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The Stainless Monthly Metals Index (MMI) increased by 8.2% for this month’s reading.

August 2021 Stainless MMI chart

Stop obsessing about the actual forecasted nickel price — it’s more important to spot the trend

Outokumpu demand outlook

Stainless steel producer Outokumpu released its half-year report, reporting that their sales increased by 16.8% for the first half of 2021 compared to last year.

The company said second-quarter stainless steel demand continued to be strong.

“Total stainless steel deliveries grew by 3% and realized prices for stainless steel increased in all regions compared to the previous quarter,” Outokumpu said.

Despite a growing first half, Outokumpu expects global apparent consumption of stainless steel flat products to fall by 0.4% in the third quarter of 2021 compared to the previous quarter. The company’s outlook is based on CRU latest estimates, which anticipates a decrease in consumption of 10.5% and 0.7% in EMEA and Americas respectively, while APAC is expected to increase by 1.6%.

Moreover, Reuters reported Outokumpu CEO Heikki Malinen sees “demand for stainless steel and ferrochrome continuing to be strong and delivery volumes falling only due to planned maintenance.”

MetalMiner stainless steel expert Katie Benchina Olsen expects a tight U.S. stainless flat-rolled supply through the rest of the year. That will continue into at least the second quarter of 2022, she says. Imports into the U.S. are also limited, as demand in home markets remains strong. In addition, shipping containers are in tight supply.

This domestic environment might keep stainless steel prices high through the first half of 2022.

Nickel price surge

Similarly to copper, market fundamentals have influenced nickel prices lately.

The nickel market recorded a deficit of 42,700 metric tons for the January to May period after an approximate surplus of 92,700 metric tons for all of 2020, according to the World Bureau of Metal Statistics (WBMS). While refinery output increased, demand has outpaced refined production, thus bringing prices up.

Chinese refined output for the January to May period increased by 44,000 metric tons compared to 2020, WBMS reported. Meanwhile, apparent demand reached 564,900 metric tons (123,000 metric tons higher than in the previous year). In Indonesia, production in the first five months of 2021 rose 49% year over year and demand more than doubled.

The nickel price has increased by 19.8% in the year to date, closing July at $19,855/mt.

Be prepared to use 304 for 301, 201 and even 430 applications

Manufacturers are being forced to buy 304 at the spot price in order to keep production lines running.

For example, 301, 201 and 430 are in short supply. In the past, another service center or mill could compensate for late contract orders. However, this is no longer the case. The aforementioned 301, 201 and 430 are only produced based on contractual commitments.

When the mill is late, the only alternative right now is 304 — at a huge price premium.

Ultimately, the global stainless supply shortage will impact such products as commercial ovens, which are usually made with 430. The price differential between 430 and 304 should theoretically be around $0.65/lb at present. In reality, however, buyers are paying around $2.00/lb more for 304 on the spot market compared to the 2021 430 contract price.

Manufacturers are being forced to choose high-priced 304 to remain in production or shut down lines until the contracted material arrives.

Actual metals prices and trends

The Allegheny Ludlum 304 stainless surcharge ticked up by 4.9% month over month to $1.07 per pound this month. Meanwhile, the Allegheny Ludlum 316 surcharge surged to $1.57 per pound.

Chinese 316 cold rolled coil increased 13.0% to $4,411 per metric ton as of Aug. 1. Meanwhile, 304 cold-rolled coil surged by 17.2% to $3,359 per metric ton. Chinese primary nickel surged by 6.5% to $22,458 per metric ton.

LME three-month nickel jumped 7.8% to $19,885 per metric ton.

Indian primary nickel rose by 10.2% to $20.05 per kilogram.

Check if your service center is providing you with price transparency for your stainless spend (e.g. base price + adders).

The Renewables Monthly Metals Index (MMI) dipped by 0.8% for this month’s index reading.

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

June 2021 Renewables MMI chart

(Editor’s note: This report also includes the MMI for grain-oriented electrical steel, or GOES.)

Cobalt price falls

Earlier this year, the LME cobalt price surged as high as nearly $53,000 per metric ton.

As Stuart Burns noted last month, battery demand helped drive up the cobalt price in the first quarter.

However, the second quarter has been a different ballgame.

The LME cobalt price closed Monday at $42,500 per metric ton, or down approximately 20%.

G7 summit highlights climate goals

G7 leaders convened in Cornwall in the United Kingdom for the 47th G7 Summit from June 11-13.

Among a variety of issues, leaders of the G7 member states affirmed their commitments toward tackling climate change.

In a communiqué released after the summit, the leaders committed to supporting a “green revolution” that creates jobs, cuts emissions and limits the rise in global temperatures to 1.5 degrees.

“We commit to net zero no later than 2050, halving our collective emissions over the two decades to 2030, increasing and improving climate finance to 2025; and to conserve or protect at least 30 percent of our land and oceans by 2030,” the communiqué reads. “We acknowledge our duty to safeguard the planet for future generations.”

The leaders reconfirmed their commitment to the Paris Agreement. President Joe Biden brought the U.S. back into the agreement after former President Donald Trump had withdrawn from it.

The communiqué also highlighted the need to transition away from coal power and toward renewables.

“Recognising that coal power generation is the single biggest cause of greenhouse gas emissions, and consistent with this overall approach and our strengthened NDCs, domestically we have committed to rapidly scale-up technologies and policies that further accelerate the transition away from unabated coal capacity, consistent with our 2030 NDCs and net zero commitments,” the communiqué continues. “This transition must go hand in hand with policies and support for a just transition for affected workers, and sectors so that no person, group or geographic region is left behind.”

U.S. government to consider neodymium Section 232

The U.S. government could launch a Section 232 investigation covering neodymium magnets.

The Trump administration launched a Section 232 investigation in 2018 that resulted in tariffs on steel and aluminum.

Meanwhile, earlier this year, President Joe Biden earlier this year called for agency heads to initiate 100-day supply chain reviews. The reviews were to cover important materials including semiconductors, large-capacity batteries, pharmaceuticals and critical minerals.

This month, the Biden administration released a report with officials’ findings and recommendations.

“Neodymium (NdFeB) permanent magnets play a key role in motors and other devices, and are important to both defense and civilian industrial uses,” the report states. “Yet the U.S. is heavily dependent on imports for this critical product. We recommend that the Department of Commerce evaluate whether to initiate an investigation into neodymium permanent magnets under Section 232 of the Trade Expansion Act of 1962.”

Anglo American demerges thermal coal operation

Speaking of coal and the transition toward renewables, miner Anglo American announced it is demerging its thermal coal operations in South Africa.

“We have consistently believed in a responsible transition from thermal coal, being a transition that seeks to balance the needs and expectations of all stakeholders,” CEO Mark Cutifani said in a June 7 statement. “The demerger of Thungela lives up to that promise by bringing our employees, shareholders, host communities, host government and our customers along with us.”

Thungela will trade as an independent company on the Johannesburg Stock Exchange.

GOES MMI

The MMI for grain-oriented electrical steel (GOES) fell by 1.7% for this month’s reading.

June 2021 GOES MMI chart

In addition, the GOES coil price fell by 1.9% to $2,354 per metric ton.

Actual metals prices and trends

Within the Renewables MMI basket, the U.S. steel plate price rose by 7.8% month over month to $1,320 per short ton to open the month.

Meanwhile, Chinese steel plate dipped by 3.3% to $896 per metric ton. Korean steel plate jumped by 13.4% to $1,065 per metric ton. Lastly, Japanese steel plate fell 0.1% to $804 per metric ton.

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.

Happy New Year

Source: Adobe Stock/Geargodz

Firstly, we want to wish all of our readers a Happy New Year!

With that said, well — that’s that for 2020.

Last year was a tumultuous one to say the least.

The coronavirus pandemic dominated the world’s attentions for much of the year. Economies struggled amid dropping demand and supply-chain challenges.

The rollout of vaccines last month offered some hope, but there remains a long road ahead.

In case you missed it, we recapped the most-viewed stories on MetalMiner last week, plus the most-viewed steel, aluminum and copper stories.

But with that, we will officially turn the page on 2020. Once again, we wish all of our MetalMiner readers around the world a Happy New Year!

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

September 2020 housing starts in the U.S. got a big boost on a year-over-year basis, the Census Bureau and Department of Housing and Urban Development reported.

Privately owned housing starts increased 11.1% in September 2020 compared with September 2019.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

September 2020 housing starts up 1.9% from August

Furthermore, September 2020 housing starts gained 1.9% month over month.

Starts reached a seasonally adjusted annual rate of 1,415,000 in September.

Meanwhile, single-family housing starts in September hit at a rate of 1,108,000, or up 8.5% from August. In addition, the September rate for units in buildings with five units or more reached 295,000.

Read more

The fear, so far largely unfounded, at the start of the pandemic outbreak is that it would be bad for developed economies with well-funded health care systems but disastrous for developing economies with immature or underfunded health care systems.

The reality has been much more mixed.

Read more

Earlier this week, the Federal Reserve reported industrial production in March fell 5.4%, marking the largest drop since 1946.

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The coronavirus outbreak and ensuing mitigation efforts have also had a significant impact on the housing sector.

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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, including coverage of: oil prices, Section 232 steel tariffs, the gold market, PMI numbers, steel production and more.

Looking for metal price forecasting and data analysis in one easy-to-use platform? Inquire about MetalMiner Insights today!

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nordroden/Adobe Stock

Before we head into the weekend, let’s take a look back at the week that was and some of the metals coverage here on MetalMiner, including: the Federal Reserve’s recent industrial production report, the U.S.’s December boom in housing starts, the U.S. steel sector’s capacity utilization rate and the International Monetary Fund’s latest growth projections.

Looking for metal price forecasting and data analysis in one easy-to-use platform? Inquire about MetalMiner Insights today!

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buhanovskiy/AdobeStock

This morning in metals news, U.S. steel imports fell in August compared with July, House Speaker Nancy Pelosi called for the beginning of an impeachment inquiry of President Donald Trump and Indian mining companies are concerned about the impending expiration of leases for non-captive iron ore mines.

Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.

Steel Imports Drop

According to preliminary U.S. Census Bureau data, U.S. steel imports reached 1.8 million metric tons in August.

The August steel import level marked a decline from the 2.7 million metric tons imported in July.

Markets React to Impeachment Inquiry News

Democratic House Speaker Nancy Pelosi on Tuesday announced her intention to initiate impeachment inquiry regarding President Donald Trump.

As a result, stock markets dipped Tuesday morning, but recovered later in the day.

The CBOE’s volatility index, the VIX, reached a three-week high, ascending to 17.77 early Wednesday before dipping just below 17 later this morning.

Indian Companies Worry Over Mining Leases

According to the Economic Times, concerns abound in India regarding the expiration of 31 non-captive iron mines March 31.

Looking for metal price forecasting and data analysis in one easy-to-use platform? Inquire about MetalMiner Insights today!

RK Sharma, secretary general of the Federation of Indian Mineral Industries, told the Economic Times that the mines in question account for 45% of the domestic steel industry’s iron ore requirements.

natali_mis/Adobe Stock

A new Cold War — does that sound ridiculous? Does it sound alarmist?

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It would have been a month or more back, but today it is a plausible statement.

A post by Edward Luce in the Financial Times refers to a Bloomberg expose reporting on how China’s People’s Liberation Army has installed secret micro-chips on motherboards that were used to operate big corporate data servers, giving them unprecedented access to American military and technology secrets on an epic scale.

The microchips are said to be smaller than a grain of rice and thinner than the tip of a sharpened pencil, yet could provide backdoor access into the most secret of American technology. We quote Luce when we say, according to Bloomberg, China may have infiltrated U.S. military hardware, including drones, fighter jets, and so on.

It must be said, major retail hardware providers like Apple vehemently denied the existence of such malicious chips, but Bloomberg’s investigation has been going on for three years and begs the old saying — no smoke without fire.

The investigation apparently is still ongoing. But the consequences, coming on top of an escalating trade war and recent military skirmishes in the South China Sea, herald a new superpower rivalry.

There may be some who scoff at the suggestion that China could rival the U.S. as a superpower, but that is to misunderstand the trajectory of history.

China is on the rise, faster in terms of technology than it is even economically.

Take these secret microchips. As Luce points out, the creation and clandestine inclusion of such sophisticated technology is so hard to pull off that it was likened by a professional hacker to getting a unicorn to jump over a rainbow. It would take years, the article suggests and the deepest knowledge of how to manipulate the most cutting-edge technology across the global supply chain, for China to do this — yet, it did.

Roughly 75% of U.S. smartphones and 90% of semiconductors are made in China; it is safe to bet that domination is set to decline, but it can’t happen overnight.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

In a heated and politically charged scenario, it is not unrealistic to think government will mandate or reward firms that reshore technologically sensitive supply chains, with profound implications for what has become a hugely interdependent world.

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