Articles in Category: Non-ferrous Metals

renewables

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This morning in metals news: the Energy Information Administration forecast the renewables share of US electricity generation will double by 2050; meanwhile, the US unemployment rate fell to 6.3% in January; and, lastly, the tin price has bucked the recent general trend for base metals prices.

EIA: renewables share of electricity generation to double by 2050

The Energy Information Administration forecast the renewables share of US electricity generation will double by 2050.

Wind and solar, in particular, will account for most of that growth, the EIA reported.

Renewables accounted for 21% as of 2020.

Meanwhile, natural gas-fired generation will remain constant over the period. Furthermore, electricity generation from coal and nuclear will decline, the EIA forecast.

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US unemployment dips to 6.3% in January

The US unemployment rate fell to 6.3% in January, down by 0.4 percentage point.

“The labor market continued to reflect the impact of the coronavirus (COVID-19) pandemic and efforts to contain it,” the Bureau of Labor Statistics reported. “In January, notable job gains in professional and business services and in both public and private education were offset by losses in leisure and hospitality, in retail trade, in health care, and in transportation and warehousing.”

Meanwhile, Richard Neal, chairman of the House Ways and Means Committee, issued a statement on the latest jobs report.

“Data point after data point continues to reflect that our economy is being walloped by the pandemic and that robust relief is required,” Neal said. “The anemic and bifurcated job creation this past month demonstrates the inequitable and shaky condition of our labor market. So long as jobs are scarce and caregiving supports and working conditions are untenable, the federal government must help folks stay afloat until they can safely return to work.”

Employment in mining ros by 9,000 jobs in January. Manufacturing employment fell by 10,000 jobs in January on the heels of eight consecutive months of growth.

Manufacturing employment is up by 803,000 since April, the BLS reported.

Tin price gains

The tin price has outperformed other base metals of late.

The LME three-month tin price closed Friday at $23,035 per metric ton, up 8.81% from the previous month.

In 2020, the tin price fell to as low as $13,400 per metric ton in late March.

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US and UAE flags

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The Aluminum Monthly Metals Index (MMI) increased by 2.1% this month, as LME aluminum prices traded sideways and the US reinstated the Section 232 aluminum tariff on imports from the United Arab Emirates.

February 2021 Aluminum MMI chart

U.S. aluminum reinstates aluminum tariff on UAE

On Feb. 1, President Joe Biden reinstated the 10% aluminum tariff on imports from the United Arab Emirates.

Former President Donald Trump had lifted the aluminum tariff on his last day in office. The reinstated aluminum tariff went into effect Feb. 3.

The reinstatement suggests that it is unlikely the Biden administration will remove the aluminum tariffs imposed by the previous administration. However, as of today, no further decisions were announced on aluminum tariffs.

In addition, Biden’s “Buy American” plans could impact the U.S. domestic aluminum market. The plan will likely promote the manufacturing of essential components in construction, appliances and electronics in the US.

These measures are welcomed at the primary production level. However, not all end-product manufacturers are on board, as they claim these government interventions will artificially inflate the Midwest Premium.

The new administration also announced the delay of the effective date of the Aluminum Import Monitoring and Analysis (AIM) system that the U.S. Department of Commerce created. The Department of Commerce originally said the system would be available Jan. 25. However, it is delaying the launch until March 29. Licenses will not be required for covered aluminum imports until the new effective date.

Are rising MW premiums causing concern? See how service centers take advantage of that. 

High aluminum scrap demand

A Midwest-based trader told Construction & Demolition Recycling that demand for aluminum scrap remains high at secondary smelters that supply the automotive industry in the US

Chad Kripke, an executive vice president of Kripke Enterprise, a nonferrous scrap brokerage firm, confirmed that many sellers are relying on the spot market rather than signing contracts for 2021. This signals that it is a seller’s market.

This market environment is due to the reduced flows of scrap, which has caused spreads to tighten. As a result, secondary producers are opting to purchase scrap at what they might view as high prices rather than risking a lack of material.

New on MetalMiner Insights

This month, MetalMiner added additional U.S. aluminum prices to its Insights platform.

Besides the U.S. Midwest Premium Futures, the platform now includes prices for some of the most common forms of aluminum sheet and coil. It includes prices for: 1100 H14, 3003 H14, 5052 H32, 5083 H321, 6061 T6 and 6061 T651.

Price data goes back to Jan. 1, 2020.

Actual metals prices and trends

The Chinese aluminum scrap price increased 0.4% month over month to $2,067/mt as of Feb. 1. Meanwhile, LME primary three-month aluminum increased 0.4% to $1,988/mt.

Korean commercial 1050 aluminum sheet remained flat at $3.30/kg. However, its European equivalent increased 8.3% to $2,948/mt.

Chinese aluminum billet and aluminum bar rose 0.4% to $2,389/mt and $2,489/mt, respectively.

Chinese primary cash aluminum dropped 2.4% to $2,365/mt. Meanwhile, its Indian counterpart declined 2.2% to $2.24/kg.

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metals prices

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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, from steadier metals prices to the United States Court of International Trade’s recent ruling related to a Section 232 steel tariff challenge.

Furthermore, Brazilian miner Vale reached a massive settlement two years after the Brumadinho tailings dam disaster.

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Week of Feb. 1-5 (metals prices in 2021, USCIT rules on Section 232 and more)

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metals prices

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When discussion of metals markets — indeed, any markets — considers likely price trends, it nearly always starts off looking in the rear-view mirror.

Last year’s copper market suggests a bull market driven by vociferous Chinese demand. Imports surged after China relaxed its spring lockdown. Prices rose strongly, up some 48% on the LME from March lows, led by speculative interest (particularly on the SHFE).

Bulls would have you believe we have much further to go.

But 2021 is not 2020.

The combination of stimulus and demand catchup will not be the feature in 2021 that it was in 2020. That will be true in China and the wider global economy.

Metals prices in 2021: what’s next?

Reuters recently reported the consensus price for copper this year is US $7,600 per metric ton, up 23% from last year’s consensus. However, it’s some $200 per metric ton below the current price.

However, on the other hand, 2021 is not likely to show the volatility we saw last year. Major black swans like a killer new mutant strain emerging excepted, expectations are prices will trade in a relatively narrow band this year compared to last.

Furthermore, 2022 is likewise expected to be much more stable. Still some years away from major electrification demand outpacing copper supply, 2022 is forecast to see a median price of US $7,625 per metric ton.

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Price movements elsewhere

Accepting that the one thing you can be sure of with forecasts is they will be wrong, the underlying rationale has some merit because it applies to pretty much the whole base metals complex. Recent price movements suggest it applies to steel, as well.

Supply is recovering fast. While exchange stocks do not necessarily reflect this across all metals — some, like aluminum and zinc, have far larger off-market stocks — a realization that they are there will temper expectations of higher prices.

As economies recover from 2020 and the impact of ongoing lockdowns, Chinese demand (equivalent to roughly half the world’s output of many metals) will likely ease as the tailwinds of the stimulus measures wane and the economy pivots more toward consumption. China cannot afford to allow continued rising debt levels or stoke its hot property market. Regarding the latter, the authorities have already signaled their intent to damp down demand.

Local distortions may still support local markets – to the extent President Joe Biden’s “Buy American” plan may support local producers of steel and, in particular, should be beneficial for North American USMCA steel mills – but such price premiums will be relative to the rest of the world. In short, they won’t be sufficient to send the market in the opposite direction.

Reuters reported all the base metals, with the exception of tin, will likely be in surplus this year and next.

If there is one silver lining for metals consumers to look forward to in 2021, apart from an effective jab, it is that prices may be more stable. Furthermore, they will likely be more predictable and, for some, a little lower than they have been of late.

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mining

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This morning in metals news: US mines produced approximately $82.3 billion in minerals in 2020; meanwhile, the United States International Trade Commission launched a Section 337 investigation related to batteries; and, lastly, aluminum prices have been dropping.

US mines produced $82.3 billion in minerals in 2020

US mines produced approximately $82.3 billion in minerals last year, the United States Geological Survey (USGS) reported Tuesday.

The totaled marked a decline of $1.5 billion from 2019.

“Decision-makers and leaders in both the private and public sectors rely on the crucial, unbiased statistics and data provided in the Mineral Commodity Summaries to make business decisions and determine national policy,” said Steven M. Fortier, director of the National Minerals Information Center. “Industries—such as steel, aerospace and electronics—that use nonfuel mineral materials created an estimated $3.03 trillion in value-added products in 2020, which represents a 3% decrease from that in 2019.”

The US, however, continues to be heavily import-dependent for many raw and processed minerals. According to the USGS, imports made up more than half of US consumption of 46 nonfuel mineral commodities. Furthermore, the US was totally import-dependent for 17 of those.

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USITC launches Section 337 battery investigation

The USITC announced it had launched a Section 337 probe involving potential patent infringements related to batteries, citing 13 Chinese firms as respondents in the case.

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copper bars

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This morning in metals news: the copper price fell to its lowest level in a month; US housing starts ticked up 5.8% in December; and China’s industrial profits rose 4.1% in 2020.

Copper price dips to one-month low

After surging in the second half of 2020, the copper price has slumped thus far in 2021.

The LME three-month copper price closed last week at $7,873 per metric ton, its lowest in a month.

The price had reached as high as $8,160 per metric ton earlier in January.

As we noted last week, the LME average cash copper price jumped 9.8% from November to December.

However, the copper price has not been the only metal to retrace this past month. Aluminum has also slowed down, closing the month at $1,987 per metric ton after reaching $2,068 per metric ton earlier in the month.

Furthermore, the lead price trended flat in January, while the LME three-month zinc price fell by 6.71%.

Amid the bearish notes from other metals, the tin price played a different tune. The LME three-month tin price closed January up 14.16% month over month, settling at $23,140 per metric ton at the end of last week.

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US housing starts rise in December

Speaking of the copper price, copper is used in a variety of applications in homes, from copper wiring to plumbing systems.

US privately owned housing starts rose 5.8% in December from the previous month, the Census Bureau and the Department of Housing and Urban Development reported.

Starts reached a seasonally adjusted annual rate of 1.67 million in December.

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General Motors headquarters in Detroit, Michigan

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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.

In sustainability news, Big 3 automaker General Motors said it intends to be carbon neutral in its operations by 2040. The automaker has also indicated it will offer 30 new all-electric models by mid-decade, as it — like other traditional automakers — aims to catch up to Tesla in the electric vehicle market.

In other news, US GDP gained by 4% in the fourth quarter of 2020. Meanwhile, US steel imports increased in December and the copper price rise has slowed down in recent weeks.

Week of Jan. 25-29 (General Motors makes carbon pledge, copper prices and more)

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copper bars

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The International Copper Study Group (ICSG) reported the global copper market posted an apparent deficit of 480,000 metric tons through the first 10 months of 2020.

Global copper market in deficit, output down

In addition to the global copper market deficit, the ICSG reported global copper mine production fell by 0.5% during the aforementioned period.

Concentrate production did not change compared with the previous year, while solvent extraction-electrowinning fell by 2%.

The COVID-19 pandemic impacted copper mine production last year, particularly in April and May.

In Peru, the world’s second-largest copper producer, copper mine production fell by 14% during the first 10 months of 2019. Furthermore, from April-May, production fell 38% year over year.

However, Peru’s output recovered gradually, eventually coming in up 1.5% year over year in October.

Meanwhile, Chile, the top producer, saw output fall 3% from July-October, leaving output unchanged year over year for the 10-month period.

Mine production also fell in Australia, Mexico and the United States.

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Refined copper production up 1.5%

Meanwhile, refined copper production rose by 1.5% during the 10-month period.

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earnings sign

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This morning in metals news: Cleveland-Cliffs released its preliminary Q4 2020 results; demand for sustainable aluminum is rising in the maritime industry; and U.S. steel prices continue to rise.

Cleveland-Cliffs revenue jumps

Cleveland-Cliffs reported Q4 2020 revenues of approximately $2.2 billion to $2.3 billion.

The total marked a 320% year-over-year jump.

Meanwhile, the firm reported EBITDA of $280 million to $290 million, or up 150% year over year.

Furthermore, the firm tallied steel sales volume of 1.9 million net tons.

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Demand for sustainable aluminum

Oslo-based Norsk Hydro explained that demand for sustainable aluminum products in the maritime industry is on the rise.

“We see the maritime industry has increased its focus on sustainable products, material selection and design in recent years,” said Thomas B. Svendsen, market manager in Hydro. “Electric ferries carry heavy batteries and need lighter materials. The CO2 footprint in the industry needs to be reduced and recycling of material has therefore gained traction. Aluminium is a good fit.”

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aluminum ingot stacked for export

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This morning in metals news: the Aluminum Association outlined the issues it hopes the Biden administration will take on; in addition, Alcoa recently reported its Q4 2020 and full-year results; and, finally, the oil price retraced slightly this week.

Aluminum Association: aluminum can be part of ‘American comeback’ story

The Aluminum Association laid out its ambitions and goals for a better U.S. aluminum sector in a series of documents titled “Presidential Policy Brief: Recommendations for a Strong U.S. Aluminum Industry.”

“We congratulate President Biden and look forward to working with him and his team in the coming months and years,” said Tom Dobbins, president and CEO of the Aluminum Association, in a release. “During this challenging time for our nation, it is critically important that we all work together toward renewal and recovery. A strong and growing domestic aluminum industry can play a role in the American comeback story.”

The brief refers to energy, environment, infrastructure, recycling and trade as key areas for aluminum.

“The single biggest threat to U.S. aluminum remains unfairly subsidized overcapacity in China,” the brief states. “Strong, targeted trade enforcement is vital to the U.S. aluminum industry’s ability to compete on a market-based, level playing field. The Aluminum Association supports renewed cooperation with traditional trading partners and allies to address this perennial issue.”

Furthermore, the Aluminum Association cited the need to improve recycling levels from consumer applications.

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