI continued the general theme of rising prices. Copper, for example, reach an all-time high this week. Iron ore and steel skyrocketed, while just about everything else also moved upward.

As for stainless steel, the United Steelworkers union’s ATI strike continues. The MetalMiner team broke down the stainless market recently as part of our monthly webinar series, a video replay of which is available in the MetalMiner video archive.

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

Week of May 10-14 (the copper price, U.S. Steel’s big announcement and much more)

• MetalMiner CEO Lisa Reisman and Vice President of Business Solutions Don Hauser weighed in on U.S. Steel’s cancelation of plans to upgrade its Mon Valley Works operations.
• Century Aluminum reported a 14% jump in sales but a net loss of $140 million in Q1.
• MetalMiner’s Stuart Burns took a look at the silver price and views on where it might go the remainder of this year.
• The gold price recently reached a three-month high.
• Burns on rising cobalt prices this year as electric vehicle demand continues to build.
• US steel capacity utilization fell to 78.1% last week.
• Iron ore prices skyrocketed in Asia this week, prompting Chinese steelmakers to raise their prices.
• The copper price soared to an all-time high this month.
• Aluminum physical delivery premiums have also surged over the past three months.
• Novelis reported net income of $180 million, powered in part by strong aluminum prices.
• Steel prices around the world continue to rise, including an over 10% rise for hot rolled coil.
• MetalMiner contributor Sohrab Darabshaw on Tata Steel’s latest quarterly report.
• Barksdale Resources will acquire 100% of the Sunnyside copper-lead-zinc-silver project.
• The United Steelworkers strike at ATI continued into its seventh week this week.
• Consultancy GlobalData forecasts copper production from the world’s top 10 copper miners could rise by up to 3.8% this year.

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The Stainless Monthly Metals Index (MMI) increased by 7.0% for this month’s reading, as the ATI strike entered its seventh week this week.

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ATI strike continues

In late March, the United Steelworkers union announced a strike at nine Allegheny Technologies Inc. (ATI) facilities. The union cited “unfair labor practices” in its announcement of the strike.

Over six weeks later, the labor stoppage has yet to reach a conclusion.

Meanwhile, late last month, ATI reported its first-quarter financial results. The firm reported a net loss of $7.9 million for the quarter, compared with a net loss of $1.1 billion in Q4 2020.

In Q1 2020, the firm reported net income of $23.6 million.

In its earnings report, the firm expressed “disappointment” in the union’s decision to strike.

“While we are incredibly disappointed that the USW leadership decided to strike our Specialty Rolled Products locations beginning in late March, we remain committed to our business continuity plan to safely operate in a way that allows us to deliver to our customers on our quantity and quality commitments during this strike,” President and CEO Robert S. Wetherbee said. “Our operating teams are committed to minimizing the operational interruption and financial impact from the strike as we seek to reach a fair and equitable settlement with our striking workers.”

Meanwhile, in a bargaining update released Thursday, May 13, the union said it had not heard back from ATI management regarding a proposal it made May 6.

“The issue of profit sharing has been a subject of discussion throughout our negotiations with ATI,” USW said in the statement. “We have shown the company that we are willing to be flexible, but the current offer by ATI eliminates profit sharing and replaces it with 3% wage increases in the 2nd, 3rd and 4th years of the contract. After going without a wage increase since 2014, obviously such an offer is unacceptable.”

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The Raw Steels Monthly Metals Index (MMI) picked up 9.0% for this month’s reading, as steel prices continued ascending this past month.

With volatile steel markets, knowing which strategy to execute and when can make all the difference between saving and losing money. See how MetalMiner looks at different market scenarios.

US steel prices continue to rise

For buyers waiting to see a peak in steel prices: keep waiting.

At least for now, steel prices continue to rise, posting double-digit month-over-month price gains. Price rises took somewhat of a pause from late March into mid-April, but it proved temporary.

The US hot rolled coil price, for example, closed Tuesday at $1,456 per short ton, or up 10.39% from a month ago.

Meanwhile, cold rolled coil reached $1,645 per short ton, or up 8.8%. US hot dipped galvanized rose by 10.69% to $1,770 per short ton.

Iron ore booms in Asia

Similarly, steel prices are also surging in Asia.

That is reflected in a skyrocketing iron ore price, too, MetalMiner’s Stuart Burns explained earlier this week.

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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

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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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The Aluminum Monthly Metals Index (MMI) jumped 7.7% for this month’s reading, as the aluminum physical delivery premium continues to rise.

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Delivery premium continues to rise

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The US Midwest Premium, like just about everything else these days, continued to inch upward in recent weeks.

After falling to $0.12 per pound in early February, the premium has more than doubled since then. The Midwest Premium hit $0.26 per pound ($573 per metric ton) to close last week.

As MetalMiner’s Stuart Burns noted previously, rising delivery premiums are an indicator of market tightness.

“China’s pull on the rest of the world’s aluminium supply does not appear to be abating,” Burns explained last month.

“Beijing has tried to cool speculative activity, which is undoubtedly playing a part in the SHFE price premium.”

In addition, he said elevated premiums are likely to remain a feature of the market the rest of this year.

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The Copper Monthly Metals Index (MMI) surged by 10.6% for this month’s reading, as the copper price has soared to a record high.

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Copper prices reach record highs

Last month, MetalMiner’s Stuart Burns dissected various views on the copper market after prices had retraced from a February peak of around $9,600 per metric ton.

Would the price go up or would it languish? As he noted, banks held differing opinions, with Goldman Sachs being particularly bullish on the red metal.

“JP Morgan is forecasting copper prices to peak at $9,000 per ton this quarter and slide back to $7,865 per metric ton over the second half of the year,” Burns wrote last month. “It argues more plentiful mine supply will take the steam out of the copper market.

“Copper consumers no doubt hope JP Morgan have got it right.

“But as Reuters observes, smelter stocks are low and will take time to replenish. In the meantime, the lack of smelter output in Q2 will leave the market undersupplied in what remains a robust demand environment.”

The answer to the aforementioned question did not take long to materialize.

After previously touching 10-year highs, the copper price has continued to rise and hit record highs this month.

The LME three-month copper price closed Monday at $10,720 per metric ton, up a whopping 19.32% from the previous month.

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This morning in metals news: US steel capacity utilization fell to 78.1% last week; meanwhile, a cyberattack halted operations of a major US pipeline on Friday; and, lastly, US steel prices continue to surge.

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 steel capacity utilization falls to 78.1%

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US steel capacity utilization for the week ending May 8 dipped to 78.1% from 78.7% the previous week, the American Iron and Steel Institute reported.

Production during the week totaled 1,774,000 net tons, or down 0.8% from the previous week.

However, production increased by 45.1% on a year-over-year basis.

Production for the year to date reached 32,089,000 net tons at steel capacity utilization rate of 77.4%. Output is up 5.7% on a year-over-year basis.

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The Renewables Monthly Metals Index (MMI) traded flat for this month’s reading, as cobalt prices have surged so far this year.

(Editor’s note: This report also includes the MMI for grain-oriented electrical steel, or GOES.)

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

Rising cobalt prices

Earlier this month, MetalMiner’s Stuart Burns delved into the rise of electric vehicles. Furthermore, he also zeroed in on rising EV demand’s impact on prices, particularly for critical battery metals like cobalt.

For EV manufacturers, the challenge lies in cobalt supply, cost and ethics. A majority of the world’s cobalt is mined in the Democratic Republic of the Congo, where the documented use of child labor in artisanal mining operations poses significant ethical problems.

“The Financial Times reports that cobalt prices jumped 40% in Q1, laying the blame solely on battery demand,” Burns wrote. “Of all the component metals in EV batteries, cobalt faces the most constrained supply base. A very significant percentage of that cobalt still comes from the Democratic Republic of the Congo.

“Some buyers, such as China’s CATL, have no reservations about investing in countries that face allegations of child labor. The firm recently invested $138 million in an undeveloped copper and cobalt resource in the country.

“Others are voting with their wallets. Those companies are restricting contracts to suppliers in Russia, Australia, Philippines and even, in the case of BMW, from Morocco.”

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The green agenda has lifted prices across the metals sector.

To what extent it has driven physical demand rather than sentiment-driven investor activity — in the form of exchange-traded fund (ETF) buying, stockpiling or exchange position building — is debatable. It’s more of the latter than the former, we would suggest, as the main physical driver for metals remains electrification in transport. As a percentage of the whole, that remains relatively small.

But one important metal in the sector that has yet to see the same support this year is silver.

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Silver price trends

After hitting a low of $24/oz back in early April, the silver price has seen a steady appreciation to just under $27.50/oz today.

However, it has still not hit the artificial eight-year high seen in January, when it reached nearly $30/oz on the back of frenzied retail investors’ demand.

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This morning in metals news: Century Aluminum released its Q1 financial results; meanwhile, copper prices continue to surge; and natural gas production plummeted during what was a frigid February in the US.

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

Century Aluminum releases Q1 financial results

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Century Aluminum reported a Q1 net loss of $140 million, compared with a Q4 2020 net loss of $35.5 million.

“First quarter results were negatively impacted by $87.4 million of exceptional items, in particular $92.7 million of unrealized losses on forward derivative contracts (net of tax),” the firm said.

Meanwhile, the firm reported net sales increased by 14% to $444 million, citing higher aluminum prices and regional premiums.

President and CEO Michael Bless said the firm is committed to developing its “low-carbon aluminum products as well as the expansion of our smelters’ exposure to renewable power resources.”

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