Articles in Category: Product Developments

The Renewables MMI (Monthly Metals Index) dropped significantly from June to July. All in all, the index fell a staggering 22.05%. How will this impact steel prices today?

Renewable Prices

Problems With China’s Solar Panel Manufacturing Dominance

Some experts say that initiatives aimed at creating a zero-carbon future are being impacted by dependence on Chinese solar panels. Recently, the International Energy Agency announced a less-than-favorable outlook regarding China’s dominance on solar panel manufacturing. According to the IEA, the US’ high demand for solar panels has increased its dependency on China. In fact, the United States’ PV (photovoltaic) solar demand exceeds China’s by more than twice.

Solar Panels

Multiple solar panels

Cost-efficiency plays a considerable role in outsourced solar panel production. However, this could have unseen consequences. The fast-growing demand for solar panels in the US poses an issue in and of itself.

While people’s hearts are in the right place (lowering carbon emissions), an area of production growing and expanding so quickly typically doesn’t leave time for proper regulation. Also, the profitability of global solar energy initiatives is volatile. As the IEA says, solar power has a need and demand, but it must first have all moving parts in place.

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Ireland Revs Up Renewable Wind Energy

Recently, Ireland began utilizing green hydrogen to bump up its renewable energy storage with wind power. CleanTechnic, a US-based clean energy news source, noted that Ireland was behind its fellow European nations in terms of hydrogen energy. Hydrogen, according to some, remains an untapped and heavily un-researched renewable energy source. In fact, the base element has already proved invaluable in other commodities markets such as agriculture and natural gas.

Ireland’s new  “green hydrogen” project relies heavily on offshore wind energy. Currently, Ireland has 45 offshore wind farms in the works. Despite this, there are only two currently running. Unfortunately, numerous roadblocks have caused significant delays in new wind initiatives. Examples include planning delays, building permission problems, and the surrounding shoreline being too deep for fixed wind structures.

Wind Power

Offshore wind turbines

With the new green hydrogen initiative, Ireland could remedy these problems with hydrogen-fueled storage and floating wind structures. That said, this brand-new renewable energy solution remains largely untested, and, therefore, questionable in reliability. Could floating offshore wind turbines prove a reliable source of energy and a remedy to deep offshore restrictions? As WIRED recently noted, the initiative appears so promising that billions of dollars are currently being invested into it globally.

The GOES/Grain Oriented Electrical Steel MMI (Monthly Metals Index)

The GOES index continued its climb from June to July. Altogether, the index rose by 2.4%

Steel Prices Today

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GOES Opportunity for American Appliances: Steel Prices Today

How do GOES prices keep such a bullish pace? There are numerous factors at work, especially on the demand side. In addition, government regulations limiting CO2 emissions has also helped to drive demand for high-power transformers, motors, power transmission and other purposes according to a recent report.  Add all of these sectors up, and it’s no surprise why GOES products are some of the most sought-after in the marketplace.

On top of this, electrical steel, in general saves consumers a fortune in electric costs. This is mainly due to its ability to maintain heat by as much as 30%. And with the cost of everything steadily rising in the US, consumers are more contentious about saving money than ever.

Steel Rolls

Rolls of steel sheet in a factory.

 

Renewables and GOES Trends, Facts, and Figures:

  • Chinese neodymium prices only fell slightly by 0.9%, leaving prices at $176,177.25 per metric ton
  • Chinese steel plate took a heavier hit. Prices dropped 8%. Meanwhile, the current price per metric ton sits at $739.01
  • U.S. steel plate also dropped in price but not as dramatically. Prices fell 3.07%. Current price sits at $1,833 per short ton.

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Novelis recently announced construction of a state-of-the-art, $2.5 billion recycling and aluminum rolling facility in Baldwin County, Alabama. In addition, a statement in Made in Alabama suggested that the 3,000-acre South Alabama Mega facility will create approximately 1,000 jobs.

According to the Novelis, the site will be the first fully-integrated aluminum mill built in the US in 40 years. It is to be located in Bay Minette, northeast of Mobile. In most cases, Alabamans greeted the news with celebration. After all, the plant is sure to give the area a major economic boost and may open the door for future investment.

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The aluminum rolling plant will process billions of cans per year.

OlegDoroshin/Adobe Stock

An Aluminum Rolling Mill for the Future

Over half of the facility’s 600,000 ton annual capacity will be can stock. Packaging and automotive will make up the rest. This suggests the operation will primarily serve as a direct-to-end-user business. This is important as it won’t displace imports in the distributor market for commercial products.

The plant will focus heavily on using renewable energy, recycled water, and other green programs. These sorts of zero-waste policies are largely expected of recycling plants. The decision is sure to please environmentalists. It will also boost the firm’s reputation as a low carbon, low impact producer.

Of course, Baldwin County loves the prospect of such a large number of well-paid jobs. Indeed, Alabama is one of the poorest states in the US. In 2018, the median household income was just $49,861. Compare that to the US average of $61,937. The state is sure to benefit from a world-class manufacturing facility with advanced automation. It will also expose a new generation of workers to digital technologies like AI, AR, and robotics.

MetalMiner tracks a full range of semi-finished aluminum prices for both Europe and the US. The MetalMiner Insights platform also provides short and long term aluminum forecasts. 

Coming to Alabama (in 2025)

Experts suggest that  state and local financial incentives influenced the site location. After all, Alabama lobbied hard for the plant and its 1000+ jobs. However, being near clients is also important to Novelis’s closed-loop supply chain model. This means that waste from the company’s can makers will be  re-processed along with the end-of-life cans. Baldwin county’s centralized location and multiple transport routes likely impacted the decision.

A company statement estimated that Novelis will soon be able to recycle 90 billion cans globally. This is a big increase from its current 74 billion capacity. Don’t hold your breath in terms of a rush of metal availability, though. They doesn’t expect to commission the plant until sometime in 2025.

The new Novelis facility will likely have a major impact on the US aluminum market. Currently, aluminum prices are seeing record highs. In March, a single metric ton cost $3,498.  And while recycled aluminum is cheaper, it can’t be used in as many applications. Experts foresee aluminum demand increasing 40% by 2030. In such a market, we will need all the sources we can get.

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India’s Hindalco Industries Ltd. (a major aluminum and copper producer) recently earmarked CAPEX totaling US $7.2 billion. According to recent news reports, Hindalco management is seeking to expand the company’s aluminum production over the next five years. This includes commitments to boost aluminum resources in both North America and Germany.

In a recent presentation to investors, Hindalco reps remarked on how global supply shortages have pushed aluminum prices to new levels. In response, they’re pouring resources into new investments. The plan includes US $4.8 billion for its subsidiary, Novelis Inc., which will help increase distribution to the US, Brazil, Asia, and Germany. This move comes fresh on the heels of several other major expansions.

All in all, Hindalco has decided to use about 75% of its cash flow towards growth CAPEX. Of the total new investments until 2027, US $2.4 billion has been earmarked for spending in India.

 

Aluminum resources are crucial to many industries around the world.

 

Spending in All the Right Places

Most analysts and industry experts welcomed Hindalco’s announcement with open arms. After attending the presentation earlier this month, Edelweiss reported that Hindalco’s CAPEX plan should strengthen its competitive position in chosen markets. Better yet, it will still allow the company to concentrate on the high returns segment in India.

In its main points, the presentation referred to the company assessing and setting up the first greenfield mill in the US 20 years ago. It also reminded attendees of how Hindalco concentrated on US beverage can and automotive markets and limited Brownfield Al smelter expansion to 180ktpa.

The Edelweiss team went on to report that concentration in the US and on alumina in India was a step in the right direction. The former represents some 65% of total Novelis spending. The latter represents some 32% of all spending on the subcontinent.

Expanding US Automotive Recycling

Aluminum is the key ingredient in countless products, including everything from auto parts to beverage cans. Earlier this month, aluminum prices jumped to an unprecedented high of $4,000 a ton. This was largely the result of Russia’s war against Ukraine, which raised apprehensions about stifled supply.

Back in January, Novelis announced plans to construct a US $365 million recycling center next to its automotive finishing plant in Guthrie, Kentucky. According to a report in Recycling Today, the center would bring its carbon emissions down by over one million tons a year. At the same time, it would help expand the company’s closed-loop recycling program. Even better, the center would also be able to process aluminum from end-of-life vehicles.

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Metal rolled aluminum products.

Committed to a Sustainable Aluminum Resources

Last October, Novelis announced plans to invest approximately US $130 million in upgrades to its aluminum mill in Oswego County, New York. Even then, Hindalco was eager to need a growing demand for sustainable, aluminum at rolled products. According to the report, the upgrades would allow the facility to boost hot mill capacity by 124,000 metric tons.

When completed, the new recycling center in Kentucky will feature advanced shredding and sorting technology. It will also boast several energy-efficient innovations intended to support Novelis’ sustainability goals. Among them is a commitment to reduce energy intensity by at least 10 percent before 2026.

Plans for Europe Still Forthcoming

While the company explained its India and North American expansion plans in some detail, its plans for the German operation were less thorough. Of course, Novelis is well recognized as a key player in the German automotive market. Along with the likes of Thyssenkrupp AG, & BASF SE, the company helps manufacture lightweight materials for electric vehicles.

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British Steel aim to slash their carbon emissions 82% by 2035. This would fall in line with the UK’s commitments to the Paris Agreement and the country’s own carbon reduction targets, a company official said on Jan. 25.
One way the company plans to achieve the decreases involves a new electric furnace in two to five years at its Scunthorpe works, in Lincolnshire. The company would replace one of the two operating blast furnaces on site, said Lee Adcock, British Steel’s Environment and Sustainability Director, on a webinar titled British Steel – the Decarbonization Roadmap.
British Steel also envisages a carbon capture and storage system for the remaining BF/BOF production routes, Adcock added.
Crude capacity
Only two of the blast furnaces at Scunthorpe have operated since around the turn of the century. The plant also has one convertor shop with three vessels, of which two normally operate, Adcock told MetalMiner.
Current crude capacity at the plant rests at about 2.5 million metric tons per year via BF/BOF. Scunthorpe also casts the liquid steel into billets and blooms for rolling on site into 2 million metric tons per year of rods and rails. The company also has a beam rolling mill at Teesside, in northeastern England.
Adcock declined to indicate the planned EAF’s capacity, yet noted that the company does not plan to reduce the site’s steelmaking capacity.
Increase use of scrap and ore based metallics
British Steel’s decarbonization roadmap also foresees increasing scrap and ore based metallics in the early 20s. The company will start using renewable energy and hydrogen in its steelmaking processes by the early 30s.
The road map would meet the UK government’s plans to achieve net zero emissions by 2050. In addition, it would achieve a 78% reduction in emission levels from 1990 by 2035, Adcock mentioned.
End users have become more interested in steel with lower-embedded carbon in steel products. British Steel plans to roll steel products with greater durability that do not require replacement as often as earlier products, Adcock added.
Made in the UK
The UK domestic market purchases most of British Steel’s rails and about 50% of rod in coil. The export market purchases the other half, Adcock stated.
Trade union Unite also urged the UK government on Jan. 3 to set clear targets on the use of UK-produced steel on the HS2, high-speed rail project. “In the case of HS2, UK producers should have a paramount place in producing steel for the project. Surely that is economic common sense?,” the union quoted its general secretary Sharon Graham as saying.
Financial investment into British Steel’s projects would cost “many millions,” Adcock noted in the webinar, though he declined to say how the company would finance it.
Jingye Group, headquartered in Hebei Province, acquired British Steel from Greybull Capital in 2020.
The Chinese company’s affiliates include Jingye Steel, Ulanhot Steel, Yunnan Jingye Steel and Guangdong Jingye Steel, which produce flats and longs.

MetalMiner, the leading metal market price intelligence brand and SaaS platform, providing forecasts, analysis and risk mitigation solutions for global manufacturers, has moved to newly incorporated Alpha Commodities, spinning out of parent company Azul Partners.

Supply chain disruptions, lack of material availability, high prices and rampant inflation have wreaked havoc for manufacturers and other industries. The MetalMiner (SM) Insights platform enables buying organizations to receive actionable procurement guidance and to develop category strategies with real-time price feeds, forecasts, prescriptive sourcing recommendations and should-cost models.

“We’re hearing increasing frustration amongst global manufacturers that highly volatile metals markets and supply chain disruptions have made managing margins nearly impossible,” said Don Hauser, vice president of business solutions and formerly a supply base manager at John Deere. “It has been extremely difficult to achieve budget and profitability targets.”

The MetalMiner Insights platform and related forecasting solutions, currently used by over 50 of the world’s largest OEMs and their supply chain partners, help buying organizations plan their purchases, according to Michael Struhar, senior sourcing manager at Milwaukee Tool Corp. “Personally, the most valuable piece in the Insights platform is the at-a-glance current price and forecast data that assists with forward planning and negotiations,” Struhar said. “It’s the best overall information data related to metal commodities.”

“We are very excited about the company’s growth trajectory and product road map,” said Lisa Reisman, CEO and founder of Alpha Commodities. “For the past six years, MetalMiner has achieved an unparalleled forecasting track record resulting in cost savings and real price risk mitigation for manufacturers. Our AI capability, correlation analysis, and predictive analytics provide the most comprehensive OEM metal price intelligence solution available today.”

The MetalMiner Insights platform provides both 30-day and longer-term price outlooks across a range of non-ferrous and ferrous metals. Built using a technical analysis methodology and AI, MetalMiner subscribers receive specific actionable buying insights to support strategic sourcing decision-making. The platform is available as an enterprise solution and also through a full API integration capability.

The MetalMiner forecasting and buying strategy track record can be accessed here for stainless steel, here for carbon steel and here for aluminum.

Media Contact:

Lisa Reisman

lreisman@metalminer.com

Tel 773.865.0387

About Alpha Commodities

Alpha Commodities, through its MetalMiner (™) brand, provides unique price data, short- and long-term forecasts with actionable buying strategies, and should-cost modeling. The company is a woman-owned business situated in Gary, Ind.

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

Each month, MetalMiner hosts a webinar on a specific metals topic. The next webinar is scheduled for Wednesday, Dec. 8, during which the MetalMiner team will discuss price predictions for 2022. To sign up, visit the MetalMiner Events page.

stainless steel rods

selenserger/Adobe Stock

Week of Nov. 15-19 (stainless steel base prices, infrastructure bill and more)

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This morning in metals news: Nucor Corporation announced the launch of a line of net-zero carbon steel products; meanwhile, the American Iron and Steel Institute released September import permit application data; and, finally, average U.S. home mortgage rates continue to hover around 3%.

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Nucor announces new line of net-zero carbon steel

Nucor logo

Postmodern Studio/Adobe Stock

Nucor announced it is launching a new line of net-zero carbon steel products.

The steelmaker said General Motors will be the first recipient of the new Econiq™ line of net-zero carbon steel products.

“General Motors will receive the Econiq net-zero steel beginning in Q1 2022, and it is projected that all steel purchased by GM from Nucor will be net carbon neutral by the end of 2022,” Nucor said.

Steel import permit applications jump in September

U.S. steel permit import applications for September surged by 8.8% from August to September, the American Iron and Steel Institute reported.

September import permit application tonnage totaled 2.87 million net tons.

Furthermore, estimated finished steel import market share reached 22% in September, up from 20% for the year to date.

Home mortgage rates remain around 3%

U.S. mortgage rates dipped slightly this week, mortgage loan company Freddie Mac reported.

The average 30-year fixed rate mortgage this week dipped to 2.99%, down by 0.02 percentage point from the previous week. The 15-year rate fell to 2.23%.

“Mortgage rates continue to hover at around three percent again this week due to rising economic and financial market uncertainties,” Freddie Mac noted. “Unfortunately, with the expectation that both mortgage rates and home prices will continue to rise, competition remains high and housing affordability is declining.”

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This morning in metals news: U.S. steel capacity utilization dipped to 84.8% last week; meanwhile, General Motors signed a memorandum of understanding with GE Renewable Energy to develop a rare earths supply chain; and, lastly, the United States Trade Representative commented on potential targeted exclusions for the Section 301 tariffs on Chinese goods implemented during the Trump administration.

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US steel capacity utilization at 84.8%

steelmaking in an EAF

nikitos77/Adobe Stock

U.S. steel capacity utilization fell to 84.8% for the week ending Oct. 2, the American Iron and Steel Institute reported.

The rate dipped from 85.2% the previous week. Meanwhile, steel output last week totaled 1.87 million net tons, AISI reported. The total marked a 0.4% decline from the previous week but a 21.6% year-over-year increase.

Production in the year to date reached 71.4 million net tons, up 20.3% year over year.

GM, GE Renewable Energy sign MoU

General Motors and GM Renewable Energy have signed a memorandum of understanding (MoU) through which they will work to develop a supply chain for rare earths and other materials needed for electric vehicles and renewable energy.

Read more

This morning in metals news: pre-Labor Day retail gasoline prices are at their highest level in seven years; meanwhile, payroll employment rose by 235,000 in August; and, lastly, Norilsk Nickel has signed an agreement to build a liquefied natural gas icebreaker.

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Pre-Labor Day gasoline prices rise

gasoline pump

papzi/Adobe Stock

To the chagrin of those driving this holiday weekend, pre-Labor Day gasoline prices have reached their highest level since 2014, the Energy Information Administration reported.

The average gas price reached $3.15 per gallon as of Aug. 30.

Furthermore, the price marked a 42% jump compared with the same point in 2020.

Payroll employment up 235K

U.S. payroll employment picked up by 235,000 in August, the Bureau of Labor Statistics reported.

Furthermore, monthly job growth so far this year has averaged 586,000 per month.

Read more

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:

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Week of Aug. 16-20 (shipping sector disruptions, Chinese steel prices and more)

Shipping

enanuchit/Adobe Stock

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