Continuing our rundown of the best of 2020, let’s take a look back at the year that was for copper.
Like other metals, copper suffered an early-year swoon.
The LME three-month copper price fell to just over $4,600 per metric ton in late March, as nations around the world began to battle the early stages of the coronavirus pandemic.
Since then, copper has bounced back, in large part powered by Chinese demand.
Just before Christmas, the price surged to a 2020 high of $7,914 per metric ton. The price marked its highest since Q1 2013.
Meanwhile, as we look ahead, copper is likely to remain in high demand, with growing application from the renewables sector (including wind and solar). As nations around the world continue to advance green initiatives — albeit of varying degrees of ambition — the demand for copper will certainly be there.
“Sustained growth in copper demand is expected to continue as copper is essential to economic activity and even more so to the modern technological society,” the International Copper Study Group said in its copper market forecast for 2020-2021. “Infrastructure development in major countries such as China and India and the global trend towards cleaner energy will continue to support copper demand.”
Furthermore, the ICSG forecast global apparent usage of refined copper will rise by 1.1% in 2021.
So, without further ado, let’s take a look at the most-viewed copper-centric posts of the year on MetalMiner.
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This morning in metals news: MetalMiner’s Maria Rosa Gobitz recaps movements in December metals prices; Steel Dynamics released its Q4 earnings guidance; and, finally, the United States International Trade Commission launched a Section 337 investigation relating to vehicle control systems.
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Recapping December 2020 metals prices
MetalMiner’s Maria Rosa Gobitz recapped the last two weeks in metals and oil as the year draws to a close.
“The U.S. oil market traded up over the past two weeks,” Gobitz explains. “The WTI oil price closed Thursday at $48.23/barrel, up from $46.57/barrel two weeks ago. According to the Energy Information Administration, U.S. crude oil inventories were at 499.5 million barrels by the week ending Dec. 18, an decrease of 0.7% from 503.2 million barrels compared to two weeks prior. Even though inventories increased this fortnight, they are still up about 11% from the five-year average for this time of year.”
Gobitz rounded up the world of metals over the last two weeks in bullet form:
Over the last two weeks, the Thomson Reuters/CoreCommodity CRB increased to 165.55 from 161.25. The oil price rose by 3.6% over the same period.
Prices for almost all steel forms increased during the past two weeks. U.S. HRC steel prices continued to increase. By Dec. 25, the price reached $917/st, up 12.4% over the past two weeks. Similarly, the CRC and HDG prices increased by 5.8% and 6.1%, respectively, over the past two weeks to $1,022/st and $1,141/st. The plate price increased by 12.3% to $812/st.
However, wire rod prices remained flat over the past two weeks at $29.39/cwt. Capacity utilization for the week ending Dec. 11 reached 73.2%, up from 71.4% for the week ending Dec. 5.
The dollar index closed at 90.41 on Dec. 23, slightly down from 90.98 on Dec. 11. The dollar reached its lowest point — 89.82 — in the year to date Dec. 17.
Aluminum prices traded sideways. The price closed last week at $2,025/mt (down from $2,034/mt).
The LME three-month copper price increased slightly by 0.7% over the past two weeks, closing last week at $7,811.5/mt.
In the past two weeks, nickel prices breached the resistance level of $17,230/mt but later retraced. The LME three-month nickel price closed last week at $17,013/mt, down from $17,254/mt two weeks prior.
Meanwhile, the tin price closed last week at $20,100/mt, up from $19,505/mt two weeks prior.
Lastly, the zinc price traded sideways over the past two weeks, closing at $2,845/mt from $2,838/mt on Dec. 11.
Steel prices
“Steel prices remain strong as they continued to increase over the last two weeks (as they have since mid-August),” Gobitz added. “We also saw capacity utilization increase as mills extend their lead times. All base metals traded sideways over the past two weeks. Markets seem to have slowed down ahead of the holidays. However, buying organizations should continue to pay close attention to prices.”
Steel Dynamics announces Q4 earnings guidance
Meanwhile, Steel Dynamics announced Q4 earnings guidance, calling for adjusted earnings of between $0.80 and $0.84 per diluted share.
By comparison, Q3 adjusted earnings reached $0.51 per diluted share.
USITC launches Section 337 investigation
The USITC has invoked Section 337 of the Trade Act of 1930 to investigate imports of “certain vehicle control systems, vehicles containing the same, and components thereof.”
“Unfair import (a.k.a., Section 337) investigations conducted by the U.S. International Trade Commission most often involve claims regarding intellectual property rights, including allegations of patent infringement and trademark infringement by imported goods,” The UISTC explains on its website regarding the scope of Section 337.
In November, Jaguar Land Rover Limited (of Coventry, United Kingdom), and Jaguar Land Rover North America, LLC (of Mahwah, New Jersey), filed a complaint alleging violation of Section 337. The complaint alleges unfair importation of “certain vehicle control systems, vehicles containing the same, and components thereof” that infringes a patent.
In addition, respondents in the investigation are:
Dr. Ing. h.c.F. Porsche AG, d/b/a Porsche AG, of Stuttgart, Germany
Porsche Cars North America, Inc., of Atlanta, GA
Automobili Lamborghini S.p.A. of Sant’Agata Bolognese, Italy
Automobili Lamborghini America, LLC, of Herndon, VA
Volkswagen AG of Wolfsburg, Germany
Volkswagen Group of America, Inc., of Herndon, VA
Audi AG of Ingolstadt, Germany
Audi of America, LLC, of Herndon, VA.
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Today, we’ll take a look at aluminum, which has also been on the rise in the second half of the year. The LME three-month price bottomed out at $1,460 per metric ton in April. Since then, however, the price has surged, reaching as high as $2,062 per metric ton in early December.
Like steel, prices have continued to rise. Will that trend continue in 2020? That remains to be seen, of course. However, as MetalMiner’s Stuart Burns outlined in October, Goldman Sachs is bullish on commodities in 2021.
Before we turn the page, let’s first take a look back at the best of 2020.
MetalMiner should-cost models: Give your organization levers to pull for more price transparency from service centers, producers and part suppliers. Explore the models now./em>
Continuing our look back at the best of 2020, today we’ll take one last review of the top steel posts of the year here on MetalMiner.
As with metals as a whole, steel prices experienced a rocky 2020.
The coronavirus pandemic slammed metals demand overall, including steel demand. The automotive industry idled production at the end of Q1 and into Q2, severely denting demand.
However, eventually automakers restarted lines and demand returned. As the year has progressed, steel prices have continued to rise and show no signs of slowing down in the near term. The U.S. HRC price, for example, is up a whopping 28.61% over the last month.
With that, let’s take a look back at the most-viewed steel stories of the year.
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.
This morning in metals news: U.S. Steel sold the Keystone Industrial Port Complex for $160 million; ArcelorMittal and Nippon Steel will build a new electric arc furnace at their joint venture in Alabama; and, finally, the aluminum price has retraced slightly in December.
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.
U.S. Steel sells Keystone Industrial Port Complex
U.S. Steel recently announced it has closed on the sale of its Keystone Port Industrial Complex in Fairness Hills, Pennsylvania.
The sales of the “non-core real estate asset” comes for $160 million.
The steelmaker it expects production to begin in the first half of 2023.
The Calvert facility is a 50:50 joint venture of the two firms.
“Calvert currently produces steel sheet products by processing semi-finished products (slabs) procured from domestic and overseas suppliers,” Nippon Steel said in a Dec. 22 announcement. “With the newly-built EAF, Calvert will be able to manufacture by itself part of slabs necessary to produce its steel sheet products and will strive for further strengthening its competitiveness through advantages of the self-manufacture, such as shortening lead time in slab procurement, improving its productivity through utilization of self-manufactured high temperature slabs, and increasing the domestic procurement ratio of slabs.”
Aluminum pulls back
Like many metals, aluminum has been on a steady rise since May.
However, in December, aluminum has pulled back a little bit.
The LME three-month aluminum price remains up 2.2% month over month after closing last week at $2,025 per metric ton. Meanwhile, the metal started the month just north of $2,060 per metric ton.
Global copper mine production slipped by 1% during the first nine months of 2020. On the other hand, the fall is well below the 3.5% drop recorded during the months of April and May, when the first wave of coronavirus infections hit many parts of the world.
Meanwhile, copper concentrate production fell 0.8%, while solvent extraction-electrowinning dropped by 1.5%.
No. 2 copper producer Peru saw its output fall 16.5% during the first nine months of the year. Although the reduction dropped to 2% in July, ICSG noted, Peru’s copper mine production in August and September fell 12.5% year over year.
Top copper producer Chile, meanwhile, saw its copper production rise in the first half of the year by 2.5%.
Like Peru, however, Chile’s production slipped in Q3. Chile’s Q3 copper mine production fell by 3.7%, the ICSG reported.
There has been quite a bit of analyst chatter about the likely impact of China’s return to the steel scrap market next year.
In 2019, the authorities essentially banned steel scrap imports. The move came, in part, because many of the grades were classified as waste. However, of late the rumor is China will be moving to reclassify ferrous scrap as a recyclable resource and could lift the import ban (probably in Q1 2021).
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.
Steel scrap imports plunge
According to Platts, China has 184 million tons of EAF steelmaking capacity at the end of 2020. Furthermore, the country will likely have 197 million tons by end of 2021.
The totals are up from 175 million ton at the end of 2019, when scrap imports had plunged to just 180,000 tons due to the ban.
Domestic steel scrap production has been on the rise, generating some 240 million tons in 2019. As such, the 2014-18 average annual imports figure can be seen as minuscule by comparison.
But while they may be small, they are not insignificant.
Normally, imports rise and fall relative to the premium arbitrage of domestic prices over world prices. Currently, domestic steel scrap prices in China are said to be about $60/mt or Yuan 400/mt over Southeast Asian seaborne scrap prices on like-for-like grades (when freight and taxes are included).
Should imports be relaxed, there is, therefore, the potential to suck in considerable imports.
Platts suggests this would not top the record 13.7 million tons imported in 2009. Some, however, disagree, saying it could reach 20 million tons.
Before we head into the penultimate weekend of 2020, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner, including: research findings related to organic molecules’ impact on machinability; gold prices; and the arrival of an allocation market for steel-buying organizations, as explained by MetalMiner CEO Lisa Reisman:
Week of Dec. 14-18 (machinability, gold prices and steel allocation market)
Stuart Burns delved into the gold price and what 2021 may hold for the precious metal.
The European Raw Materials Alliance recently launched the Rare Earth Magnets and Motors Cluster, aimed at developing solutions to strengthen supply chains.
Earlier this month, MetalMiner released the December update to its Annual Outlook originally published in September.
Rio Tintoannounced a $10 million investment toward its joint research with Chinese steelmaking behemoth Baowu Steel Group on greener steelmaking processes.
We touched earlier on Nippon Steel’s efforts to augment exports. Meanwhile, Christopher Rivituso on Severstal’s intention to look to export more large-diameter pipe to the North American market.
Lastly, a research team from Purdue University, Osaka University and the Indian Institute of Science published findings on the impact of organic molecules on machinability of metals.
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.
This morning in metals news: Rio Tinto has committed $10 million toward its research partnership with China’s Baowu Steel Group; meanwhile, Freeport McMoRan completed the sale of an undeveloped project in the Democratic Republic of the Congo; and, lastly, copper remains at an over seven-year high.
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.
Rio Tinto commits $10M investment toward low-carbon steelmaking research
Miner Rio Tinto has announced a commitment of $10 million toward its low-carbon steelmaking research partnership with Chinese steelmaking giant Baowu Steel Group.
“Rio Tinto’s investment will fund the joint establishment of a Low Carbon Raw Materials Preparation R&D Centre, which will initially prioritise the development of lower carbon ore preparation processes,” Rio Tinto said in a release Wednesday. “This will include creating two ore preparation pilot plants, one to use biomass and the other exploring using microwave technology. The investment will also support work on carbon dioxide utilisation and conversion at the China Baowu Low Carbon Metallurgical Innovation Centre, which is a Baowu-led open platform for advancing metallurgical technologies to support the low-carbon transformation of the steel industry.”
The Renewables Monthly Metals Index (MMI) gained 7.8% for this month’s index value. (Editor’s Note: This report also includes coverage of grain-oriented electrical steel, or GOES.)
EIA: U.S. to add wind, solar capacity to electricity generation mix
While an overwhelming majority of U.S. power generation still comes from non-renewable sources, the renewables share of the mix will only continue to grow.
The U.S.’s share of electricity generation from renewables is forecast to rise from 18% in 2019 to 20% this year, the Energy Information Administration (EIA) reported in its recent Short-Term Energy Outlook. Meanwhile, the EIA forecast the figure to rise to 21% in 2021.
Furthermore, the EIA expects the U.S. electric power sector will add 23.0 gigawatts (GW) of new wind capacity in 2020. In addition, the sector will add 9.5 GW of new capacity in 2021.
Meanwhile, the sector will add 12.8 GW of solar power capacity in 2020 and 14.0 GW in 2021.
Miner Glencore announced an extension of its cobalt supply agreement with Chinese recycler GEM Co. Ltd.
The parties announced a five-year partnership in October 2019. Earlier this month, Glencore announced the two parties would extend the supply agreement an additional five years to 2029.
Under the agreement, Glencore will supply approximately 150,000 tonnes of cobalt contained in hydroxide between 2020 and 2029.
