Industry News

photonewman/Adobe Stock

This morning in metals news, the LME aluminum price has tracked back down after spiking last Wednesday, U.S. steel import permit applications fell in September and a Chilean state-owned miner is in talks to sell copper to China’s Minmetals.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

LME Aluminum Hits One-Week Low

The London aluminum price has come back down after surging last week, when news of Norsk Hydro’s decision to shut down its Alunorte alumina refinery sent prices rising.

However, after being granted a permit to use new technology related to waste disposal at the refinery, Alunorte is set to resume operation, Reuters reported, and the aluminum price has retraced to a one-week low.

MetalMiner’s Take: LME aluminum prices decreased, falling again to their previous levels.

Alumina supply concerns moved the LME aluminum price out of its price range. Despite the sharp downtrend, LME aluminum prices do not seem to be in a bear trend. Selling trading volume does not support the downtrend in prices, meaning that prices are just retracing.

LME aluminum prices seem less volatile than other base metals, but they react sharply to news of supply concerns.

Steel Imports Down 10.6% in YTD

U.S. steel imports have dropped 10.6% in the year to date, the Times of Northwest Indiana reported (citing American Iron and Steel Institute data).

According to the report, September steel import market share hit 21%.

Codelco in Talks for Copper Supply Deal with Minmetals

Chilean state-owned miner Codelco is in talks to enter into a copper supply deal with China’s Minmetals, Reuters reported.

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

According to the report, the miner is in talks to enter a three-year supply deal with the Chinese firm, providing 60,000 tons of copper per year.

Alexander Chudaev/Adobe Stock

This morning in metals news, Norsk Hydro plans to restart its Alunorte alumina refinery, Shanghai steel rebar prices fell and Turkey plans to impose steel import quotas.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Aluminum Prices Back Down

After surging last week on news of Norsk Hydro’s shutdown of its Alunorte alumina refinery, aluminum prices have come back down on the latest Alunorte.

According to Reuters, Norsk Hydro plans to restart the refinery after having acquired a permit to use technology that would extend the life of the refinery’s disposal area.

MetalMiner’s Take: The news of Norsk Hydro planning to restart production in Alunorte drove LME aluminum back to its $1,970-$2,170/mt band.

Aluminum prices decreased on Monday for the second consecutive day as supply concern eases. LME aluminum prices increased sharply last Wednesday, driven by potential supply concerns. 

The recent aluminum peak was a reaction of alumina supply concerns. However, tightness in the aluminum market may support prices in the long term.

Shanghai Rebar Prices Drop

Shanghai steel rebar prices fell Monday on concerns of rising inventories, Reuters reported.

Turkey Plans to Impose Steel Import Quota

In response to what it says has been a surge in imports, Turkey plans to impose an additional 25% duty on imports exceeding planned quotas, according to a Reuters report.

For more efficient carbon steel buying strategies, take a free trial of MetalMiner’s Monthly Outlook!

In a World Trade Organization (WTO) filing, Turkey argued duties imposed by the U.S. and other countries have led to steel supplies being diverted to Turkey.

Aaron Kohr/Adobe Stock

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:

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

For more efficient carbon steel buying strategies, take a free trial of MetalMiner’s Monthly Outlook!

Pavel Ignatov/Adobe Stock

This morning in metals news, Brazilian authorities are questioning Norsk Hydro over its decision to halt operations at its Alunorte alumina refinery, the ThyssenkruppTata Steel merger could be subject to merger control regulation and BHP says China’s Belt and Road Initiative could lead to a surge in copper demand.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Para Surprised by Hydro Decision

According to a Reuters report, the Brazilian state of Para was surprised by Norsk Hydro’s recent move to shut down operations at its Alunorte alumina refinery.

Following the move, aluminum prices have skyrocketed this week (alumina is one of the materials used to produce aluminum). On Wednesday, aluminum prices jumped 2% to its highest level in more than a month.

BHP Says China’s Belt and Road Could Boost Copper Demand

Miner BHP said China’s Belt and Road Initiative could provide a boost of 7% of annual demand to copper, Reuters reported.

According to BHP’s analysis, the initiative represented one-third of the global economy and would yield $1.3 trillion in spending over the decade to 2023.

Merger Control Regulation Could be Coming for Tata-Thyssenkrupp

According to the Economic Times, the European Commission’s Official Journal notes the merger of the European operations of Thyssenkrupp and Tata Steel could be due for merger control regulation.

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

The merged operation would become the second-largest steel entity in Europe, behind only ArcelorMittal, should it become official.

The Renewables Monthly Metals Index (MMI) lost one point this month, falling for an October MMI reading of 103.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Rare Earths Removed From Final Tariff List

The U.S. Trade Representative’s office announced a list of Chinese products worth $200 billion that would be targeted for tariffs, a list that included a number of important materials for high-tech applications (including cobalt, cobalt oxides, cobalt sulfates and cobalt chlorides).

The final list, however, which went into effect late last month, did not include a number of rare earths materials that showed up on the original list.

However, a number of cobalt products remained on the final list.

Harnessing the Power of the Sea

As interest and demand in renewable energy continues to grow, so, too, is innovation in the field.

Physics World recently reported on the development of a device that serves to triple the amplitude of a water wave.

According to the report, the circular device deploys vertical metal sheets to concentrate the wave in a shallow space.

Renewable Momentum

Speaking of interest in renewable energy, a Stratfor report surveys the rise in interest at the corporate level.

While listing corporations that have announced intentions to shift toward renewable energy (or have already done so), the report name drops a couple of metals industry players.

“For instance, metals giant Alcoa sources 75 percent of the energy required for its smelters from renewables, while mining giant Rio Tinto acquires just under half of its energy from such sources,” the report states.

For more efficient carbon steel buying strategies, take a free trial of MetalMiner’s Monthly Outlook!

Actual Metal Prices and Trends

Japanese steel plate fell 2.1% to $755.73/mt. Korean steel plate fell 0.2% to $675.67/mt. Chinese steel plate also posted a slight drop, falling to $716.11/mt.

U.S. steel plate fell 0.5% to $992/mt.

U.S. grain-oriented electrical steel coil dropped 10.3% to $2,478.

Chinese neodymium fell 0.4% to $59,311.60/mt. Chinese silicon also fell, down to $1,499.17/mt. Chinese cobalt cathodes fell 0.4% to $96,790.80/mt.

buhanovskiy/AdobeStock

This morning in metals news, U.S. Steel contract talks continue with its workers, aluminum prices continued to rise today after a big surge yesterday and U.S. steel import permit applications dropped significantly in September.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

U.S. Steel Pulls Back From Some Proposals in Contract Talks

According to a report by the Times of Northwest Indiana, U.S. Steel has pulled back from some proposals in its contract talks with USW that had the union on the brink of a strike.

MetalMiner’s Take: Buying organizations need to pay much closer attention to labor disputes and production disruptions with tariffs in play. Yesterday, Norsk Hydro shut down its Alunorte alumina refinery plant in Brazil due to an environmental dispute. The shutdown sent aluminum prices soaring by over 2% yesterday and prices remain supported today. Any potential strike at either ArcelorMittal or U.S. Steel could have a similar impact on steel prices.

Aluminum Prices Continue to Rise

Aluminum prices surged yesterday, and continued to rise Thursday, MarketWatch reported.

The price continues to rise on Thursday after news of Norsk Hydro’s plans to close its Alunorte alumina refinery in Brazil.

MetalMiner’s Take: LME aluminum prices rose sharply yesterday, driven by demand concerns. News of a potential closure in the word’s largest alumina refinery in Brazil helped the boost in aluminum prices, as this could create a larger shortage of the metal.

LME aluminum prices have been trading sideways since July. LME aluminum prices increased again, showing a strong uptrend. Trading volumes also seem supportive of this uptrend.

We will see LME aluminum prices continue to increase in the upcoming days, unless supply concerns ease.

Steel Import Permit Applications Down 7.6%

Steel import permit applications fell 7.6% last month compared to August totals, according to a recent American Iron and Steel Institute (AISI) report.

The report, which cites the Department of Commerce’s Steel Import Monitoring and Analysis data, says applications for September totaled 2,739,000 net tons.

ronniechua/Adobe Stock

This morning in metals news, the Aluminum Association expressed its disappointment in the United States-Mexico-Canada Agreement (USMCA), the Pentagon is reviewing the U.S.’s dependence on foreign sources of critical materials (including rare earths from China) and Section 232 steel tariff exemption requests continue to rise.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Section 232 Aluminum Tariff

Not everybody was happy with the recently hailed United States-Mexico-Canada Agreement (the agreed-upon rebrand of the North American Free Trade Agreement, or NAFTA).

The Aluminum Association on Monday expressed its disappointment that the deal did not address the Section 232 aluminum tariff, which continues to apply to both Canada and Mexico.

“The Aluminum Association is disappointed that the Section 232 aluminum tariffs were not addressed as a part of the United States-Mexico-Canada Agreement (USMCA),” Aluminum Association President and CEO Heidi Brock said. “Now is the time for the United States to work with Canada and Mexico to provide a full exemption – without quotas – for aluminum imports from those countries. This should occur as soon as possible, and certainly before the final agreement is signed.”

MetalMiner’s Take: A confluence of factors continue to significantly impact aluminum prices and availability.

In terms of availability, Hydro’s Alunorte alumina refinery in Brazil has halted production due to an environmental dispute with the Brazilian government (alumina is the key raw material used to make aluminum). This sent aluminum prices up by 2% today.

The fact that the newly negotiated USMCA did not address the 232 tariffs on aluminum means the 10% tariffs on Canadian aluminum remain intact, which will also continue to support aluminum prices. Buying organizations are now experiencing a real tightness for semi-finished materials and many must source offshore or via Canada to meet manufacturing production schedules. The sanctions on Rusal also go into full effect Oct. 23.

Pentagon Reviewing Sources of Critical Materials

It’s no secret that the U.S depends on foreign sources for a number of critical materials, including, among others, rare earths from China (used in a wide variety of high-tech applications).

According to a Reuters report, the Pentagon is reviewing the U.S.’s dependence on certain critical materials, with plans to eventually release a report of its findings. In addition, the report indicates China will serve as a primary focus of the review.

Exemptions Continue to Rise

Requests from U.S. firms looking to win exemptions from the U.S.’s 25% steel tariff have continued to pour in, even into October, seemingly far exceeding what the Department of Commerce had initially expected when the process began in June.

For more efficient carbon steel buying strategies, take a free trial of MetalMiner’s Monthly Outlook!

According to a MarketWatch report, as of Oct. 1. 35,872 steel tariff exemption requests had been filed, with 5,954 requests having been approved (9,057 decisions have been posted).

ronniechua/Adobe Stock

You have to ask, after all the damage that America’s threats to rip up the North American Free Trade Agreement (NAFTA) has done to the relationship between the three member countries, whether the eventual outcome this week was worth it.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Naturally enough, politicians, being politicians, are all hailing the resulting deal as win for all concerned. To ring the changes, they have even come up with a snappy new name: the United States-Mexico Canada Agreement (USMCA), which must have taken all of 10 minutes to concoct.

To come into effect, the USMCA must be ratified by each country’s Congress, which will prove tricky as a new administration takes over in Mexico Dec. 1 and the Republican-controlled Congress is facing mid-term elections next month – hence the Washington-enforced deadline of end September for a deal (otherwise, the U.S. and Mexico threatened to go it alone on their bilateral terms agreed in August).

So, what have the threats, taunts and accusations of the last few months achieved?

Read more

buhanovskiy/AdobeStock

This morning in metals news, steel production in China could be at a peak, Tesla missed its Model 3 weekly production target and U.S. steel capacity utilization hit 79.2% last week.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Steel Peak

According to a Bloomberg report, China is at peak steel this year, with a decline in production forecasted for next year.

The report cites studies by the Australian government, the world’s top iron ore producer.

Hitting the Brakes

Tesla has missed its weekly production target for its Model 3, Reuters reported, and cited tariffs for its struggles in the Chinese market.

However, the maker of electric vehicles produced 80,000 vehicles in Q3, according to the report.

Want to a see Cold Rolled price forecast? Get two monthly reports for free!

Capacity Utilization Rate Hits 79.2%

The U.S. steel capacity utilization rate hit 79.2% for the week ending Sept. 29, according to an American Iron and Steel Institute (AISI) report.

Year-to-date production is up 4.5% compared with the same time frame in 2017.

MetalMiner’s Take: U.S. steel capacity utilization rate seems to be increasing, reaching 79.2% at the end of September.

In 2017, capacity utilization rate for the same week was 73.4%. An increasing capacity utilization rate is driving lower steel imports in the U.S., which fell 1% from July to August.

Higher domestic production may move domestic steel prices lower. Supply concerns are easing; however, the potential ArcelorMittal disruption could create uncertainty again and move domestic steel prices higher.

ronniechua/Adobe Stock

This morning in metals news, the U.S. and Canada have reached a deal on the North American Free Trade Agreement (NAFTA) after several weeks of talks, Secretary of Commerce Wilbur Ross said the steel and aluminum tariffs on Canada and Mexico will remain in place, and copper prices are down on account of perceived drops in Chinese demand.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Just in Time

In before a Washington-imposed deadline, Canada and the U.S. reached a deal on NAFTA late Sunday, which would keep the deal a trilateral arrangement (the U.S. and Mexico reached a preliminary agreement in August). The new deal is being called the United States-Mexico-Canada Agreement (USMCA).

“Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico,” President Donald Trump tweeted. “The new name will be The United States Mexico Canada Agreement, or USMCA. It is a great deal for all three countries, solves the many … deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the U.S. and will bring all three Great Nations together in competition with the rest of the world. The USMCA is a historic transaction!”

United States Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland released a joint statement on the deal.

“Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st Century: the United States-Mexico-Canada Agreement (USMCA). USMCA will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region.  It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.

“We look forward to further deepening our close economic ties when this new agreement enters into force.

“We would like to thank Mexican Economy Secretary Ildefonso Guajardo for his close collaboration over the past 13 months.”

Among the hangups for the U.S. in talks with Canada were dairy tariffs; however, the deal offers good news for U.S. dairy farmers, as it gives the U.S. greater access to the Canadian market.

Metals Tariffs Staying in Place

Even after the U.S. and Mexico reached their preliminary deal in August, questions remained regarding the U.S.’s Section 232 metals tariffs and whether they would remain in place with respect to Mexico (and Canada).

According to Secretary of Commerce Wilbur Ross, the new NAFTA — or USMCA, as it’s being called — will not result in the removal of the tariffs. Canada and Mexico initially had temporary exemptions to the steel and aluminum tariffs, but the exemptions were eventually allowed to expire June 1.

“There are problems specific to steel and aluminum relating to our national defense, and at this point of time, those stay the same,” Ross told Fox Business Network, as quoted by MarketWatch.

Lower your aluminum spend – Take a free trial of MetalMiner’s Monthly Outlook!

Copper Slides on China Demand

Copper prices dropped on some not-so-positive news regarding Chinese demand, Reuters reported.

MetalMiner’s Take: A stream of bearish news out of China is having its impact on commodity prices.

For example, copper has shown weakness despite evidence from falling LME inventory that demand outside China remains firm.

Through the first five months of this year, China’s fixed-asset investment — a core driver of Chinese growth that includes spending on new buildings, machinery and infrastructure — grew at its slowest annual pace since at least 1995. Retail sales, an indicator of consumer demand, also increased at their slowest pace since 2003.

Investors are taking multiple data points indicating weakening demand and extrapolating slowing copper demand in the world’s largest consumer. Whether they are right depends in large part on the outcome of the current trade war with the U.S., to which an early resolution seems unlikely.