Industry News

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This morning in metals news, base metals got off to a solid start this week, Carpenter Technology Corporation enters into a supply agreement with a company that produces 3-D printing systems and zinc hits a two-week high.

Markets Start Monday with Strong Base

It was a good start to the week for base metals on the London Metal Exchange (LME).

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Prices closed Friday with an average increase of 0.4%, according to FastMarkets. Those metals kept the momentum rolling into this week (particularly lead, zinc and nickel).

LME prices increased by an average of 0.5%, with three-month copper prices up 0.3% and lead prices up 1%, according to FastMarkets.

Carpenter, Desktop Metal Enter Supply Relationship

Desktop Metal, Inc., which produces end-to-end metal 3-D printing systems, has entered into a supply relationship with Carpenter Technology Corporation, according to a NASDAQ release.

Carpenter Technology Corporation is a producer and distributor of premium specialty alloys, including titanium alloys, nickel and cobalt based superalloys, stainless steels, alloy steels and tool steels. Carpenter’s powder metals will be utilized in Desktop’s premium materials cartridges, according to the release.

The move is just another signal of the ongoing growth of the 3D-printing market and the method’s uses in a variety of applications.

Zinc Hits Two-Week High

Rather than start the week Monday sluggishly, zinc prices have ticked upward, reaching a two-week high, according to Reuters.

The rising price was driven by expectation of higher demand from steelmakers and LME inventories of zinc hitting nine-year lows, according to the Reuters report.

Free Download: The June 2017 MMI Report

London zinc prices rose 0.9%, to their highest price since June 2.

Meanwhile, mine closures led to China’s lowest output in more than two years. Chinese imports increased by by 21 percent in April, Reuters reported.

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The findings of the Trump administration’s ongoing Section 232 investigation into steel imports have yet to announced, but American metal producers are clearly anxiously awaiting the probe’s findings.

Earlier this week, White House spokesman Sean Spicer said the findings of the investigation could be released as early as this week (they have not been released yet).

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The investigation, launched by the Trump administration and announced in April, seeks to determine whether steel imports pose a national security threat. (For more background on the investigation, read our Lisa Reisman’s post earlier this week about the 232 investigation’s potential outcomes and impact).

Section 232 investigations are rooted in the authority of the Trade Expansion Act of 1962. At their conclusion, the president can either agree or disagree with the recommendations set forth by the secretary of commerce (Wilbur Ross, in this case).

It’s not yet clear what the investigation’s findings will be, or what practical impacts, in terms of enacted policy, they will have.

But it’s clear that U.S. companies are anxious for the Trump administration to make good on campaign promises to bolster American industry.

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Before we head into the weekend, let’s take a look back at a few of this week’s stories:

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A Surprise in the U.K.

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Our Stuart Burns wrote about the U.K. parliamentary elections, which surprised many and saw Labour outperform expectations against Prime Minister Theresa May’s Conservative Party.

What does the election result mean for business? Well, that will partially be determined by which path to Brexit the U.K. ultimately takes. Burns writes there is likely to be compromise and a search for alternate solutions — that is, a softer Brexit.

The 411 on 232

White House spokesman Sean Spicer announced Monday the findings of the administration’s Section 232 investigation into steel imports could be released as early this week.

Although the findings have yet to be released, our Lisa Reisman laid out the potential outcomes and impacts of the investigation on Wednesday.

How will the recommendations affect steel prices domestically? No one knows for sure, of course, but Reisman wrote we shouldn’t jump to conclusions about potential price increases.

“Some have speculated that the forthcoming recommendations would force prices higher, however, we would not necessarily rush to that same conclusion,” Reisman wrote.

Markets showing pessimistic side

Burns also wrote this week about commodities markets — and not just metals, but oil, too — which have seen a drop in optimism of late.

What’s the downtrend all about? Many reasons, Burns argues, including: oversupply, the Chinese government “squeezing investors by increasing shadow banking borrowing costs,” and waning optimism with respect to the Trump administration delivering on campaign promises regarding massive infrastructure projects.

But not to send you into your weekend on a down note — it’s not all cloudy skies.

“With that said, that doesn’t mean the U.S. or global economies are about to tank,” Burns writes. “European growth has been much better this year and Japan is expected to improve further, while the World Bank is predicting an unchanged 2.7% global growth this year in its latest report.”

June MMI Report Released This Week

In case you missed it, our monthly MMI Report was released this week; as always, it’s jam-packed with information.

The report covers markets trends in our 10 sub-indexes: Automotive, Aluminum, Construction, Copper, Global Precious, GOES (grain-oriented electrical steel), Rare Earths, Raw Steel, Renewables and Stainless Steel.

Want to know what’s happening in any of these categories? Get yourself up to speed by checking out the June report, which you can access by visiting the link below.

Free Download: The June 2017 MMI Report

Cobalt and lithium have big roles in the burgeoning electric-vehicle market, but they’re still subject to price volatility. scharfsinn86/Adobe Stock

This morning in metals news, demand for cobalt and lithium will only grow with the electric car industry, but price ups and downs are likely in the offing, too; London copper took a dip after the U.S. Federal Reserve’s interest rate hike announcement Wednesday; and the U.S. coal industry, in a world with less demand for coal as an energy product, might have to get creative. One writer suggests mining for coal — not for coal itself, but for rare-earth metals contained within it.

Cobalt, lithium markets growing with EVs, but could see fluctuation

One thing is certain: the electric-car industry is growing rapidly.

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According to a Reuters story Thursday by Andy Home, the number of electric cars on roads worldwide doubled last year to 2 million — but only accounted for 0.2% of the global total. However, estimates indicate that number will grow to 3% as soon as 2021 and 14% in 2025.

With that growth comes a need for certain kinds of metals, like cobalt and lithium.

But with a still relatively young electric-vehicle industry, what will demand for these metals look like in the near future?

Cobalt and lithium, for example, are on the “front-line” of the “green transport revolution, Home writes. But that means, to an extent, being subject to the whims of an industry in its early stages.

Large price hikes in lithium late last year and early this year have leveled off. Home added there could be further price volatility, as producers, analysts and traders try to construct consensus demand models.

Copper falls to one-week low

Copper on the London Metal Exchange (LME) dropped to a one-week low Thursday, on the heels of the U.S. Federal Reserve’s decision to hike interest rates for the second time this year, Reuters reported.

Copper fell to $5,462 per ton, according to the report.

Financial uncertainty in the U.S. and a slowing of the Chinese economy will put selling pressure on metals, according to a Kingdom Futures report quoted by Reuters.

Coal industry mining for … rare earths

Global coal production has declined each of the last three years. With a decline in demand, coal-mining operations have to adapt to a world increasingly powered by green energy.

The solution for some might be mining for coal, not for coal’s energy-producing properties, but for the rare-earth metals found within them, according to an article Thursday in Quartz. Per the article, China currently produces 90% of the world’s rare-earth metals.

It’s an interesting idea, even if author Akshat Rathi writes that his three ideas for extraction of rare-earth metals from coal are currently not economically feasible.

Free Download: The June 2017 MMI Report

But, as mentioned in yesterday’s This Morning in Metals post, producers have to adapt with the times. Whether we’re talking about copper producers looking for new markets for their copper or coal-mining operations mining for rare-earth metals found within coal, producers have to adjust or risk being left behind.

The market for biomedical metals — like the ones used in orthopedic implants — is expected to reach $34.9 billion by 2025, according to a recent market research report. Sandor Kacso/Adobe Stock

This morning in metals news, a recent report predicts the global biomedical metal market will reach $34.9 billion by 2025, palladium continues to stand strong and metal makers are looking for new markets for their products.

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Market for Biomedical Metals to Only Get Bigger

The market for biomedical metals is large — to put a number on it, it is expected to be valued at $34.9 million by 2025, according to a recent report from Accuray Research LLP.

According to the report, the biomedical metal market is expected to grow by a compound annual growth rate of 7.8% over the next decade.

Among the factors underpinning the expected growth are: increased demand for orthopedic implants; new developments in titanium-based alloys; and recent technical developments in biomedical metal.

Palladium Defies Analysts’ Expectations on Strong Run

At around $900 per ounce, palladium is trading at 16-year highs, according to a Platts report.

Analysts told Platts they saw no justification for palladium’s strength, especially considering a struggling Chinese automotive market (palladium is an important autocatalyst ingredient in gas-powered engines).

One Japanese analyst told Platts the current state of the palladium market was a “once every decade” situation.

Is a reversal in palladium prices on the way? Only time will tell.

New Markets for Metals

According to an article Wednesday in Bloomberg, makers of metals are looking for new commercial uses for their products, particularly as a boom in Chinese demand for raw materials has tempered. In general, China’s intent to crack down on credit — particularly on the heels of May’s Moody’s downgrade — has led many to believe a negative impact for metals markets will follow.

To make up for the loss of Chinese demand, producers of metals are looking for new markets for their products.

What uses do producers have in mind?

According to Bloomberg, a few uses include fertilizer, salmon cages, electric-car batteries and household cleaning products, among others.

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Many expect growth to slow in China through the remainder of the year. As such, producers will have to get creative in finding new uses for their products, from cars to fertilizer and everything in between.

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This morning in metals news, copper slipped from its two-month high on the London Metal Exchange (LME), Canadian researchers have discovered a way to make metals processing greener and nickel hits its lowest price in a year.

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Copper Falls in Anticipation of Federal Reserve Interest Rate Decision

Copper fell from a two-month high on the LME — and dropped 1.1% on the Shanghai Futures Exchange — ahead of the U.S. Federal Reserve’s decision this week regarding raising the interest rate (which many expect it to do), Reuters reported.

The decision is scheduled to be announced Wednesday afternoon, after the conclusion of a two-day policy meeting.

An uptick in the interest rate is expected to shore up the dollar, making dollar-based commodities more expensive for holders of other currencies and leading to a dip in demand, Reuters reported.

Researchers Announce Environmentally Friendlier Way to Process Metals

A Canadian team of researchers recently announced a new method for processing metals without toxic chemicals or reagents, Science Daily reported.

The team outlined its approach in a recently published article in Science Advances. Through their method, the scientists seek to perfect a process that curbs the negative environmental impacts of processing metals, using easily recyclable compounds instead of toxic materials.

The discovery was the result of a collaboration between Jean-Philip Lumb and Tomislav Friscic at McGill University in Montreal, and Kim Baines of Western University in London, Ont.

As demand for electric vehicles grows and green initiatives become more visible, it’s not surprising to see movement toward making the entire production process going green — for example, from the processing of raw metals all the way to a final product itself (a “green” vehicle).

Nickel Falls to One-Year Low

It isn’t a good time for nickel, which fell to its lowest price in a year Tuesday in a climate of falling Chinese steel prices and a weak forecast for the Chinese economy, Reuters reported.

As the Chinese government tackles credit debts — the nation was recently downgraded by rating agency Moody’s for the first time since 1989 — many expect growth to slow in the second half of the year. That prediction has already been borne out by weak April and May Chinese economic data, according to the article.

Caroline Bain, chief commodities economist at Capital Economics in London, told Reuters that China’s efforts to rein in credit growth and curb excessive behavior on the property market is “bad news” for metals.

Free Download: The May 2017 MMI Report

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This morning in metals news, a French bank has sued a metals broker for $32 million over alleged fraudulent receipts; aluminum, copper and lead take a fall in India; and copper hit a five-week high on the London Metal Exchange (LME) as a result of constrained supply from Chile and strong demand in China.

Alleged Fraudulent Receipts at Heart of French Lawsuit

French bank Natixis has filed a lawsuit against metals broker Marex Spectron over alleged fraudulent receipts, Reuters reports.

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According to a court filing, the $32 million lawsuit is over fraudulent receipts for nickel stored at warehouses in Asia run by a unit of commodities giant Glencore, Reuters reported.

Marex Spectron contested the claim in a statement. Natixis seeks damages because it alleges it provided finance based on fake receipts in a deal arranged by Marex Spectron.

Base Metals Take a Tumble in India

A trio of metals took a fall as a result of “muted demand,” according to the Economic Times.

Aluminum, copper and lead fell in India as a result of speculators offloading positions, according to analysts in the Economic Times report.

Copper Prices Move Up on LME

While copper was down in India, prices were up elsewhere, according to Reuters.

According to the report, copper hit a five-week high on the LME, “helped by concerns over supply from Chile, recent data pointing to robust import demand in China and falling stocks of the metal.”

Three-month copper on the London Metal Exchange (LME) hit its highest price since early May.

Free Download: The May 2017 MMI Report

Editor’s Note: This is the first of two posts from our Sohrab Darabshaw on the renewables industry in India. Check back tomorrow for Part 2. 

Energy experts, the domestic media, research organizations and even representatives of other governments seem pretty sure that India is the next green-energy giant in the making (U.S. President Donald Trump’s recent assertions notwithstanding).

Two-Month Trial: Metal Buying Outlook

Trump, while announcing his country’s intention to withdraw from the Paris climate accord, justified it on the grounds that the agreement was unfair to the U.S., and that it was skewed unfairly in favour of developing countries, such as India.

In the wake of that move, many in the Indian media have pointed out that a fact that the Trump administration seemed to have missed was that while India was the third-largest contributor to carbon emissions today, the U.S. was the second. The U.S.’s per capita carbon emission was still significantly higher than other large countries, according to data from the World Bank, and far higher than that of both India and China, according to a report in the online publication Scroll.

Not many within or outside the country are doubting India’s stated aim of ensuring that 40% of energy used would come from non-fossil fuels and rapidly developing renewable energy sources by 2030.

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It was a busy week in the world. On Thursday alone there were elections in the U.K. (which resulted in a hung parliament) and former FBI Director James Comey testified before the Senate Intelligence Committee.

Before we head into the weekend, let’s look back at the top storylines in metals news on MetalMiner this week:

Climate of Corruption Tempers Comeback Optimism in Brazil

Speaking of politics, our Stuart Burns wrote about Brazil and its efforts to push its way out of the doldrums of a recession, while also struggling with the specter of corruption.

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One year after former President Dilma Rousseff was impeached, her successor, Michel Temer, is facing questions about corruption. The BBC reported Thursday Brazilian judges have chosen to delay voting on a case that could in fact send Temer packing (an outcome which would continue a period of presidential instability in Brazil).

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This morning in metals news, copper prices made a bit of a comeback on Thursday, gold neared a 2017 high and a Japanese steel plate manufacturer is asking the U.S. Court of International Trade to reconsider the scope of anti-dumping and countervailing duties with respect to tool steel.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Copper Bounces Back

After a downward trend for copper, the metal showed signs of recovery on Thursday, according to a Reuters report.

Reports of strong imports and exports in China for May helped give copper a boost after a three-week low this week.

However, analysts indicated that upside for the metal is limited. Given analysts’  expectations of a Chinese growth slowdown in the second half of 2017, among other factors, it would not surprise to see copper experience setbacks throughout the remainder of the calendar year.

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