Industry NewsMarket Analysis

earnings sign

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While the first half of 2020 posed significant challenges for metals manufacturers and end users alike, some firms have showed signs of recovery in the ensuing months and into 2021.

In the second quarter, steel demand suffered. Automotive manufacturers idled production in North America for a period of about two months last year, beginning in the tail end of the of the first quarter.

Nucor forecasts strong Q1 2021

The Charlotte-based steelmaker said it expects its first-quarter earnings could exceed $900 million.

By comparison, Nucor reported net earnings of $20.3 million in Q1 2020. In Q2 2020, the steelmaker reported net earnings of $108.9 million.

“We are encouraged by positive economic trends and the robust demand we are seeing across our markets,” Nucor President and CEO Leon Topalian said. “We currently expect our first quarter 2021 results to significantly exceed Nucor’s previous record for quarterly net earnings, set in 2008. As we move through 2021, we remain focused on building on our momentum, meeting and exceeding our customers’ needs, and delivering sustainable value creation for Nucor stockholders.”

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Rising prices

Earlier this month, Nucor Tubular Products announced a price hike in a letter to customers.

The company announced an at least 12% hike for sprinkler pipe products. In addition, A53 products would rise by at least $140.

“This increase is a result of rising raw material costs, strong demand, and volatility of transportation costs,” Nucor said in the price increase notice. “New orders, quotes and contracts not previously confirmed by Nucor will be subject to this increase.”

Overall, this quarter will likely prove much stronger than Q4 2020.

“The Company’s sheet, plate, bar and structural mills continue to forecast increased profitability in the first quarter of 2021 as compared to the fourth quarter of 2020,” Nucor reported. “Realized prices and shipment volumes have increased for Nucor’s steel mills in the first quarter as compared to the fourth quarter of 2020.”

In addition, Nucor said rising raw materials prices will boost the performance of that segment. Nucor owns the David J. Joseph Company, a scrap brokerage. The steelmaker also produces direct reduced iron (DRI), a steelmaking input.

US steel price gains

US steel prices have continued to rise well into 2021.

Hot rolled coil (HRC) closed Wednesday at $1,156 per short ton, or up 9.78% from a month ago. Meanwhile, cold rolled coil (CRC) is up 15.24% to $1,331 per short ton. Hot dipped galvanized (HDG) is up 11.29% to $1,439 per short ton.

Plate price gains have not been as significant; however, plate is up 5.28% to $1,036 per short ton.

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Ford logo

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After General Motors announced a series of electric vehicle and emissions targets last month, it is unsurprising that similar announcement from competitors have followed.

Today, Ford Motor Co. announced plans to charge ahead with its electrification plans in Europe.

Earlier this month, Ford announced it would invest an additional $29 billion in electric and autonomous vehicle development.

“The transformation of Ford is happening and so is our leadership of the EV revolution and development of autonomous driving,” Ford President and CEO Jim Farley said in a release Feb. 4.

In January, General Motors said it would invest nearly $800 million to upgrade its CAMI Assembly in Canada for the manufacture of EVs. Furthermore, GM said it would offer 30 all-electric models by mid-decade.

Ford ramps up electrification in Europe

Ford said it plans for 100 percent of its passenger vehicle range in Europe to be zero-emissions capable, all-electric or plug-in hybrid by 2026.

Furthermore, it plans to be completely all-electric by 2030.

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Manufacturing investment

The automaker plans to invest $1 billion to update its manufacturing facility in Cologne, Germany.

“The investment will transform the existing vehicle assembly operations into the Ford Cologne Electrification Center for the manufacture of electric vehicles, Ford’s first such facility in Europe,” Ford said today.

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robot building automotive aluminum component

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This morning in metals news: Novelis announced the commercial availability of a new class of high-strength automotive aluminum; meanwhile, the United States Geological Survey updated its Mineral Deposit Database for niobium; and the global aluminum market surplus more than tripled from 2019 to 2020.

Novelis announces new high-strength automotive aluminum

Atlanta-based Novelis today announced it will offer a new “ultra-high-strength” automotive aluminum solution.

The product, Novelis AdvanzTM 7UHS-s701, offers “lightweighting potential of up to 40% over existing ultra-high strength, hot-formed steel solutions.”

“The s701 technology represents the future of high-strength material in automotive applications and offers a clear alternative to the most advanced high-strength steel products,” said Philippe Meyer, senior vice president and chief technology officer at Novelis. “Aluminum is already the material of choice for lightweighting, and now we are offering a solution that helps automakers design even safer, lighter and better performing vehicles.”

Stop obsessing about the actual forecasted aluminum price. It’s more important to spot the trend

USGS updates database entry for niobium

The United States Geological Survey (USGS) has updated its database entry for the mineral niobium.

“Niobium is vital to many sectors of our infrastructure and manufacturing economy, and the United States is 100 percent reliant on other countries for it,” said Jeff Mauk, USGS lead scientist for USMIN. “Updates to our database can help weigh the potential for domestic niobium production against the need for future trade agreements.”

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ArcelorMittal sign in Ontario

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Impacts from the COVID pandemic and asset sales saw ArcelorMittal report a 20.4% decline in its crude steel production in 2020.

“The countries worst affected by COVID were the ones that saw drops in their production,” one industry watcher added about lower production at the group’s assets in Europe, Brazil and the United States.

ArcelorMittal output down 20.5%

ArcelorMitttal poured a total 71.5 million metric tons of liquid steel in the 12 months of 2020. Meanwhile, it poured almost 90 million metric tons in 2019, the group noted Feb. 11.

Shipments for the year came to 69.1 million metric tons, down 18.2% year on year from 84.5 million metric tons, ArcelorMittal added.

The Europe segment recorded a decline of 22.6% to 34 million metric tons from almost 44 million metric tons. Meanwhile, shipments in that segment fell to 32.8 million metric tons. That total marked a decline of 22.5% from 42.3 million metric tons.

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Demand boost

Improved demand from the automotive and manufacturing sectors pushed up crude production in the last quarter of 2020. Q4 2020 production rose by over 15% to 9.11 million metric tons from the 7.9 million metric tons produced in Q3.

Overhaul of a blast furnace in Belgium, however, offset that increase.

“Although the company has restarted capacity, some steel-making capacity during [Q4] remained idled, including a blast furnace at Ghent, Belgium, that is due to restart mid-February 2021 following a planned major reline,” the group said.

Higher flats demand also helped to boost quarter-on-quarter shipments 4.7% to 8.6 million metric tons from 8.2 million metric tons, ArcelorMittal added.

The December sale of ArcelorMittal USA to Cleveland Cliffs pushed down crude production in North America 18.7% to 17.8 million metric tons from almost 22 million metric tons, the group said.

Shipments for the year were down to 9.41 million metric tons, the group noted, reflecting a 15.9% decline from almost 11.2 million metric tons.

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February 2021 MMI title pageThis morning in metals news: the February 2021 Monthly Metals Index (MMI) report is out; meanwhile, US steel capacity utilization reached 76.9%; and, lastly, Rusal recently announced the acquisition of a German aluminum producer.

February 2021 MMI report

As regular readers know, we have published all 10 of our Monthly Metals Index (MMI) articles over the past two weeks.

The MMI series covers: Automotive, Construction, Rare Earths, Global Precious, Renewables/GOES, Aluminum, Copper, Raw Steels and Stainless.

Those interested in the MMI series can find this month’s reports compiled in PDF form — visit the MMI landing page for download details.

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US steel capacity utilization reaches 76.9%

The US steel sector’s capacity utilization rate for the week ending Feb. 13 reached 76.9%, the American Iron and Steel Institute (AISI) reported.

The rate marked a rise from 75.2% the previous week.

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Indonesia on a globe

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Electric vehicle manufacturers are wooing Indonesia to create a nickel-based battery supply chain in that country.

Elon Musk’s Tesla and China’s Contemporary Amperex Technology, otherwise known as CATL, and South Korea’s LG Chem are in the fray. 

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

Firms look to secure Indonesian nickel supply

A senior Indonesian government official told news agency Reuters the government had recently received Tesla’s investment proposal. 

Since early last year, Tesla has been courting Indonesia because for the value of its strategic commodities, including nickel. Nickel is a critical metal used in batteries for EVs due to its properties enabling mass energy storage capabilities. Furthermore, nickel reduces the overall cost of batteries by limiting the amount of cobalt required. 

Tesla seems to have come back to the Indonesian government with a reworked proposal to the one it had submitted in May 2020. The latter had shown reluctance in just signing a raw material supply agreement. 

The minister told reporters, while acknowledging Tesla had sent its proposal, that Tesla’s engagement in Indonesia would extend past raw materials. If Tesla only wants to take raw materials, then the government was not too keen in pursuing a partnership.

Indonesia is also talking to CATL and LG Chem regarding their plans to create an EV battery supply chain, the Nikkei Asia reported. 

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copper bars

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This morning in metals news: the copper price is on its way back up again; meanwhile, Rio Tinto reached a new power agreement for its ISAL aluminum smelter; and, lastly, oil prices continue to rise.

Copper price surges

After a sleepy January, copper prices are back on the ascent.

The LME three-month copper price closed last week at $8,251 per metric ton. The price marked its 2021 high and, furthermore, a more than eight-year high.

Copper — and other base metals — cooled in January ahead of the Lunar New Year celebrations in China.

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

Rio Tinto reaches new ISAL power agreement

Rio Tinto announced a new power agreement for its ISAL aluminum smelter in Iceland.

“Rio Tinto has reached agreement on an amended power contract that will allow the ISAL aluminium smelter in Iceland to continue operating with an improved competitive position,” the firm said.

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carbon footprint

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Although originally borrowed from a book of the same name, some call Australia the “Lucky Country.”  Blessed with resource abundance, a warm climate and decades of near uninterrupted growth, it certainly seems to have it all.

But it isn’t alone.

For decades, industrialized countries have looked at the Middle East’s oil wealth with some degree of envy. Those countries have also looked on with a little irritation, particularly when OPEC artificially engineers oil price rises to reap huge financial rewards for member states.

The United Arab Emirates seems to have the best of both vast oil wealth and the nous (to use the British slang) to invest the proceeds, not just in palaces and Rolls Royce cars but in infrastructure, education and diversified industrial development.

As the world potentially approaches peak oil — how many times have we heard that over the decades? — the UAE is already beginning to exploit its other near endless resource: sunlight.

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Carbon-free aluminum

The output from its 1 GW Mohammed bin Rashid Al Maktoum Solar Park — or, at least, 560,000 megawatt-hours of its output — will feed the Emirates Global Aluminium (EGA) smelter.

That’s enough power, The Driven reports, to produce some 40,000 tons of carbon-free aluminum.

Originally based on low-cost, natural-gas-powered electricity, the UAE can now neatly transition its aluminum smelters into the future of renewable power.

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US and UAE flags

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Before we head into the weekend, let’s take a look back at the week that was and the metals storylines here on MetalMiner, including the Biden administration reimposing a tariff on aluminum from the UAE, copper demand and much more.

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 Feb. 8-12 (Biden administration reinstates UAE aluminum tariff, copper demand and more)

Stop obsessing about the actual forecasted aluminum price. It’s more important to spot the trend.

General Motors headquarters

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This morning in metals news: automaker General Motors is facing challenges related to semiconductor supply; meanwhile, Oslo-based Norsk Hydro reported its Q4 2020 financial results; and, lastly, the oil price continues to tick up.

Semiconductor supply

End users across sectors are dealing with material shortage challenges.

The automotive sector is no different.

This week, General Motors announced it would extend previously announced downtimes at its Fairfax, CAMI and San Luis Potosi.

“Semiconductor supply remains an issue that is facing the entire industry,” GM said in a release. “GM’s plan is to leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs and Corvettes for our customers. Our supply chain organization is working closely with our supply base to find solutions for our suppliers’ semiconductor requirements and to mitigate impacts on GM.”

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Norsk Hydro reports Q4 results

Oslo-based aluminum firm Norsk Hydro reported Q4 EBIT of NOK 1,449 million (US $171 million).

Meanwhile, the firm reported Q4 2019 EBIT of NOK 560 million (US $66 million).

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