Market Analysis

The Stainless Monthly Metals Index (MMI) dropped by 10.4% for this month’s reading, as the ATI strike continues into its third week.

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ATI strike continues


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The United Steelworkers union’s strike at nine Allegheny Technologies Inc. (ATI) facilities continues into its third week this week.

As we noted late last month, the union announced the strike at nine facilities, citing “unfair labor practices.”

“We are willing to meet with management all day, every day, but ATI needs to engage with us to resolve the outstanding issues,” USW International Vice President David McCall said in a prepared statement March 29. “We will continue to bargain in good faith, and we strongly urge ATI to do start doing the same.

“Through generations of hard work and dedication, Steelworkers at ATI have earned and deserve the security of a union contract. We cannot allow the company to use the global pandemic as an excuse to reverse decades of collective bargaining progress.”

Meanwhile, ATI expressed disappointment in the move.

“Last night, ATI further improved our proposal in hopes of averting a work stoppage,” ATI spokesperson Natalie Gillespie wrote in an emailed statement. “With such a generous offer on the table — including 9% wage increases and premium-free health care — we are disappointed for this action, especially at such an economically challenging time for ATI.”

The Tribune-Review reported ATI has called for the union to allow workers to vote on the company’s contract offer.

Late last year, ATI announced plans to exit the standard stainless steel sheet market by mid-2021. As such, stainless buyers already had to develop alternative plans if they were ATI customers. The current ATI strike presents another point of disruption for buyers.

Katie Benchina Olsen, MetalMiner senior stainless analyst, indicated earlier this month that lost production from the strike would be difficult to fill.

“Neither NAS nor Outokumpu have the capacity to undertake filling in for the ATI strike,” she said. “My opinion is that we may see some manufacturers run out of metal or have to substitute with another stainless alloy or maybe even another metal.”

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green hydrogen

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Whether we agree with the rationale or not, the carbon footprint of everyday materials like steel and aluminum is becoming an increasingly important component of consumers’ purchasing decisions.

In the US, some states — like California — have mandated purchasing departments for state projects to report the carbon footprint or CO2 content of the products they buy. The move aims to measure and, if possible reduce, carbon content.

But in the US such moves are still patchy and largely state-led. Meanwhile, meaningful direction from the new Biden administration on the issue is still largely in development.

MetalMiner should-cost models: Give your organization levers to pull for more price transparency, from service centers, producers and part suppliers. Explore the models now.

Europe aims to reduce emissions

In Europe, the EU is coordinating moves to reduce greenhouse gas emission by the steel sector. The EU is providing funding for research and support in the form of infrastructure, such as hydrogen gas supply networks.

In a recent post, our ex-colleague Jeff Yoders wrote a fine piece on efforts by 2 to commercialize reductions in the carbon content of an initially small proportion of its output — just 2% or 600,000 tons per annum — by issuing certificates, which certify the reduction in carbon footprint of their steel that can be used by customers who need to report the carbon content of their supply chain or those that face carbon taxes.

The vouchers allow buyers to show an offset of Scope 3 emissions, which can come from anything in a company’s value chain.

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The Renewables Monthly Metals Index (MMI) dipped by 1.3% for this month’s reading, as the Energy Information Administration forecasts a jump in US electricity consumption this year.

April 2021 Renewables MMI chart

(Editor’s note: This report also includes the MMI for grain-oriented electrical steel, or GOES.)

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

US electricity consumption to rise in 2021 after 2020 drop

In its most recent Short-Term Energy Outlook, the Energy Information Administration forecast US electricity consumption will rise by 2.1% in 2021.

This comes after electricity consumption fell by 3.8% in 2020.

“Much of the increased electricity consumption across the sectors reflects improving economic conditions in 2021,” the EIA said. “For 2022, we forecast that U.S. electricity consumption will grow by another 1.3%.”

As for renewable sources of energy, the EIA notes the US will add new wind and solar capacity in 2021.

Meanwhile, for 2020, the EIA estimated the US added 14.5 gigawatts of wind power. In 2021 and 2022, the EIA forecast wind power additions of 16.1 GW and 5.8 GW, respectively.

Furthermore, the EIA forecast new solar capacity of 15.8 GW and 14.9 GW in 2021 and 2022, respectively.

On the nonrenewables side, the EIA forecast the US’s share of electricity generation from natural gas will decline this year and in 2022. Furthermore, it forecast coal used to generate electricity will rise by 13% this year and by 4% next year.

Raw materials and the next industrial revolution

Earlier this month, MetalMiner’s Stuart Burns touched on the global race for raw materials as countries jockey to put themselves in the best position for the next industrial revolution.

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The Global Precious Monthly Metals Index (MMI) rose by 3.7%, as the gold price trended sideways in March.

April 2021 Global Precious MMI chart

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Gold flat in March, picks up in April

gold price

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Late last year, MetalMiner’s Stuart Burns touched on the gold price’s prospects in 2021.

Gold surged above $2,030 per ounce last August amid ongoing economic uncertainty and well before the rollout of COVID-19 vaccines.

Since then, however, the gold price has cooled significantly. From the aforementioned peak, gold has dipped approximately 15%.

The gold price trended sideways throughout March, settling in around $1,730 per ounce. Despite a dip in treasury yields — which gold typically moves inversely to — the price largely held in place, as the US dollar strengthened.

The US dollar index rose to 93.30 in late March before retreating in the first week of April (coinciding with a modest bounceback for gold and silver).

So far this month, however, gold has shown some upward momentum. The gold price picked up Thursday, approaching the $1,760 per ounce mark.

Like gold price, silver price bounces back in April

Meanwhile, the silver price narrative followed a similar theme to that of the gold price.

After reaching $28.10 per ounce in February, the silver spot price fell to just below $25.00 per ounce to start April. Over the last week, silver has clawed back some gains, reaching around $25.50 per ounce Thursday.

While silver is often most thought of for its use in jewelry and kitchen utensils, the precious metal does have high-tech industrial applications.

As MetalMiner’s Stuart Burns noted earlier this week, nations around the world will need to secure their supply chains for the next industrial revolution, whether it’s the broader push toward renewable energy or the automotive sector’s transition toward electrification.

Among other uses, silver is used in semiconductors. As we’ve discussed at great length in recent months, the semiconductor shortage continues to weigh on automotive manufacturers.

30-year treasury yield declines

Meanwhile, the 30-year treasury yield has slipped over the last few weeks. Generally, higher yields serve as an indicator of economic confidence (as opposed to the gold price).

The 30-year yield reached a high of 2.45% on March 19.

This week, the yield fell to 2.32% on Thursday, down from 2.35% the previous day.

The 10-year yield fell to 2.22% on Thursday, down from a March peak of 2.36%.

The minutes of the Federal Open Market Committee’s meeting in March make reference to the March rise in yields.

“In the United States, the trend toward higher longer-term yields observed in recent months accelerated over the intermeeting period, and far-forward real rates based on Treasury Inflation-Protected Securities (TIPS) rose considerably,” the minutes indicated. “Market participants highlighted an improving economic outlook, bolstered by passage of the American Rescue Plan (ARP) and progress on vaccinations, as underlying the increase in yields.”

Sibanye-Stillwater announces strategic partnership with Johnson Matthey

Sibanye-Stillwater recently announced a strategic partnership with British sustainable technology company Johnson Matthey.

Through the partnership, the South African mining giant said it aims to “develop solutions to drive decarbonization.”

Furthermore, the parties will explore more efficient use of PGMs and other metals in battery technology.

“Johnson Matthey and Sibanye-Stillwater will collaborate on the sourcing and application of PGMs and metals used in battery technology to enable the development and commercialisation of low carbon technologies, with a focus on circularity and sustainability,” Sibanye-Stillwater said in its release. “In addition, the companies will examine potential opportunities to apply their collective experience to support the development of more sustainable supply chains for battery materials.”

Actual metals prices and trends

The US silver price dipped by 8.6% month over month to $24.41 per ounce as of April 1.

The US platinum bars price held flat, closing the month at $1,180 per ounce. Meanwhile, US palladium bars rose by 14.0% to $2,540 per ounce.

The Chinese gold price fell by 1.8% to $55.41 per gram. The US gold price fell by 1.6% to $1,709 per ounce.

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

aluminum ingot stacked for export

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In a recent webinar MetalMiner ran for key clients, we posed a question regarding the recent rise of aluminum physical delivery premiums: what was behind rises and would they last?

Physical delivery premiums are a significant cost to consumers. It can be a cost that is hard to hedge except for large consumers with access to exchange-traded financial hedging instruments.

So, understanding what is driving higher premiums is helpful in terms of judging the likely trajectory of future metal costs.

Are rising MW premiums causing concern? See how service centers take advantage of that. 

Rising aluminum physical delivery premium

There are several platforms for reporting physical delivery premiums. For the US, the CME is the probably the best.

Reuters illustrated the relentless rise of the aluminum physical delivery premium since the start of Q4 2020. The Midwest Premium is now back above $400 per metric ton, a level not seen in two years.


If it is any consolation to our US readers, North America is not alone in seeing rising costs.

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Greenland elections

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The Rare Earths Monthly Metals Index (MMI) fell by 1.9% for this month’s reading, as the Greenland elections this week could have significant ramifications for a rare earths project in the country.

April 2021 Rare Earths MMI chart

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

Left-wing party against rare earths mine wins Greenland elections

Rare earths mining stood front and center in Greenland’s elections earlier this week.

The left-wing Inuit Ataqatigiit party emerged victorious with 37% of the vote, Reuters reported.

What does Greenland’s election have to do with rare earths? The prevailing party ran on opposition to a mining project at Kvanefjeld on the southern tip of the island.

On its website, Australia-based Greenland Minerals Ltd. says the complex could be the most significant source of rare earths in the Western world.

Kvanefjeld offers “massive bulk resources,” the firm indicates, in addition to access to year-round direct shipping.

However, the election result could prove to be a significant blow to the site’s prospects.

Reuters quoted party leader Mute Egede, who said the project “won’t happen.”

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A recent Telegraph article suggests the West is sleepwalking into missing the next industrial revolution as China voraciously buys up raw material assets around the world. Those assets include securing its future supplies of cobalt, copper, lithium and other metals. The aforementioned comes in addition to its current domination of rare earth metals.

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

China leads in race for raw materials

electric vehicle charging

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Although the Telegraph article focuses on the UK, the UK is not alone.

Other European countries, and even the US, are only just catching on to the perilous state of most Western economies’ reliance on very limited, and often hostile, supply sources for raw materials.

As the article reports, it takes seven years to plan and build a mine. In the last four years, China Molybdenum has plowed into the Democratic Republic of Congo’s 350 kilometer copper belt. The firm paid $2.6 billion (£2 billion) four years ago for the Tenke Fungurume mine from Freeport McMoRan.

It then expanded its empire in December, paying another $550 million for Freeport’s nearby Kisanfu mine. The mine gave it access to a further 6.3 million metric tons of copper. In addition, the mine offers access to 3.1 million metric tons of cobalt.

Chinese companies now dominate mining in the central African country that produces 70% of the world’s cobalt.

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In a surprise move last week, OPEC+ announced a further gradual relaxation of the group’s 2020 emergency 9.7 million barrels per day cut in oil output, causing the oil price to briefly retreat.

In December, OPEC+ had intended to ease the curb by about 500,000 barrels per day each month in 2021.

Brent crude oil price chart

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However, in the face of still weak demand, it postponed the easements.

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

Oil price and supply

Meanwhile, in January Saudi Arabia surprised the market and its OPEC+ partners. The kingdom announced a voluntary additional cut of 1 million barrels per day. As a result, its output went to just over 8 million barrels per day b/d from its quota of 9 million barrels per day.

But the Kingdom has now announced it intends to gradually bring that back. It will increase production by 250,000 in May, 350,000 in June and 400,000 in July.

Since last year the 9.7 million b/d of OPEC+ cuts have been reduced to about 7 million barrels per day.

Output, however, remains well below pre-pandemic levels.

The latest announcement stated producers will collectively increase output by 350,000 barrels per day in May. They will add another 350,000 barrels per day in June and around 441,000 barrels per day for July, according to a report in the Financial Times.

Combined, Saudi Arabia and OPEC+’s amount to some 2 million barrels per day in the run-up to the summer.

Subdued demand as third wave of lockdowns hits parts of Europe

Demand is recovering. However, large parts of Europe are in a third wave of lockdowns; demand there remains subdued.

OPEC appears sensitive to not spooking the market and keen to minimize too much damage to the oil price.

The move surprised markets that were expecting no change, but the Brent crude oil price continued to trade around the $63 mark. The price has been at around that level for the last three weeks.

Major oil consumers like India and China will likely welcome the move. Greater output will be seen as one less support mechanism for higher prices this year. reports the move by OPEC+ in bullish terms, saying the market sees it as a vote of confidence in rising demand and that constraints on the market remain.

The US shale industry will likely see a further erosion of output this year, according to BloombergNEF last week. Output may shrink by another 485,000 barrels per day by the end of 2021 as producers focus on debt reduction and dividends over growth, according to the report.

For now, OPEC’s feared resurgence of shale oil has not materialized.

But as the battered and bruised fracking industry recovers, don’t count it out.

If the oil price remains at $60 per barrel or above, shale oil is profitable. One thing we do know about the industry is that, sooner or later, profit will justify a return of investment and growth.

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The Construction Monthly Metals Index (MMI) ticked up 1.0% for this month’s reading, as US construction spending dipped in February.

April 2021 Construction MMI chart

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

US construction spending

Construction spending in February reached a seasonally adjusted annual rate of $1,516.9 billion, or 0.8% below the revised January estimate of $1,529.0 billion, the Census Bureau reported.

Meanwhile, the February rate marked an increase of 5.3% year over year.

Furthermore, spending the first two months of 2021 totaled $213.2 billion, or up 4.9% year over year.

In the private sector, spending reached a rate of $1,165.7 billion, or down 0.5% from January. Under private construction, residential construction fell 0.2% to $717.9 billion. Nonresidential construction spending fell 1.0% to $447.8 billion.

Meanwhile, public construction spending reached a rate of $351.2 billion, or down 1.7% from January. Educational construction fell 3.2% to $86.9 billion. Highway construction reached $102.3 billion, or down 0.6% from January.

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The Automotive Monthly Metals Index (MMI) rose by 2.5% for this month’s reading, as Q1 2021 auto sales surged.

April 2021 Automotive MMI chart

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

US automotive sales

The first quarter is in the rear-view mirror.

General Motors reported Q1 retail sales jumped by 19%, as the automaker tallied 642,250 vehicle deliveries.

“Over the last year, our dealers, supply chain and manufacturing teams have gone above and beyond to satisfy customers as demand for GM products rose sharply,” said Steve Carlisle, GM executive vice president and president for North America. “The great teamwork continues. Sales are off to a strong start in 2021, we are operating our truck and full-size SUV plants at full capacity and we plan to recover lost car and crossover production in the second half of the year where possible.”

Meanwhile, Ford Motor Co. reported Q1 retail sales surged by 23.1% year over year. Total sales rose by 1%. Retail truck and SUV sales rose by 27.6% and 34.4%, respectively.

Ford also touted an uptick in electric vehicle sales, which jumped by 74.1% to 24,590 vehicles sold.

FCA US reported US sales jumped by 25%.

“In spite of what started out as a strong start last year, before COVID shocked us all, this quarter was a very strong rebound for retail sales year over year,” U.S. Head of Sales Jeff Kommor said. “The consumer demand for our brands and our products was extremely strong throughout the quarter.”

Similarly, Nissan reported its Q1 2021 auto sales surged by 10.8% year over year.

Meanwhile, March 2021 auto sales for Honda surged by 16.2% year over year. Honda saw its light truck sales jump by 132% in the month.

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