Articles in Category: Supply & Demand

This morning in metals news: MetalMiner released its May MMO report earlier this week; US crude oil imports from OPEC are down; and the International Energy Agency issued a report on clean energy and the expected surge in critical mineral demand.

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

May 2021 MMO report

Earlier this week, MetalMiner released its May 2021 Monthly Metal Outlook (MMO) forecast report.

The report — available only to subscribers — offers detailed analysis of 10 key metals. The coverage includes support and resistance figures, price drivers, buying strategies and much more.

Visit the MMO landing page for more information.

US crude oil imports from OPEC decline

US crude oil imports from OPEC nations have declined, the Energy Information Administration reported.

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rare earths

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The Biden administration taken another step to ease China’s current stranglehold on the rare earth element (REE) sector.

These elements are a crucial ingredient in the manufacture of products for both civilians and the defense sector. Rare earths make their way into smartphones, computer hard drives, medical imaging equipment, electric vehicles, and missiles, aircraft guidance and control systems, radars, 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.

DOE awards $19M toward rare earths, critical minerals production

The US Department of Energy (DOE) recently earmarked US $19 million to fund 13 projects to produce REEs and critical minerals.

Sen. Mitt Romney cited China’s “near monopoly” on the sector and his state’s role in the US’s attempts to boost its own production.

“With this funding, Utah will continue to play a vital role in United States’ production of rare earth metals and critical minerals, which will help rebuild our supply chain and decrease our dependence on China,” Romney said.

Furthermore, China produces almost 70% of the world’s total supply of rare earth metals.

Those who will receive the funding include: Pennsylvania State University; Virginia Polytechnic Institute and State University; Collaborative Composite Solutions; and New Mexico Institute of Mining and Technology.

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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 rising global crude steel production, automotive sector developments and much more:

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steelmaking in an EAF

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Week of April 26-30 (global steel production, oil prices 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.

automotive sale in dealership

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According to a joint forecast released by J.D. Power and LMC Automotive, US new-vehicle retail sales in April 2021 are headed for the highest number ever recorded for that month.

The news will be some consolation to automakers, who have struggled with a semiconductor shortage. As a result of the shortage, General Motors, Ford, Stellantis, Honda and many others have had to idle production.

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New-vehicle retail sales set to hit record April

Despite the slowdown in output, US automotive sales surged in April.

According to a forecast released today by J.D. Power and LMC Automotive, new-vehicle retail sales in April are set to reach 1,325,500 units. Trucks and SUVs are expected to account for 76.1% of those sales.

That sales figure would mark a whopping 110.6% increase from April 2020 sales (when adjusted for selling days).

Meanwhile, the April sales forecast marked a 20.8% increase compared with April 2019 sales.

In addition, the automotive intelligence firms projected 1,479,800 units in total new sales. That would mark an increase of 107.1% from April 2020. When compared with April 2019, it is a 7.8% jump when adjusted for selling days.

The groups forecast the seasonally adjusted annualized rate (SAAR) for total new-vehicle sales to reach 18.1 million units. That would mark an increase of 9.4 million units from 2020 and 1.7 million units from 2019.

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Cautious production increases by OPEC+ and a strong business cycle upturn have encouraged bullish sentiment about downward pressure on oil inventories and upward pressure on the oil price in the second half of the year, Reuters columnist John Kemp reports in a recent post.

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Oil prices ease as infections rise in major importers Japan, India

oil price chart

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But prices have eased off last week and into this one. Initially, this came as caution rose over the prospect of output increases from shale producers. More recently, however, resurgent coronavirus infections in India and Japan, both major oil importers, have weighed on prices.

Despite growing optimism in the US and, to a lesser extent, in Europe, India’s oil demand remains in doubt.

India has posted several days of record-setting COVID-19 cases, with expectations they are going to get even worse. Bloomberg reports that demand for fuels could plunge by 20% in April.

It seems likely that new lockdowns could be in place for several weeks or even months. In turn, that would seriously impact Indian demand.

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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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The Raw Steels Monthly Metals Index (MMI) rose by 7.8% for this month’s reading, as steel prices continued to rise.

April 2021 Raw Steels MMI chart

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Steel price gains slow

As we’ve chronicled in this monthly column, steel prices have been rising consistently since last summer.

Buyers have struggled to find supply in what eventually became an allocation market.

Steel prices have posted double-digit percentage gains on a month-over-month basis. However, that ascent appears to be slowing somewhat.

The US hot rolled coil price, for example, continued to increase. The US HRC three-month price rose 20% month over month to $1,280 per short ton. However, the price has flattened out thus far in April.

Are steel prices finally reaching a peak? That is not yet clear, but price gains have certainly started to slow.

Supply developments

Speaking of allocation markets and tight supply, buyers will take some solace in the fact that some new supply will be coming on stream, both in the short and medium terms.

Work continues on Steel Dynamics’ new Sinton, Texas facility, which is scheduled to open by mid-year.

Excluding costs associated with investment in the Sinton flat rolled steel mill ($18 million), the company said it expected its first quarter earnings to be in the range of between $1.94 and $1.98 per diluted share, which it said could represent a record earnings quarter for the company.

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This morning in metals news: energy-related emissions from the US industrial sector fell by 8% in 2020; meanwhile, Chinese steel production remains strong despite production curbs in Tangshan; and, lastly, GlobalData forecast Chile’s copper production will rise by 3.7% this year.

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US industrial sector energy-related CO2 emissions fell 8% in 2020

Energy-related CO2 emissions in the US fell by 11% in 2020, the Energy Information Administration reported.

Furthermore, energy-related CO2 emissions fell for every end-use sector for the first time since 2012.

In addition, energy-related CO2 emissions from the industrial sector fell by 8%.

Chinese steel production remains strong despite curbs

Despite production cutbacks in China’s steelmaking hub of Tangshan, steel production in the country continues at a robust rate, the South China Morning Post reported.

According to the report, China’s blast furnace capacity utilization rate is at 87% after a slight increase.

GlobalData: Chile copper output to rise 3.7% in 2021

After an up-and-down 2020, Chile’s copper output is likely to pick back up this year.

GlobalData forecast Chile, the world’s top copper producer, will see output rise by 3.7% this year.

“Chile’s copper production is estimated to have declined by 0.7% in 2020,” said Vinneth Bajaj, associate project manager at GlobalData, in a release. “While the country’s mining sector avoided a full-scale lockdown as seen in neighboring Peru, operational restrictions and rising cases impacted the progress of various developments. For example, Codelco had to halt on-site construction activities at Chuquicamata and El Teniente, with rising cases leading to mounting pressure from workers and the temporary shutdown of Chuquicamata at the end of June 2020.”

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China story steel production

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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:

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

Week in Review, April 5-9 (steel capacity utilization, European steel’s challenges and more)

Find more insight on MetalMiner’s LinkedIn.

Greenland elections

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The Rare Earths Monthly Metals Index (MMI) fell by 1.9% for this month’s reading, as the Greenland elections this week could have significant ramifications for a rare earths project in the country.

April 2021 Rare Earths MMI chart

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

Left-wing party against rare earths mine wins Greenland elections

Rare earths mining stood front and center in Greenland’s elections earlier this week.

The left-wing Inuit Ataqatigiit party emerged victorious with 37% of the vote, Reuters reported.

What does Greenland’s election have to do with rare earths? The prevailing party ran on opposition to a mining project at Kvanefjeld on the southern tip of the island.

On its website, Australia-based Greenland Minerals Ltd. says the complex could be the most significant source of rare earths in the Western world.

Kvanefjeld offers “massive bulk resources,” the firm indicates, in addition to access to year-round direct shipping.

However, the election result could prove to be a significant blow to the site’s prospects.

Reuters quoted party leader Mute Egede, who said the project “won’t happen.”

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