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The United Steelworkers union Monday announced a strike at nine Allegheny Technologies Inc. (ATI) facilities, citing what it calls “unfair labor practices.”

The ATI strike, which began at 7 a.m. EDT Monday, marked the first at ATI since 1994, according to media reports.

• Pennsylvania in Brackenridge, Latrobe, Natrona Heights, Vandergrift and Washington
• Lockport, New York
• Louisville, Ohio
• New Bedford, Massachusetts
• Waterbury, Connecticut

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USW announces ATI strike

“We are willing to meet with management all day, every day, but ATI needs to engage with us to resolve the outstanding issues,” USW International Vice President David McCall said in a prepared statement. “We will continue to bargain in good faith, and we strongly urge ATI to do start doing the same.

“Through generations of hard work and dedication, Steelworkers at ATI have earned and deserve the security of a union contract. We cannot allow the company to use the global pandemic as an excuse to reverse decades of collective bargaining progress.”

USW said negotiations with ATI began in January 2021. The union claimed the company “sought major economic and contract language concessions” from its roughly 1,300 union members. Furthermore, the union said members have not had a wage increase since 2014.

Meanwhile, the union had announced its intention to strike Friday, March 26.

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This morning in metals news: workers went on strike at the Bradken plant in Atchison, Kansas, last week; Liberty Steel has asked for a massive government bailout in the UK; and, lastly, the copper price retraced 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.

Workers go on strike at Bradken plant

Workers at the Bradken steel manufacturing plant in Atchison, Kansas, went on strike last week, local news source KQ2 reported.

According to the report, 50-60 workers walked off the job and onto the picket line last week.

The plant uses electric arc AOD technology and has annual capacity of 36,500 tons, according to the company’s website. The plant produces: locomotive rail and transit components and assemblies; mining, construction, industrial and military castings; and general steel castings.

Liberty Steel asks for bailout

On the heels of its financial crisis after the collapse of Greensill Capital, Liberty Steel is looking to the UK government for a bailout.

The steelmaker is asking for a bailout package of £170 million, the BBC reported.

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US steel imports in February — and through the first two months of the year — are down compared with 2020, the Census Bureau reported.

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US steel imports in February down 22% from previous month

US steel imports reached 1.71 million metric tons in February, according to preliminary data from the Census Bureau.

Imports fell from 2.20 million metric tons in January.

Meanwhile, February 2021 imports were up from the 1.37 million metric tons imported in February 2020.

Furthermore, imports were down over 7% in the year to date compared with the first two months of 2020.

According to the American Iron and Steel Institute (AISI), finished steel import market share reached an estimated 18% in February. Meanwhile, through the first two months of the year, import market share reached 17%.

In addition, after reaching 35% in 2017, steel import penetration fell to 26% by 2019, according to the Economic Policy Institute.

Tin plate, cold rolled sheet imports surge

February saw a surge in imports of tin plate and cold rolled sheets, among other steel products.

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Before we head into the weekend, let’s take a look back at the week that was and the metals storylines here on MetalMiner, including coverage of the semiconductor shortage, the Midwest Premium and more.

A fire at a Japanese chip-making plant last week has slammed automotive operations. General Motors, Ford and many other automakers have announced idling of production as a result of the shortage.

Meanwhile, on the supply side, Intel announced plans to invest $20 billion to build two new Arizona plants. Furthermore, Intel said it aims to “serve the incredible global demand for semiconductor manufacturing.”

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 March 22-26 (semiconductor shortage, Midwest Premium and more)

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• Hot rolled coil prices in Western Europe have continued to rise, Christopher Rivituso explained earlier this week.
• The semiconductor shortage has impacted the automotive sector, leading to a number of manufacturers idling production.
• Sticking with the automotive market, Europe’s automotive sector continues its electrification drive, MetalMiner’s Stuart Burns explained.
• Burns on China’s aluminum sector and what efforts to curb pollution could mean for the aluminum market.
• British Steel recently announced its first delivery of rails to Europe under new owner Jingye Group.
• Sohrab Darabshaw on the Chinese steelmaking hub of Tangshan and what efforts to curb pollution could mean for steel, iron ore and more.
• US steel capacity utilization dipped to 77.3% last week, according to the American Iron and Steel Institute.
• The US’s adoption of battery energy storage will continue to rise, the Energy Information Administration reported.
• After a heavily disrupted first half of the year, global copper mine production in 2020 ultimately finished unchanged relative to 2019 production.
• In a webinar earlier this week, MetalMiner experts overviewed market conditions and buying strategies for what is currently a bullish commodities market.
• U.S. Steel recently unveiled what it called a new sustainable steel product line dubbed verdeX™.
• The rising Midwest Premium reflects an exceedingly tight US aluminum market.
• According to the Economic Policy Institute, the former Trump administration’s Section 232 tariffs on steel and aluminum produced “near-immediate benefits.”
• Lastly, circling back to the semiconductor shortage, Ford said it will temporarily idle production of the F-150 at its Dearborn, Michigan plant.

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Three years have passed since former President Donald Trump imposed Section 232 tariffs on steel and aluminum.

The administration cited national security concerns when imposing the tariffs. In addition, it aimed to raise capacity utilization of the US steel and aluminum sectors. (For the week ending March 20, US mills reached a steel capacity utilization rate of 77.3%.)

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Some countries received exemptions and domestic buyers have been able to win exclusions, which have mitigated the strength of the tariffs.

Metals consumers have expressed their opposition to the tariffs. For example, the Coalition of American Metal Manufacturers and Users (CAMMU) called for an end to the tariffs last year, citing the negative economic impact of the COVID-19 pandemic.

However, a recent review of the tariffs offered a more positive view.

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

EPI: Section 232 tariffs produced ‘near-immediate benefits’

According to a recent report this week by the Economic Policy Institute (EPI), the Section 232 tariffs offered “near-immediate benefits.”

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

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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 to dramatically restrict supply options for consumers.

As a result, prices have moved up.

Are you on the hook for communicating the company’s aluminum performance to the executive team? See what should be in that report. 

US aluminum situation

The US is no better.

Semi-finished product prices are rising and lead times are extending. It is convenient to blame the recent decision to apply substantial anti-dumping duties on 18 countries supplying the US with flat rolled commercial aluminium. The move has severely distorted the supply market. A significant number of major supplying countries, including Germany, South Korea and Turkey, are shut out by the high tariffs.

However, the tariffs are not the only reason the market is tight.

As intended, the supply chain has now switched focus to domestic — or, at least, USMCA members’ North American mills. The result is lengthening lead times and price rises.

Some consumers have asked why the LME primary metal price hasn’t risen further in view of the tight market. The reality is what we are seeing is a distorted supply market, not a global primary metal shortage.

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Industrial metal buying organizations are in a difficult spot these days, as commodities are entrenched in a bull market.

After the initial demand hit that commodities took on at the end of Q1 2020 with the outset of the COVID-19 pandemic, materials prices have skyrocketed. Lead times have lengthened and demand for everything from automobiles to homes to electronics picked up around the middle of the year.

Since then, metals prices have been on a bullish run, putting pressure on buying organizations.

On Wednesday, March 24, MetalMiner hosted a webinar titled “When Will the Metals Bull Market End? (Am I Well Positioned to Get All of the Cost-Downs When Prices Fall?).” During the 30-minute session, MetalMiner CEO Lisa Reisman, Editor-at-large Stuart Burns and Vice President of Business Solutions Don Hauser walked buyers through the current state of commodities markets and strategies for how buyers should approach their metals spend in preparation for when prices eventually come down.

Want more from MetalMiner? We offer exclusive analyst commentary in our weekly updates – all metals, no sales fluff. 

Bull market

To metals buyers’ chagrin, prices remain elevated and supply is tight.

When polled, 44% of webinar participants said carbon steel has been their most budget-busting metal this calendar year. Meanwhile, 24% said stainless steel, 20% said aluminum and 12% said copper.

In addition, 66% of participants indicated they are also seeing price increases for value-add items (for example, coatings, gauge and width adders, and additional processing).

US steel prices, for example, have been relentless in their rise. Hot rolled coil closed earlier this week at $1,271 per short ton, up nearly 9% from a month ago. After a modest recovery in May 2020, hot rolled coil dipped again, falling as low as $454 per short ton in late August.

The price has come a long way since then.

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Despite significant drops in output earlier in 2020 at the outset of the COVID-19 pandemic, global copper mine production last year came in unchanged compared with the previous year.

According to the International Copper Study Group, the global copper market posted an apparent deficit of 560,000 tons in 2020.

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ICSG: copper mine production flat in 2020

Copper mine production around the world took a dive in the first half of 2020, as the pandemic disrupted operations and metals demand patterns. Mine output dropped by 3.5% year over year in April-May 2020.

However, the second-half recovery, paced by China, saw production break even for the year.

Peru, the second-largest producer, saw mine production fall 12.5% in 2020. Top producer Chile, meanwhile, saw its output drop just 1%.

Elsewhere, after the transition of two mines to different ore zones, Indonesian output rose by 39%.

“COVID-19 related constraints and other operational issues also resulted in declines in production in other major copper mine producing countries, most notably Australia, Mexico and the United States,” the ICSG added.

Refined production up 1.5%

However, refined copper production rose by 1.5% year over year in 2020.

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The US steel sector’s capacity utilization rate has consistently posted gains since a trough last spring at the outset of the COVID-19 pandemic.

This past week, however, the capacity utilization rate fell slightly.

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Capacity utilization dips to 77.3%

The US steel sector’s capacity utilization rate fell to 77.3% for the week ending March 20, the American Iron and Steel Institute reported this week.

Steel output during the week totaled 1.75 million net tons. The figure marked an increase of 0.7% year over year. Meanwhile, output declined 0.5% from the previous week, when capacity utilization reached 77.7%.

As for the year to date, production reached 19.6 million net tons. Capacity utilization during the period reached 76.8%. Production during the period fell 6.2% from the same time frame in 2020, when the rate reached 79.6%.

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The recent curbs on steel making by the local government in one of China’s largest steel-producing cities, Tangshan, may have a cascading effect on steel procurement & demand, as well on iron ore supplies, some experts believe.

The Tangshan restrictions are in effect from March 20 to Dec. 31, 2021. Among other things, the restrictions penalize steel mills there that fail to meet emission control regulations.

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Tangshan part of countrywide effort

The curbs are in line with China’s fresh efforts to cut emissions meet carbon-neutrality targets. China aims to reach carbon neutrality by 2060.

Already, iron ore prices felt effects from the restrictions. Meanwhile, the long-term effect on the import-export of steel from China remains to be seen.

Daily iron ore consumption in Tangshan is also likely to drop drastically. The restrictions had led to the drop in iron ore futures but boosted hot-rolled coil (HRC) futures.

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