Industry News

Housing starts fell by 7.0% in July from the previous month, the U.S. Census Bureau reported Wednesday.

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Housing starts slide in July

housing starts

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According to the Census Bureau, U.S. housing starts reached a seasonally adjusted annual rate of 1,534,000 in July.

However, the July rate picked up by 2.5% from July 2020.

Meanwhile, single‐family housing completions reached a rate of 954,000, or up 3.6% from the June rate of 921,000. The July rate for units in buildings with five units or more reached 426,000.

Contractors face rising prices

Earlier this year, surging lumber prices commanded headlines, impacting construction projects across the country.

While lumber prices did eventually retrace after a torrid May, they remain at historically high levels.

Contractors are grappling with rising prices for all types of construction inputs, not just lumber.

“Extreme price increases continued in July for a wide range of goods and services used in construction, according to an analysis by the Associated General Contractors of America of government data released today,” the Associated General Contractors of America wrote. “Association officials urged President Biden to immediately end tariffs and quotas on steel, aluminum, lumber and other essential construction items to help stave off inflationary pressure in the construction industry.”

The Producer Price Index (PPI) for final demand jumped by 1.0% in July, the Bureau of Labor Statistics reported.

“On an unadjusted basis, the final demand index moved up 7.8 percent for the 12 months ended in July, the largest advance since 12-month data were first calculated in November 2010,” the BLS reported.

Prices have continued to surge for key construction metals, including steel and aluminum. The AGCA noted the PPI for steel mill products more than doubled from July 2020 to July 2021, gaining by 108.6%.

Meanwhile, the association’s officials called for the removal of existing tariffs on steel and aluminum.

“These tariffs and quotas are artificially inflating the cost of many key materials and doing more damage to the economy than help,” CEO Stephen E. Sandherr said. “Leaving these measures in place will undermine the broader benefits of the bipartisan new infrastructure measure the House should be passing.”

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Continuing with its acquisition of the U.S. natural gas assets, the Bangkok-based Banpu has now agreed to purchase a combined cycle gas-fired power plant in Texas.

According to Forbes , Banpu, controlled by billionaire Isara Vongkusolkit, will buy the power plant for U.S. $430 million.

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Banpu looks to the future

mergers and acquisitions

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For some time now, Banpu has been investing in sustainable projects as it steers a new course.

Last year, it established Banpu Next, which includes its energy technology businesses. Those include electric vehicles, renewable energy plants and electric ferries.

The company may not exit the coal mining business altogether for another decade or so because of the continued demand for coal. However, it has said it will no longer invest in new coal assets, preferring to put money into renewable energy.

In an interview with CNBC, Chief Executive Somruedee Chaimongkol — sometimes referred to as “Asia’s first lady of coal” — said the firm wanted to make half of its earnings from green energy by 2025.

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The U.K. government has upheld the Trade Remedies Authority’s (TRA) revocation of anti-dumping duties for welded tube and pipe imports from Russia. However, it has upheld them for imports of the same product from Belarus and China.

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Tube and pipe duties

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The TRA made the recommendation to the Secretary of State for International Trade in its final determination of its transition review, which the U.K. government released Aug. 9, following the U.K.’s exit from the European Union in 2020-21.

That document, dated July 9, found that Russian steelmakers did not import into the U.K., meaning that no dumping has occurred.

The import duty thus lapsed from Jan. 30, 2021.

“Replacement of EU trade duty was Dec. 31, 2020. Consequently, the day of the expiry of the measure, and the appropriate date from which the anti-dumping amount will apply (or is revoked) is Jan. 30, 2021,” the TRA said in its recommendation.

Duties on the Russian imports were 10.1-20.5%, depending on the producer.

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This morning in metals news: U.S. steel capacity utilization fell to 84.7% last week, the American Iron and Steel Institute reported; meanwhile, Glencore signed a cobalt supply deal with Britishvolt; and, lastly, the Department of Energy released a brief on investment in solar energy.

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Steel capacity utilization drops to 84.7%

steelmaking in an EAF

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U.S. steel capacity utilization dipped to 84.7% for the week ending Aug. 14, the American Iron and Steel Institute reported, down from 84.8% the previous week.

Steel output last week totaled 1.87 million net tons. Furthermore, output increased by 26.6% year over year from last year’s 1.48 million net tons.

For the year through Aug. 14, U.S steel production totaled 58.3 million net tons. Capacity utilization during the year-to-date period reached 80.3%.

Glencore, Britishvolt reach cobalt supply deal

Miner Glencore announced it has signed a cobalt supply deal with Britishvolt.

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This morning in metals news: the Energy Information Administration forecast U.S. natural gas exports will exceed imports this year; aluminum prices remained near 10-year highs last week; and, finally, the Associated General Contractors of America reported on the rise in construction input costs.

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US natural gas exports to exceed imports

natural gas tap

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U.S. natural gas exports are set to exceed imports this year, the Energy Information Administration (EIA) reported.

The EIA forecast exports will exceed imports by 11.0 billion cubic feet per day, or 50% more than the 2020 average.

“Increases in liquefied natural gas (LNG) exports and in pipeline exports to Mexico are driving this growth in U.S. natural gas exports,” the EIA added. “For the first time since U.S. LNG exports from the Lower 48 states began in 2016, annual LNG exports are expected to outpace pipeline exports—by an estimated 0.6 Bcf/d—this year.”

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The global shipping market has been a depressing topic to report on this year.

We have posted two or three updates on the state of play over the last eight months, each time expecting the situation to improve. Depressingly, by the time we come back to it, it has, if anything, gotten worse.

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Rising shipping rates

Shipping

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Freight rates have soared since the beginning of the year. Port congestion has increased and container availability has decreased. Shipping line shutouts have become a common feature.

Bloomberg reported that China has partly shut the world’s third-busiest container port after just one worker became infected with COVID-19. All inbound and outbound container services at Meishan terminal in Ningbo-Zhoushan Port were halted recently until further notice, closing approximately 25% of the port’s total container handling facilities.

This comes on top of an earlier closure of Yantian port in Shenzhen for about a month from late May. That closure led to goods backing up in factories and storage yards. Furthermore, it added to congestion at neighbouring ports.

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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:

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Week of Aug. 9-13, 2021 (copper market, steel capacity utilization and much more)

copper mine

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This morning in metals news: the pace of the rise of U.S. import prices slowed in July compared with the previous month; meanwhile, Nucor completed the acquisition of an insulated metal panels business; and, lastly, U.S. steel prices continue to move upward.

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US import prices up 0.3% in July

imports

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U.S. import prices jumped by 0.3% in July, the Bureau of Labor Statistics (BLS) reported. Higher fuel prices drove the July jump, according to the BLS.

Meanwhile, import prices surged by 1.1% in June.

On the other hand, U.S. export prices rose by 1.3% in July after a 1.2% jump in June.

Nucor acquires insulated metal panels business

Nucor Corporation officially completed the acquisition of Cornerstone Building Brands’ insulated metal panels business, the Charlotte-based steelmaker recently announced.

The acquisition comes at a cash price of $1 billion.

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This morning in metals news: the Producer Price Index (PPI) for final demand rose by 1.0% in July; ThyssenKrupp released its latest quarterly results; and, lastly, the Energy Information Administration released its latest Short-Term Energy Outlook earlier this week.

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

PPI up 1% in July

Producer Price Index (PPI)

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The Producer Price Index (PPI) for final demand rose by 1.0% in July, the Bureau of Labor Statistics reported.

The PPI index rose by 1.0% in June and by 0.8% in May.

The BLS said nearly three-fourths of July increase “can be traced to a 1.1-percent in prices for final demand services.” Meanwhile, the index for final demand goods increased by 0.6%.

ThyssenKrupp releases quarterly results

German steelmaker ThyssenKrupp reported order intake of €8.8 billion in the most recent quarter, more than double its total from the same quarter in 2020.

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Demand for cobalt is rising globally because of its use in electric vehicle batteries.

As such, China Molybdenum (CMOC) is planning to invest as U.S. $2.51 billion to further augment output from its Tenke Fungurume mine in the Democratic Republic of the Congo (DRC), Reuters reported, citing the company’s announcement.

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China Molybdenum to make $2.5B investment in DRC

China Molybdenum website logo

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CMOC is the second-largest global cobalt feedstock producer after Switzerland’s Glencore. Its TFM mine producing 15,400 tons of cobalt & 182,600 tons of copper in 2020.

The new project will come up at its Tenke Fungurume copper-cobalt mine (TFM) in the Congo. China Molybdenum has an 80% stake in Tenke Fungurume, one of the world’s largest copper-cobalt deposits. The DRC’s Gecamines owns 20%.

News agency Reuters reported the Chinese firm had stated in a filing that the investment will go toward building three ore production lines. As a result, average annual copper output at the mine would rise by 200,000 tons. In addition, cobalt output would rise by 17,000 tons.

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