This morning in metals news: the U.S. consumed a record amount of renewable energy in 2020; U.S. housing starts jumped in May; and the copper price has been on the decline since peaking last month.
The U.S. consumed a record amount of renewable energy in 2020, the Energy Information Administration (EIA) reported.
“In 2020, consumption of renewable energy in the United States grew for the fifth year in a row, reaching a record high of 11.6 quadrillion British thermal units (Btu), or 12% of total U.S. energy consumption,” the EIA said. “Renewable energy was the only source of U.S. energy consumption that increased in 2020 from 2019; fossil fuel and nuclear consumption declined.”
Housing starts gain in May
Meanwhile, U.S. housing starts picked up in May from the previous month, the Census Bureau reported.
German integrated flats producer Salzgitter-Flachstahl has warned its customers of potential delays to deliveries after a lightning strike at the plant impacted steelmaking and rolling operations, a company official told MetalMiner.
The company sent a letter to its customers on June 9, explaining that a lightning strike at the weekend at a substation on site caused its blast furnace and convertor shops — as well as its hot strip mills — to operate at lower levels, the source said.
The incident completely halted all production for only one hour. However, the aftereffects caused various disruptions that continue to impact operations. Furthermore, the stoppage impacted in digital controls, electrical cable feeds and motors on production lines. In turn, that caused the plant to operate at lower levels, the source said.
He did not say, however, either at what capacity percentage Salzgitter-Flachstahl is now operating or in what areas. He also did not indicate what previous production levels were before the incident.
This morning in metals news: the U.S. and E.U. have reportedly reached a deal to end the long-running Airbus–Boeing dispute over state subsidies; meanwhile, U.S. steel capacity utilization touched 82.6% last week, the American Iron and Steel Institute reported; and, lastly, Cleveland-Cliffs announced increases to its second-quarter and full-year 2021 financial guidance.
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US, EU reach deal to end Airbus-Boeing dispute
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Allegations of state subsidies between the U.S. and E.U. vis-a-vis their respective aircraft manufacturers, Boeing and Airbus, have extended all the way back to 2004.
Now, the parties have reportedly reached a deal to end the dispute.
In 2019, the World Trade Organization authorized the U.S. to impose up to $7.5 billion in tariffs on E.U. goods. Meanwhile, last year, the WTO authorized the E.U. to impose $4 billion in tariffs on U.S. goods.
This morning in metals news: China auto sales cooled in May, according to the China Association of Automobile Manufacturers; production of crude oil and natural gas in New Mexico reached a record high in March; and, lastly, labor productivity fell in 13 of 29 service-providing industries in the U.S. last year.
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China auto sales drop
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China auto sales dropped in May on a year-over-year basis for the first time since March 2020.
Auto sales in China fell by 3.1% year over year in May 2021, the China Association of Automobile Manufacturers reported this month.
Furthermore, May sales declined by 5.5% month over month. May sales reached 2.13 million vehicles. For the January-May period, sales reached 10.88 million vehicles, up 36.6% year over year.
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 steel sector news, the Biden administration’s release of a 250-page supply chain report and much more:
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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 of June 7-11 (steel sector news, Biden administration’s supply chain review and more)
Aluminum prices retraced after peaking May 10, Maria Rosa Gobitz explained this week.
Earlier this week, the Biden administration released a 250-page report summarizing agency heads’ findings and recommendations after executing 100-day supply chain reviews.
Despite hopes that adverse conditions in the shipping market would ease, in many cases they’ve gotten worse, Stuart Burns explained.
Novelisis teaming up with a Chinese university to develop innovative uses for aluminum in the automotive sector.
Meanwhile, U.S. job openings reached a record high of 9.3 million in April, the Census Bureau reported.
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.
Tenaris steel plant in Pennsylvania resumes production
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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.
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
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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.
The Construction Monthly Metals Index (MMI) held flat for this month’s reading.
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US construction spending ticks up in April
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U.S. construction spending reached a seasonally adjusted annual rate of $1,524.2 billion in April, the Census Bureau reported.
The estimated April rate marked a 0.2% increase from the previous month and a 9.8% increase on a year-over-year basis.
Construction spending amounted to $452.3 billion during the first four months of the year, or up 5.8% from the same period in 2020.
Meanwhile, private construction spending reached a seasonally adjusted annual rate of $1,180.7 billion, up 0.4% from March. Under the umbrella of private construction, residential construction increased by 1.0% to a rate of $729.2 billion in April. Nonresidential construction fell by 0.5% to $451.4 billion in April.
Public construction spending fell 0.6% to $343.5 billion. Educational construction spending fell 0.5% to $84.8 billion. Highway construction rose 0.6% to $99.8 billion.
Construction employment declines in May
On the labor side, employment in the construction sector fell by 20,000 in May, the Census Bureau reported. Employment in construction is down by 225,000 from February 2020.
The Associated General Contractors of America noted contractors continue to struggle with unpredictability with respect to securing materials.
“Steadily worsening production and delivery delays have exceeded even the record cost increases for numerous materials as the biggest headache for many nonresidential contractors,” said Ken Simonson, the association’s chief economist. “If they can’t get the materials, they can’t put employees to work.”
ABI posts growth for third consecutive month
For the third straight month, the Architecture Billings Index, released monthly by the American Institute of Architects, showed growth (meaning an index value greater than 50).
After the onset of the pandemic, the ABI had contracted each month for a year until the February 2021 reading.
For April, the ABI checked in at 57.9, up from 55.6 the previous month. The design contracts index reached 61.7, up from 55.7 the previous month.
The ABI marked its highest level since before the Great Recession.
“Interest in new projects remained extremely strong as well, with the Inquiries score rising to 70.8, and the value of new signed design contracts reaching 61.7, the highest score in that index since data collection started in late 2010,” the ABI report stated. “This means that not only are clients talking to architecture firms about starting new projects, but that they are also signing contracts to begin that work at a high rate.”
By region, the Midwest led the way with an ABI reading of 60.6. Trailing the Midwest were the South (58.3), Northeast (55.0) and West (52.4).
As we’ve noted in this space on a regular basis, shortages and delays in receiving materials have had a ripple effect. The sudden surge in demand throughout some sectors has produced a bullwhip effect.
The ABI report noted the 0.8% jump in the Consumer Price Index from March to April and the 4.2% jump from April 2020 to April 2021, which marked the largest increases since before the Great Recession.
“In addition, core inflation rose by 0.9% in April, the largest increase in that indicator since 1981,” the ABI report notes. “Rising consumer prices at this time are largely caused by supply constraints due to a shortage of key inputs subsequently leading to production delays, and by rising demands for services, particularly travel and hospitality.”
Pending home sales drop in April
Meanwhile, in the housing market, pending home sales fell by 4.4% in April, the National Association of Realtors (NAR) reported.
“Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes,” said Lawrence Yun, NAR’s chief economist. “The upper-end market is still moving sharply as inventory is more plentiful there.”
Actual metals prices and trends
The Chinese rebar price dipped 0.7% month over month to $802 per metric ton. Meanwhile, the Chinese H-beam steel price fell 2.3% to $815 per metric ton.
The U.S. shredded scrap steel price rose by 3.2% to $450 per short ton.
The European 1050 commercial aluminum sheet price rose by 0.4% to $3,577 per metric ton.
This morning in metals news: as the U.S. economy reopened, job openings hit a record high in April; meanwhile, steel prices continue to rise; and, lastly, emissions from the electric power sector have declined as it has shifted from coal to natural gas.
The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.
Job openings hit record high in April
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U.S job openings reached a record high of 9.3 million on the last business day of April, the U.S. Census Bureau reported.
Hires, meanwhile, reached 6.1 million, little changed from the previous month.
“Total separations increased to 5.8 million,” the Census Bureau added. “Within separations, the quits rate reached a series high of 2.7 percent while the layoffs and discharges rate decreased to a series low of 1.0 percent.”
In durable goods manufacturing, separations increased by 7,000.
The Atlanta-based aluminum firm Novelisannounced it is partnering with China’s leading universities to conduct research into the innovative use of aluminum.
The partnership between Novelis’ Shanghai Customer Solution Center (CSC) and the Tsinghua University Suzhou Automotive Research Institute (TSARI), confirmed by way of a memorandum of understanding (MoU) will drive research and development of aluminum products to promote a “low carbon, sustainable future.”
Novelis is a subsidiary of India’s Hindalco Industries Ltd. The company accounts for almost half of Hindalco’s consolidated revenue.
Furthermore, with operations in 10 countries, Novelis is one of the largest aluminum recyclers in the world. It reported U.S. $11.2 billion in net sales for the most recent fiscal year.
The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.
Novelis in China
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However, Novelis already has a significant presence in China.
Back in May, for example, the aluminum major announced that it would supply Nissan with a sustainable, lightweight aluminum body sheet for the all-new Qashqai SUV and create a closed-loop recycling system in Europe.
