Even though a relatively small portion of our intended metal buying audience purchases gold, silver, platinum or palladium for manufacturing, these precious metals love to shine their way through our metals market coverage.
Couldn’t resist a classic cliché there. Sorry. Or, you’re welcome.
Recently, Lynas Corporation founder and chairman Nicholas Curtis signaled that he’s fed up with the down-in-the-dumps, low-price rare earth metal market (our cheeky and unfounded speculation) by announcing his departure from the company after 14 years (according to the West Australian’s reporting).
As both Curtis and MetalMiner say goodbye to the REE market of 2014, we thought we’d take the opportunity to recap the year with a Best of Rare Earths selection.
What the Year in Rare Earths Prices Looked Like
In short, not awesome for Western rare earths producers, such as Lynas and Molycorp. For buyers, the deeply discounted REE complex is only made better by the prospect of going even lower; MetalMiner’s Rare Earths MMI® is having a hard time finding a true floor.
A peek at Chernobyl Reactor No. 4 from behind the New Safe Confinement structure. Source: Novarka
Back in 2004, as an undergraduate student working on his thesis in Ukraine, I was offered an unsanctioned ride to Chernobyl.
It didn’t happen.
Rather than jump through the hoops and pay money for a sanctioned tour of the Exclusion Zone, like many others, I was on the lookout for folks willing to drive me up for free. The only person who offered, a former Russian soldier from Chechnya named Sergei who was living on disability and spending the majority of his time being drunk, didn’t seem…well, the most trustworthy. (“Welcome to Ukraine,” amiright?) I was working on a documentary-style play chronicling the effects of the Chernobyl nuclear accident on Ukrainian citizens nearly 20 years on, and figured I should at least see Ground Zero.
Back then, I would have only seen the unattractive concrete “sarcophagus” that the Soviets hastily built to cover Reactor No. 4, the one that infamously blew its lid on April 26, 1986. However, these days, it would be a more interesting venture, if only to see the massive steel arch that 40+ countries have pitched in to build over the sarcophagus (and the 200+ tons of still-radioactive material buried underneath).
To begin, it goes without saying that buying organizations have much to be thankful for. Generally speaking, the commodity markets have fallen in 2014 and that means our buying audience should largely have paid less for their metals in 2014 than in 2013. Though metals producers generally don’t like falling commodities markets, the lower prices – particularly for energy-intensive producers – have meant cost advantages on the raw materials side. That has translated to higher earnings, particularly for aluminum producers: Alcoa, Century Aluminum, Kaiser Aluminum Corp., Constellium. And the steel producers haven’t fared too badly either particularly – U.S. Steel and Nucor.
Happy Thanksgiving from MetalMiner!
And the service centers also fared pretty well in 2014 – Reliance Steel & Aluminum, Worthington Industries and newly listed Ryerson all posted respectable numbers.
There’s probably nothing more in MetalMiner’s analytical wheelhouse than this type of report. From base metals to hot-rolled and cold-rolled steel coil outlooks, we gave you our take on where the markets were going. Check it out to see how right or how wrong we were – chances are, we were right.
MetalMiner, in conjunction with the Institute of Supply Management (ISM), conducted a snap survey to better understand the potential impact of American LNG exports on energy prices and the manufacturing sector overall. Hint: it’s a big deal for manufacturers, and Lisa Reisman, Pierre Mitchell and Raul de Frutos analyzed the findings to bring you some killer insight.
Or, more specifically speaking, what is the role of the procurement function when it comes to sustainability initiatives in an overly regulated economic climate? And what does Apple’s CEO Tim Cook have to do with any of this? Find out in this gem.
My esteemed colleague Jeff recently pined for the day when MetalMiner can provide some ‘peaceful minerals’ coverage, as opposed to ‘conflict minerals.’
While we all hope for such a day, it will come at likely the same time as peace in the Middle East, the Chicago Cubs winning the World Series, pigs flying, or Burger King buying Tim Hortons (oh wait, that last one did happen!).
These minerals look pretty peaceful, right? Well, as Mick Jagger once sang, ya can’t always get what ya want…
Until then, we have to focus on the so-called conflict minerals, or 3TG – tin, tungsten, tantalum, and gold – and how they’ve really screwed with supply chain managers and compliance officers all over the US. As our readers should know by now, the upheaval is due to a Dodd-Frank regulation that led to an SEC rule demanding public US companies audit their supply chains and report whether those supply chains are conflict-free.
The first deadline for companies to file compliance paperwork with the SEC fell on June 2, 2014.
2014: The Year So Far in Conflict Minerals
So what did you miss? Hopefully not much, if your company was one required to submit your Form SD starting this year.
Lisa Reisman, MetalMiner’s executive editor, certainly knows a thing or two about how conflict minerals compliance affects manufacturers. Near the start of the year, Lisa reported on Europe’s more laser-focused approach to compliance via proposed legislation. “Focusing efforts at the root of the issue – material going into smelters and refiners – is a more efficient approach than the SEC’s ‘push from the top’ mandate,” Lisa quoted Lawrence Heim, Director of the Elm Consulting Group International, LLC and frequent contributor to MetalMiner, as saying.
“That’s LORD Farmer to you, sir!” Source: UK Daily Mail
Michael Farmer, a legend in the metals trading business, was recently interviewed by Reuters after his honorary appointment to Britain’s House of Lords. Farmer ranked 522 on the Sunday (UK) Times Rich 2013 List of Britain and Ireland’s wealthiest people (OK, that’s the first thing you should know). We thought we’d distill a few more jewels from the interview.
The Guy’s Been Around the LME Since the Beatles Stormed Sullivan’s Set
“I hope that my 50 years in the City connected to the London Metal Exchange and the global trading of base metals may be of value as new regulations are formulated for the financial markets.”
He Loves Jesus (and Money)
“Also the experience of being an active Christian involved in the markets can be of use in defining good practice.”
Lord Copper and D-Cam Share the Stage
“As a working Conservative peer, the immediate aim is to help in getting (Prime Minister) David Cameron back into Downing Street with a Conservative majority at the general election next May.”
No…Sleep…Til Brooklyn (er, Retirement)
“I’m certainly in the thick of it and continue to be…Over the years I’m sure I’ll ease back, but I’m still very active.”
The 1922 description of Ryerson Inc.’s Chicago metals processing and distribution plant in the first part of this series no longer holds true for anyone walking through the campus these days, as I did myself just last week.
The central building on the northeast corner of 16th and Rockwell is still much the same. But, when peeking inside the warehouse doors, you’ll notice instead loads of film production equipment, from cables to lightboxes, with black-shirted stagehands ferrying them around on handtrucks. When looking for the Ryerson name engraved above the door to the central building, you’ll only find a blue and yellow sign that reads “Cinespace Chicago Film Studios.”
As many Chicagoans know, Toronto-based Cinespace bought up most of the complex when Ryerson Inc. fully vacated the space in June 2012. Where thousands of tons of steel and aluminum used to be trucked in, stacked, cut and shipped, production companies now shoot such TV series as “Chicago Fire” and “Boss.”
The only vestiges of Ryerson’s existence on campus are square white signs on the corner of each building, noting where to locate specific door numbers.
“What Would YOU Do With a Space Like This?”
The one building Cinespace couldn’t really use for shooting – Ryerson’s West Plant warehouse – ended up housing a little bit of NorCal.
Karen Hamilton talks beer and metal with MetalMiner.
According to Karen Hamilton, regional marketing manager for all Lagunitas Brewing Company operations east of the Rockies (and founder Tony Magee’s sister), the vibrations from passing trains on the tracks right next to the warehouse made it nearly impossible to film. So when Magee came back to Chicago to search for a location to expand the Petaluma, Ca.-based brewery, he got in touch with a realtor who suggested they see the Cinespace-owned building – which wasn’t even on the market.
As Lagunitas Chicago’s taproom opens for the first time today, we’ve taken a look at two legacies – that of Joseph T. Ryerson, founder of what is now Ryerson Inc., a metals processor and distributor with $3+ billion in sales, and Magee, founder of Lagunitas Brewing Company, now the fifth-largest craft brewer in the country. Don’t miss Part One and Part Two of this article.
State of the Art: In Steel Distribution and In Brewing
A principal testament to Joseph Ryerson and Tony Magee’s mutual drive and success is their commitment to state of the art elements in every aspect of business.
Source: Ryerson’s Ready Reference
In 1922, Ryerson offered customers its downtown offices, located in the Railway Exchange Building, to use as their “headquarters when in the city,” urging them to “use the telephone and stenographic services we provide.” Best of all, they offered car service “every hour on the hour” to the general offices at the plant on the Rockwell campus – only a “fifteen minutes ride.”
Not only that, the company extolled at the time that “the Ryerson offices have been built for convenience and expedition of service. There is plenty of light and air and the most modern office equipment is employed on every hand. A 6-position private branch telephone exchange, yielding instant connection with every section of the plant and offices and the outside world,” according to Engineering World.
For his part, Magee has made sure that the best in German engineering – massive Rolec stainless steel tanks and fermenters – will take his brewmasters’ artistry and parlay it into 1.6 million barrels of beer per year when the brewery is fully completed.
“Initially, we were going to use only half the building” for production, Karen Hamilton told me. “Then we realized we needed the whole building.”
Magee has also made sure to provide his own customers with a worthwhile fifteen-minute ride – on brew tours, for example. I was able to circumnavigate the operation on a catwalk that surrounds the gleaming stainless equipment, the humming bottling line and the mountain of silver-and-blue kegs stamped with “LAGUNITAS” on them, all ready to conquer the country east and west of the Mississippi.
Lagunitas, Ryerson to Last Forever?
Perhaps the most interesting crossover between Lagunitas and Ryerson Inc., between Tony Magee and Joseph T. Ryerson, is their companies’ legacy that many say will continue to last for many, many years to come.
If you enter, the history of metal distribution in Chicago and a wild beer circus both await you…
On a gray warehouse nearest the intersection of South Rockwell and West 17th Streets on the southwest side of Chicago, between loading door numbers 40 and 42, hangs a small white fabric sign with a picture of a dog and a red splotch.
Instead of steel plate, stainless coil, or aluminum sheet being shipped out of the corrugated metal doors of this warehouse – once part of Ryerson Inc.’s West Plant – hipsters smoking, a group of Asian tourists and burly folks wearing ballcaps and work-shirts all crossed paths one recent afternoon as they walked in and out of a pair of bright red doors.
For some, this is no more than a nondescript façade in the middle of a weedy, fenced-in parking lot cut in half by a closed-off street; in other words, somewhere no one would wander or stumble upon if they knew better.
But for us, this is Ground Zero of the histories of modern metal and craft beer coming together.