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This morning in metals news, the U.S.’s steel capacity utilization rate is 80.3% for the year through Nov. 9, up to 40 layoffs are coming at U.S. Steel’s Minnesota taconite operations and a South African steel plant operated by ArcelorMittal is being shut down.

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Capacity Utilization Reaches 80.3%

The U.S. steel industry’s capacity utilization rate reached 80.5% for the week ending Nov. 9, according to the American Iron and Steel Institute (AISI).

Capacity utilization for the year to date was 80.3%.

The sector produced 1.86 million tons of steel for the week ending Nov. 9, down 2.2% on a year-over-year basis and down 1.4% from the previous week.

Up to 40 Layoffs Coming at U.S. Steel’s Minnesota Plants

Challenging market conditions are prompting U.S. Steel to lay off up to 40 nonunion workers at two Minnesota taconite plants, the Minneapolis Star-Tribune reported.

According to the report, the Minntac and Keetac mines employ a total of approximately 2,200 workers.

ArcelorMittal to Shutter Saldanha Plant

Steelmaker ArcelorMittal will close its Saldanha steel plant in South Africa, India Today reported.

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“This difficult decision was taken in the context of constructive ongoing engagements with key stakeholders, including government and organised labour, to find alternative solutions to the dire situation in the South African steel industry,” the company was quoted as saying.

The Global Precious Monthly Metals Index (MMI) jumped six points this month, rising for a November MMI reading of 113.

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Palladium-Platinum Spread Widens

As noted here many times before, platinum had historically traded at a premium to palladium.

That relationship, however, flipped as of September 2017, and has remained flipped ever since.

The palladium-platinum spread widened this month, even as platinum made gains.

The spread rose to $850/mt this month, up from $763/mt last month.

Looking Ahead

Gold and silver enjoyed a strong run-up during the summer season, but what is ahead for the precious metals?

“Having risen into the summer, gold and silver prices have plateaued in Q3 even as some ETFs have seen strong inflows due to accommodative monetary policies, such as falling Fed rates and safe haven buying in the face of geopolitical uncertainty,” MetalMiner’s Stuart Burns explained. “But jewelry demand is down, central bank buying of gold is lower than the same time last year and a strong dollar set up a number of headwinds that have seen prices unwind as news comes out about a possible winding back of tariffs between the US and China.”

As for platinum, prices did not tick up as much as one might have expected given trends in the automotive industry.

“Likewise, platinum prices have failed to make any headway in Q3 despite a strong showing from other PGMs, such as palladium and rhodium, both of which continue to benefit from the switch to petrol internal combustion engines among European carmakers,” Burns added.

“Gold, silver and palladium prices are expected to ease further in the run up to the year-end while other PGMs will be swayed more by car production and dollar strength. Much will depend on a successful outcome to the encouraging progress on trade talks, which could see investors take a more bullish attitude on risk to industrial metals and weaken demand for safe-haven investment metals.”

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Actual Metal Prices and Trends

The U.S. silver ingot/bar price rose 5.0% month over month to $18.08/ounce as of Nov. 1.

U.S. platinum bars rose 6.3% to $930/ounce. U.S. palladium bars jumped 8.7% to $1,780/ounce.

Chinese gold bullion rose 1.7% to $48.79/gram. U.S. gold bullion increased 2.3% to $1,512.70/ounce.