Articles in Category: Sourcing Strategies

China has previously been cast in a sinister role with respect to restricting the production and export of critical rare earth metals, usually salts, used to produce a host of products. Those products include magnets for consumers electronics and electric cars, defense equipment and advanced ceramics.

But while the country deliberately created a near monopoly position in the global rare earths refining market, it created a horrendous environmental problem in the process.

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Rare earths consolidation and rising prices

rare earths loaded on cargo ship in China

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In an effort to clean up its environmental act and to gain better control over what had become a wild west mining and refining landscape, Beijing engineered consolidation in the industry to fewer but larger entities.

However, that’s when the criticism started, as China capped exports, causing a spike in prices.

That was largely short-lived. Prices returned to earth after a spike in 2017. However, prices have been rising strongly again this year due to surging demand, both within China and without.

Prices are up between 20-50% this year alone. Surging demand has fueled a bidding war for supplies in a constrained market. With China holding some 85% of global refining capacity and the only mine to refined products supply chain, it not only has a unique position but a unique responsibility in the market.

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Walk down just about any major city in the United States and, eventually, you’ll walk past a city-installed garbage can.

Maybe you’ll see a classic black trash receptacle, with the black vertical paneling and open top. Or, maybe, you might see a trash receptacle with a top-side lid that opens and closes (like you might see down Chicago’s Magnificent Mile).

Whatever the case, at some point along the the line, the municipality procured those receptacles at a certain price.

city garbage and recycling cans

chaoss/Adobe Stock

The question is: how much should a garbage can cost?

A recent bit of news out of San Francisco got the MetalMiner team thinking.

Sick of not finding good price indexes for stainless steel? Check out the MetalMiner stainless steel should-cost model — detailed price-per-pound info for grade, form, alloy, gauge, width, cut to length adders, polish and finish adders.

San Francisco proposes paying up to $20K for trash can prototypes

As reported by San Francisco’s local CBS affiliate, the City of San Francisco’s Department of Public Works wants to replace 3,000 city garbage cans.

The catch? The prototype it is considering reportedly costs a whopping $20,000 per can.

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The past year since the last MetalMiner Forecasting Workshop has been a turbulent one for metals markets.

The onset of the COVID-19 pandemic, plummeting demand, plant idlings, fast-recovering demand in certain sectors, bullwhip effects, material shortages, rising prices, rising delivery premiums — on and on and on. For metals buyers, planning out metals spend — let alone getting any material at all — proved to be a challenging proposition.

But now, well over a year into the pandemic, economic conditions are improving, broadly, in the United States.

It’s time to take a look at the year ahead.

As MetalMiner CEO Lisa Reisman and Don Hauser, vice president, business solutions, noted during a recent ROTH Capital Partners webinar that we remain in a bull market for metals, even as some have recently shown signs of consolidation. Copper, for example, has fallen off after reaching an all-time high in May. Steel prices continue to rise, but at a less frenetic pace than previously.

So, what does it all mean for metals buyers planning out their spend for the year ahead?

MetalMiner 2022 Forecasting Workshop

MetalMiner Forecasting Workshop details

Industrial buying organizations can get a leg up on their budgeting and forecasting for the year ahead during this year’s virtual MetalMiner 2022 Forecasting Workshop, scheduled for 10 a.m.-1 p.m. CST, Aug. 25, 2021.

MetalMiner experts Reisman, Hauser, Editor-at-large Stuart Burns, Senior Forecast Analyst Maria Rosa Gobitz and Principal Data Analyst Marcos Briones Álvarez will lead the three-hour workshop.

Participants will gain insights into, among other things:

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This morning in metals news: the Biden administration today released a 250-page report detailing the findings of its 100-day supply chain review; meanwhile, the US steel capacity utilization rate ticked up to 82.3%; and, lastly, the U.S. goods and services deficit fell in April compared with the previous month.

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.

Biden administration releases 100-day supply chain review

supply chain chart

cacaroot/Adobe Stock

Earlier this year, President Joe Biden signed an executive order calling for 100-day reviews of critical U.S. supply chains. The reviews in question included those for things like critical minerals, semiconductors and high-capacity batteries.

The 100-day period has come and gone. Today, the administration released a 250-page report detailing its findings.

“The COVID-19 pandemic and resulting economic dislocation revealed long-standing vulnerabilities in our supply chains,” the report’s introduction states. “The pandemic’s drastic impacts on demand patterns for a range of medical products including essential medicines wreaked havoc on the U.S. healthcare system. As the world shifted to work and learn from home, it created a global semiconductor chip shortage impacting automotive, industrial, and communications products, among others.”

In addition to its deeper analysis, the report included six broad recommendations for strengthening U.S. supply chains:

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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 copper price developments, an upcoming MetalMiner webinar and more:

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

copper mine

Gary Whitton/Adobe Stock

Week of May 17-21 (copper prices, MetalMiner webinar and more)

All the metals intelligence you need in one user-friendly platform with unlimited usage — request a MetalMiner Insights platform demo.

This morning in metals news: consultancy GlobalData forecast copper production from the top 10 copper mining companies will rise by up to 3.8% this year; meanwhile, the US Senate Committee on Homeland Security and Governmental Affairs advanced a bill that aims to strengthen Buy American requirements; and, lastly, US import prices rose in April.

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

GlobalData: copper production from top 10 companies to rise by up to 3.8% in 2021

copper mine

Gary Whitton/Adobe Stock

Amid a run of record copper prices, increased copper production this year could take some of the steam out of the market.

According to London-based consultancy GlobalData, copper production from the top 10 copper mining companies in the world could rise by up to 3.8% this year.

Meanwhile, output from the 10 companies — which includes Glencore, Antofagasta, BHP and Freeport-McMoRan — fell by 0.2% in 2021, GlobalData reported Thursday.

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Temperance Beer Co. brewery in Evanston

Source: Temperance Beer Co.

A little over a year has come and gone since the COVID-19 pandemic took hold in the US.

In addition to the immense human toll, the pandemic has changed the way many people live their lives. Work situations have changed, as many have switched out commutes to the office for a morning commute to their living rooms or home office spaces.

Furthermore, consumption habits have changed, too.

In the early days of the pandemic, many stocked up on masks, hand sanitizer and toilet paper.

The pandemic also changed consumers’ habits in other areas. One example? Beverages, namely where they are consumed — that is, not in bars — and in what type of container.

Whereas patrons may have consumed draught beer poured from kegs at a bar, many switched to drinking out of aluminum cans at home.

Naturally, this led to a run on aluminum cans and what has seemed to be a continuous can shortage that persists even now, over a year later.

We chatted recently with Josh Gilbert, owner and founder of local brewery Temperance Beer Co., located at 2000 Dempster St. in Evanston, Illinois.

We talked about what the last year has been like for the business, the shift in consumer habits, the resulting shift in the brewery’s procurement and his outlook for the rest of 2021.

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

COVID-19 pandemic impact — from keg to aluminum can

For brewers, the COVID-19 pandemic has shaken up their businesses in a number of ways.

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A recent Telegraph article suggests the West is sleepwalking into missing the next industrial revolution as China voraciously buys up raw material assets around the world. Those assets include securing its future supplies of cobalt, copper, lithium and other metals. The aforementioned comes in addition to its current domination of rare earth metals.

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

China leads in race for raw materials

electric vehicle charging

kinwun/Adobe Stock

Although the Telegraph article focuses on the UK, the UK is not alone.

Other European countries, and even the US, are only just catching on to the perilous state of most Western economies’ reliance on very limited, and often hostile, supply sources for raw materials.

As the article reports, it takes seven years to plan and build a mine. In the last four years, China Molybdenum has plowed into the Democratic Republic of Congo’s 350 kilometer copper belt. The firm paid $2.6 billion (£2 billion) four years ago for the Tenke Fungurume mine from Freeport McMoRan.

It then expanded its empire in December, paying another $550 million for Freeport’s nearby Kisanfu mine. The mine gave it access to a further 6.3 million metric tons of copper. In addition, the mine offers access to 3.1 million metric tons of cobalt.

Chinese companies now dominate mining in the central African country that produces 70% of the world’s cobalt.

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Suez Canal

Menara Grafis/Adobe Stock

As the days went by and the disruption from the blockage of the Suez Canal by the container vessel Ever Given increased, the implications became more and more severe.

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Not all of those 360 vessels backed up waiting for the vessels to be freed are containing washing machines and laptops.

Suez Canal disruption

Some have live cargoes on board. Others have have ripening fruit. Lost cargoes will be significant, but may be worse for manufacturers will be the ongoing disruption.

ShippingWatch estimates it will take a week or more to clear the vessels back up into the Red Sea and Mediterranean.

But the damage has already been done.

Due to the non-arrival of vessels in both Europe and Asia, there will be trips out of both regions that are already being canceled (so-called blank sailings), because the container ships do not reach the ports on time and cannot unload and get new cargoes on board.

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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.

imports

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

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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