Articles in Category: Public Policy

This morning in metals news: the U.S. steel capacity utilization rate rose to 84.1% last week; privately owned housing starts jumped in June; and, lastly, Pedro Castillo has been declared president-election in Peru.

Does your company have a steel buying strategy based on current steel price trends?

US steel capacity utilization rises to 84.1%

hot rolled steel

niteenrk/Adobe Stock

The U.S. steel capacity utilization rate continues to rise, jumping to 84.1% for the week ending July 17, the American Iron and Steel Institute reported.

The sector churned out 1.86 million net tons during the week. The output total marked an increase of 0.4% from the previous week and 37.7% year over year.

For the year to date, output reached 50.8 million net tons at a capacity utilization rate of 79.6%.

Housing starts jump in June

Meanwhile, privately owned housing starts reached a seasonally adjusted annual rate of 1.64 million in June, the Census Bureau reported.

Read more

Government interference, even for the best of reasons, can have market-distorting effects.

Take, for example, calls by European aluminum producers to be excluded from the European Union’s Carbon Border Adjustment Mechanism (CBAM) carbon border tax proposal.

Do you know the five best practices of sourcing metals, including aluminum?

European aluminum producers want out of CBAM

E.U. flag

Andrey Kuzmin/Adobe Stack

According to a Financial Times report this week, European aluminum producers are calling for exclusion from the first phase of the E.U.’s CBAM. They claim the plan will put the industry at a competitive disadvantage to foreign rivals. The argue it will encourage firms to direct their low-carbon production to Europe and simply sell their high-carbon production elsewhere.

As such, the net effect will be little global reduction in carbon emissions but significant competitive damage to domestic European producers, whose own carbon footprint may not be as low as those foreign competitors.

Some European mills, like Norsk Hydro, have extensive hydroelectric-powered smelter capacity. However, smelters in Europe (including Norway) currently incur a carbon cost, which is part of their electricity prices, the Financial Times reports.

Even producers using hydro and nuclear power pay because of Europe’s marginal pricing system for electricity, which is usually set by coal-fired power stations.

Read more

This morning in metals news: U.S. fossil fuel consumption last year fell to its lowest level in nearly 30 years; nonfarm payroll employment rose by 850,000 in June; and, lastly, the American Iron and Steel Institute commented on the House’s INVEST in America Act.

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

Fossil fuel consumption falls

crude oil

phonlamaiphoto/Adobe Stock

U.S. fossil fuel consumption fell to its lowest level in nearly 30 years, the Energy Information Administration reported.

Total U.S. consumption of fossil fuels fell to 72.9 quadrillion British thermal units in 2020. The total marked a 9% decline from 2019.

“Last year marked the largest annual decrease in U.S. fossil fuel consumption in both absolute and percentage terms since at least 1949, the earliest year in our annual data series,” the EIA said. “Economic responses to the COVID-19 pandemic in 2020, including a 15% decrease in energy consumption in the U.S. transportation sector, drove much of the decline. The United States also had relatively warmer weather in 2020, which reduced demand for heating fuels.”

Nonfarm payroll employment up by 850,000

Nonfarm payroll employment rose by 850,000 in June, the Bureau of Labor Statistics reported.

Meanwhile, the national unemployment rate remained at 5.9%.

Read more

The metals markets received a jolt late last week with the news that Russia is considering applying export tariffs to steel, aluminium, copper, nickel and ferro alloys from this August through to at least the end of the year in order to ease metal supply and prices for domestic consumers.

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

Russia metals tariffs to cover copper, aluminum, nickel and others

tariff

Feng Yu/Adobe Stock

According to Bloomberg, the plans include a base duty rate across all products covered by the duties of 15%. However, it includes a specific minimum tariff for each metal, varying from $1,226 a ton for copper, $2,321 for nickel and $254 for primary aluminum. In addition, each steel grade would incur its own rate, starting with HRC at $115 per ton.

As Bloomberg states, the taxes could have far-reaching implications for global metals markets.

That is particularly true at a time of tight supply for products such as aluminum.

Rusal controls about 10% of the global aluminium sector. Meanwhile, Norilsk Nickel produces about 20% of the world’s nickel. Russia is the third-biggest steel exporter, with most sales going to Europe.

Just under 10% of the European market is serviced by primary aluminum imports from Russia. Europe is not alone, either. The U.S. and consumers in the Far East all receive primary aluminum supplies. Therefore, the tariff will have an impact on physical delivery premiums in the U.S., Europe and Japan.

Read more

This morning in metals news: real GDP increased in all 50 states and the District of Columbia in the first quarter of 2021; the Energy Information Administration released an update on drilled but uncompleted wells; and, lastly, the Aluminum Association commented on the ongoing infrastructure talks.

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

GDP rises in all 50 states

US GDP

alexlmx/Adobe Stock

Gross domestic product (GDP) increased in all 50 states and the District of Columbia in Q1, the Bureau of Economic Analysis reported.

U.S. real GDP increased by 6.4% in the quarter.

Among the states, Nevada led the way with GDP growth of 10.9%.

EIA: drilled but uncompleted wells peaked in June 2020

The Energy Information Administration (EIA) today released an update on what it considers to be drilled but uncompleted wells for oil and natural gas basins.

“In May 2021, the most recent month available, we estimated that the United States has about 6,521 DUCs in seven major tight oil and shale natural gas basins, up from about 4,425 DUCs in 2013, the earliest year in the data series,” the EIA reported. “Nearly 40% of DUCs (or 2,616 DUCs) are in the Permian Basin, located in western Texas and eastern New Mexico.”

Read more

The steel market is running two diverging narratives.

In the U.S., the market remains extremely tight. Mill lead times are out to the end of this year. Furthermore, prices are set to stay high into 2022.

The situation is not dissimilar in Europe. In Europe, the steel market is seeing a similar post-pandemic bounceback, supply chain restocking and constraints, like the U.S., by tariffs on imported material.

But in the rest of the world, global steel production seems to be slowing. Raw material prices — iron ore, in particular — are easing.

Are you under pressure to generate steel cost savings? Make sure you are following these five best practices

Steel market narrative outside of US, Europe

China steel production

Zhao Jiankang/AdobeStock

According to Capital Economics, global daily steel production in May came in somewhat lower than April, as output in China dipped.

The World Steel Association reported global steel production rose by an impressive 16.5% year over year in May. However, this is against a 2020 reference point during which many countries were only starting to emerge from national lockdowns in May 2020.

But looking at the month-over-month growth rate, daily global steel output fell by 0.4% in May. That followed a 3.5% rise in April.

At the same time, Beijing’s combination of dire warnings about manipulative speculative pricing, restrictions on credit for construction and pressure on polluting industries to reduce emissions have combined to cause a sharp correction on the previously buoyant iron ore price, down 9% on the Dalian exchange to $173/ton this week.

Read more

This morning in metals news: the U.S. Court of International Trade granted defendants’ motion for partial dismissal of a challenge to the U.S.’s Section 232 duties on Canadian steel; the Midwest is the heart of U.S. wind capacity; and, lastly, U.S. Steel released its second-quarter guidance.

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars — including the next one scheduled for Thursday, June 24 — and sign up for each on the MetalMiner Events page.

Court of International Trade rejects Section 232 challenge

U.S. trade

freshidea/Adobe Stock

The U.S. Court of International Trade on Tuesday rejected a challenge to the Section 232 duties on Canadian steel.

Maple Leaf Marketing, based in Midland, Texas, filed the complaint. The company is the U.S. agent for EndurAlloy™ production tubing for Calgary-based Endurance Technologies Inc.

Maple Leaf challenged the “constitutionality and lawfulness of duties imposed on re-imported steel tubing” pursuant to Section 232. 

Midwest wind

Since 2011, most U.S. wind capacity has been built in the Midwest, the Energy Information Administration reported.

“The Texas, Midwest, and Central regions—home to some of the country’s most prolific wind resources—combined accounted for the largest share of U.S. wind capacity growth from 2011 to 2020 with 73% of additions,” the EIA reported. “At the beginning of 2011, the Texas region (which covers the area served by ERCOT) had 9.4 GW of wind capacity; by the end of 2020, capacity had grown to 27.9 GW.”

Furthermore, Midwest wind capacity tripled, from 8.6 GW in 2011 to 26.9 GW in 2020.

Meanwhile, in 2011, the Central region had about half the wind capacity of the Texas and Midwest regions, the EIA added. The Central region added 20.5 GW of wind capacity over the last decade, more than any other region.

U.S. Steel releases Q2 guidance

U.S. Steel released its Q2 guidance, estimating adjusted EBITDA of $1.2 billion.

In addition, the steelmaker projected net income of $880 million.

“Higher steel prices and strong flat-rolled steel demand coupled with well-run operations are expected to deliver adjusted EBITDA that more than doubles our first quarter performance,” U. S. Steel President and CEO David B. Burritt said. “Continued strong demand and low steel inventories are empowering today’s ongoing market improvements. These market fundamentals are showing no signs of slowing down and have us increasingly confident of another strong year in 2022.”

See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your steel buy.

It would seem Beijing only has to speak and the market reacts — this time, it’s about base metals.

Worried by what it sees as excessive inflation in commodity prices, which it fears will lead through into factory gate increases, China warned speculators last month over “excessive speculation.” The warning from China’s National Food and Strategic Reserves Administration hit the iron ore market hard, the Financial Times reports, sending the price 10% lower.

Do you know the five best practices of sourcing metals, including aluminum?

China turns to base metals

China aluminum

Grispb/Adobe Stock

This month, Beijing has turned its attention to base metals.

The authorities have hinted they may release metal from their strategic reserves. The move would be an overt attempt to dampen further price rises in what it sees as a speculator-fueled rally. Where applicable, it would provide additional supply for those metals where supplies are genuinely tight.

The country holds strategic reserves in copper built up over decades. During slumps, like after the financial crisis, Beijing has stepped in to support domestic producers.

State secrets

As a strategic reserve, copper stocks are a state secret.

Read more

This morning in metals news: production has resumed at Tenaris‘ steel plant in Koppel, Pennsylvania; meanwhile, Anglo American said it has demerged its thermal coal operations in South Africa; and, lastly, the United Steelworkers union commented on the Biden administration’s recently released supply chain review.

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

Tenaris steel plant in Pennsylvania resumes production

Tenaris logo

pvl/Adobe Stock

Luxembourg-based Tenaris’ steel plant in Koppel, Pennsylvania, has resumed production after a yearlong hiatus for upgrades.

“Steel production is now underway at Tenaris’s first melt shop in the United States that will soon supply steel bars for its seamless pipe mills in the States and Canada,” Tenaris said in a press release.

“The steel shop in Koppel, PA, part of the company’s strategic acquisition of IPSCO, completed in 2020, has started producing steel bars following a year-long investment of more than $15M USD in upgrades to integrate the facility into Tenaris’ global network of steel mills.”

Last year, on the heels of the outset of the COVID-19 pandemic, Tenaris announced idling of a number of U.S. plants. In April 2020, the company said declining oil and gas prices, oversupply in the oil market and COVID-19 operational restrictions underpinned its decision.

Read more

This morning in metals news: the United States International Trade Commission made determinations in a five-year sunset review covering imports of cut-to-length carbon steel plate; meanwhile, United States Trade Representative Katherine Tai will outline the Biden-Harris administration’s “worker-centered trade policy” today; and, lastly, the Consumer Price Index for All Urban Consumers rose by 0.6% in May.

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

USITC rules on cut-to-length carbon steel plate imports

United States International Trade Commission

JHVEPhoto/Adobe Stock

The USITC recently made determinations in a five-year sunset review regarding an existing anti-dumping duty order on cut-to-length carbon steel plate from China and terminating suspended investigations on imports of the product from Russia and Ukraine.

In its vote, the USITC said revoking the anti-dumping duty order on the carbon steel plate from China “would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.”

It also voted to maintain existing suspension agreements for the imports from Russia and Ukraine.

Read more

1 2 3 133