Aluminum

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This morning in metals news, China ramped up its aluminum output in December, British police are looking into allegations of pension fraud against steelworkers and India considers a plan to have its steel ministry oversee iron ore and coal operations.

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Chinese Aluminum Output in December

China upped its aluminum output to close 2017, jumping back up to its highest total since June 2017, Reuters reported.

According to the report, China produced 32.27 million tons of aluminum last, up 1.6% from 2016, per National Bureau of Statistic Data.

British Police Look Into Possible Pension Fraud

According to the Financial Times, police in south Wales are looking into allegations that some Port Talbot steelworkers have been victims of pension fraud.

The complaints were put forth by the British Steel Pension Scheme.

Iron Ore, Coking Coal Mining to Steel Ministry?

India is considering transferring control of iron ore and coking coal mining to its steel ministry, Bloomberg reported, in an effort to boost the country’s burgeoning steelmaking industry.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

A shift in regulatory oversight from the mines and coal ministries to the steel ministry requires approval from the prime minister’s office and the ministries, according to the report.

Now that the New Year has begun, we’re getting ever closer (hopefully) to the Commerce Department’s final recommendations on the Section 232 investigation.

Today we continue our podcast series that we’re calling “Manufacturing Trade Policy Confidential,” in which we turn our focus to the aluminum industry. Our guest is Heidi Brock, the president and CEO of the Aluminum Association, whom we spoke with just before the winter holidays. She works tirelessly on behalf of the association’s members, which span the entire value chain. Heidi does find moments, however, to take a step back and see the bigger picture.

Recently, she got to see the newly commissioned USS Gabrielle Giffords, a warship named after the former Arizona congresswoman, and it left her with a sense of awe. “I just can’t tell you what an amazing experience it was,” she said.

To hear more on what a strong domestic aluminum sector has to do with national security, and how the aluminum sector views other hot trade issues of the moment and why, listen in to Lisa Reisman’s conversation with Heidi Brock.

Here’s Heidi in front of the U.S. Navy littoral combat ship USS Gabrielle Giffords:

Courtesy of Heidi Brock

For an additional sense of scale, here’s an “aerial view of the ship during its launch sequence at the Austal USA shipyard, Mobile, Alabama,” according to Wikipedia, from a photo provided by the U.S. Navy:

Source: U.S. Navy/Wikipedia

Manufacturing Trade Policy Confidential: Background

With everything that’s been happening on the international trade policy front over the past year, we wanted to give metal buying organizations more insight into the issues they may not be reading or hearing enough about — or at all — in the mainstream B2C media.

What better way to do so than go straight to the source — or sources — and interview some key movers and shakers on the manufacturing and policy fronts? So we’ve started a brand-new series called “Manufacturing Trade Policy Confidential.”

If you’ve visited MetalMiner’s digital pages over the past several months, you’re no stranger to the phrase “Section 232” — shorthand for the U.S. Department of Commerce investigation into whether certain steel imports constitute a national security risk, under the namesake section of the U.S. Trade Expansion Act of 1962.

The outcome of the investigation (findings from which were slated to come down last summer but have been delayed) could have significant effects on upstream and downstream manufacturing organizations, ranging from metal producers to buying organizations – even the mom-and-pops.

But Section 232 is only one small part. Trade circumvention, China’s non-market economy status, domestic uncertainty amidst proposed tax plans and many other issues have pushed us to start this new podcast series.

We’ll be publishing several more interviews in the coming weeks and months – stay tuned!

Listen to more episodes and follow the MetalMiner Podcast on SoundCloud.

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This morning in metals news, global steel output rose last month, Chinese aluminum smelter cuts have fallen short, and a Trump administration official said the president’s new security strategy backs the case for potential tariffs on steel and aluminum.

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

Global Steel Output Up

Although Chinese capacity cuts are on the horizon, global crude steel output rose by 3.7% in November, Reuters reported.

China’s goal of cutting capacity, in an effort to reduce pollution in the country, is expected to eat into that global output total.

November crude steel output in China hit a nine-month low, according to the report.

Meanwhile, in Aluminum Cuts…

How about Chinese efforts with respect to aluminum smelter closures?

According to Reuters, that has fallen short, as China has failed to implement closures for the winter season. As a result, the aluminum price has struggled in the face of record inventories in China.

New Security Plan Boosts Case for Steel, Aluminum Tariffs

As the metals industry waits for a resolution to the Trump administration’s Section 232 probes of steel and aluminum imports, a Trump administration official on Tuesday said the president’s new security strategy supports the case for steel and aluminum tariffs, Reuters reported.

Free Sample Report: Our Annual Metal Buying Outlook

The Section 232 probes, launched in April, “are being discussed in the context of national security,” the official told Reuters. “The strategy highlights the importance of industrial strength, and that is also an element of the 232 analysis.”

The electric vehicles (EVs) market could increase by 3,400% by 2030 compared to 2015 EVs sales, according to the U.S. Department of Energy.

More powerful, reliable and cost-competitive batteries have driven EV growth. Lithium-ion batteries have effectively replaced lead batteries.

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

MetalMiner analyzed the usage of base metals in EVs and their price performance this year. The EV boom has driven investor sentiment for these base metals.

Base Metals’ Role in EVs

The infographic below breaks down car parts by type of base metal. Aluminum, nickel, copper and tin serve as the four main base metal “winners” in which the market could expect demand to grow.

Source: MetalMiner analysis of Business Insider data

Aluminum, Copper and Nickel

Of the exchange-traded metals, all three of these base metals commonly have high trading volumes. Copper, in particular, tends to have high trading volume as the market considers it an economic indicator (often referred to by the nickname “Dr. Copper”).

Both aluminum and copper appear in an uptrend, especially since the summer when prices started to rally.

Nickel prices have also seen high volatility due to electric battery demand. This makes sense — if investors consider a metal  “hot,” then volume and transactions may increase. Prices may change based on  this, as they did for nickel.

Source: MetalMiner analysis of FastMarkets

And What About Tin?

Contrary to the other three base metals, tin prices do not look bullish.

Tin plays an important role in EVs, as it is used for electronic solder and batteries. However, tin prices appear both stagnant and weak.

Source: MetalMiner analysis of FastMarkets

Tin’s price momentum has diverged from EV supply/demand fundamentals and the LME price.

EV batteries have evolved toward technologies that include more tin alloys. According to the International Tin Research Institute (ITRI), tin used for batteries increased by 95% in 2016 compared to 2010 data (14,400 tons). Tin mine output has increased in 2017 compared to last year’s data (18% in China, 26% in Indonesia and 7% in Myanmar).

However, the ITRI forecasts a 7,300-ton deficit in 2017. Tin stocks remain low, with only a slight increase in SHFE stocks.

Free Download: The December 2017 MMI Report

Current macro indicators support the bullish rally. However, tin prices still seem reluctant to react.

Have investors forgotten about tin?

Judging by the reception for aluminum, copper and nickel, perhaps 2018 will bring tin into the bull party.

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This morning in metals news, Chinese aluminum output fell to its lowest total since February 2015, Liberty House considers buying a large Rio Tinto smelter in France and copper approaches a two-week high.

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

Chinese Aluminum Output Falls

Chinese primary aluminum production dropped for a fifth straight month, Reuters reported.

In fact, winter smelting restrictions saw output fall to its lowest in the country since February 2015, according to the report.

Liberty House Eyes Rio Tinto Smelter

According to Reuters, Liberty House is considering a bid for Rio Tinto’s aluminum smelter in northern France.

The Dunkirk plant is valued at around 200 million euros, according to Reuters sources familiar with the matter.

Copper Rises Near Two-Week High

A weakening dollar and positive Chinese manufacturing data saw copper rise on Thursday, Reuters reported.

The Chinese industrial sector grew faster in November than markets expected.

Free Sample Report: Our Annual Metal Buying Outlook

London Metal Exchange copper traded at $6,760 a ton in official midday rings, according to the report.

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This morning in metals news, the U.S. Department of Commerce launched an anti-dumping and anti-subsidy probe into Chinese aluminum imports, oil prices rise above $60/barrel and copper prices fall for a third consecutive day.

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

Commerce Dept. Launches Aluminum Probe

On Tuesday, the U.S. Department of Commerce launched an anti-subsidy and anti-dumping probe of imported Chinese aluminum alloy sheet, Reuters reports. Beijing is less than happy about the investigation and released a strongly-worded statement on Wednesday, arguing that the move 10would harm both countries.

What sets this probe apart is that it was initiated by the Commerce Department itself, whereas usually these investigations are requested by companies and industries claiming harm from imports. The last time the Commerce Department initiated an anti-subsidy probe was in 1991, on Canadian softwood lumber.

If the probe proceeds, preliminary anti-subsidy and anti-dumping duties could be issued in February and April 2018, respectively.

The End of the Global Oil Oversupply?

Is it the beginning of better days for oil exporters? OPEC and Russia’s agreement last year on oil production cuts has helped prices recover. Brent crude oil reached $64 a barrel this week, the New York Times reports, and some analysts are expecting prices to top $70 next week. Read more

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Every action has an equal and opposite reaction, said Newton, and John Locke was not alone in discussing the principal of unexpected consequences — so the interest Chinese aluminum smelters are showing in expanding overseas should come as no surprise after Beijing has forced many aluminum producers to close capacity in the country ahead of the winter heating season.

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

China Hongqiao Group , the world’s biggest aluminum producer, is looking into the possibility of moving recently shuttered illegal or un-permitted smelting capacity overseas, according to Reuters.

Hongqiao had to shut 2.68 million tons in annual smelting capacity in its home province Shandong at the end of July. The firm is rumored to be looking at moving this capacity to Indonesia where it already has a 1-million-ton alumina refinery.

“It’s a good time to go global,” said Chen Xuesen, deputy director of the strategy development department at state-owned Chinalco, underlining the fact that Chinese smelters are not content with the largest domestic market in the world. With that constrained, they are now looking for further expansion overseas.

Read more

Yes, the aluminum price has fallen back this month.

Yes, it is looking decidedly weak compared to its high point of $2,215 per metric ton earlier this month.

Yes, inventory on the Shanghai Futures Exchange (SHFE) is building rapidly, hitting a record high this week of 666,581 tons, according to Reuters.

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

That’s not where we expected aluminum to be back in the summer when the market was talking all about smelter closures in China this winter and supply constraints.

Does that mean the market thinks the constraints are not going to happen? Is this another case of Beijing talking up their policies but failing to enforce them?

Read more

Welcome to the (re)launch of the MetalMiner Podcast!

(We’re calling it a relaunch because, well, remember this?)

With everything that’s been happening on the international trade policy front over the past year, we wanted to give metal buying organizations more insight into the issues they may not be reading or hearing enough about — or at all — in the mainstream B2C media.

What better way to do so than go straight to the source — or sources — and interview some key movers and shakers on the manufacturing and policy fronts? So we’re starting a brand-new series called “Manufacturing Trade Policy Confidential.”

New Series: Manufacturing Trade Policy Confidential

In this first episode of the series, MetalMiner Executive Editor Lisa Reisman interviews Michael Stumo, CEO of the Coalition for a Prosperous America.

Stumo’s concerns, and those of his organization, cut across industry sectors and political leanings. In this conversation, Stumo outlines what he sees as the most crucial elements to consider in today’s trade environment, touching on everything from China to the German Mittelstand to Alexander Hamilton as economic visionary.

Manufacturing Trade Policy Confidential: Background

If you’ve visited MetalMiner’s digital pages over the past several months, you’re no stranger to the phrase “Section 232” — shorthand for the U.S. Department of Commerce investigation into whether certain steel imports constitute a national security risk, under the namesake section of the U.S. Trade Expansion Act of 1962.

The outcome of the investigation (findings from which were slated to come down last summer but have been delayed) could have significant effects on upstream and downstream manufacturing organizations, ranging from metal producers to buying organizations – even the mom-and-pops.

But Section 232 is only one small part. Trade circumvention, China’s non-market economy status, domestic uncertainty amidst proposed tax plans and many other issues have pushed us to start this new podcast series.

We’ll be publishing several more interviews in the coming weeks and months – stay tuned!

Follow the MetalMiner Podcast on SoundCloud.

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This morning in metals news, the CEO of Northam Platinum indicated the platinum price is due for upward movement, raw steel production in the U.S. last week was up significantly and Chinese aluminum production was down during October.

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

Platinum on the Rise?

As we’ve noted here in recent weeks, palladium has outdone platinum of late — normally, it’s the other way around.

But according to Northam Platinum CEO Paul Dunne, platinum should be on its way back up.

“We have said for a number of years from various public platforms that you would see a phased recovery with palladium running first, then rhodium, and finally platinum,” Dunne said in a report by Mining MX. “Palladium has been off to the races over the past year and the rhodium price has now started to move in recent months rising around 50%.”

Raw Steel Production Up

According to data from the American Iron and Steel Institute (AISI), U.S. raw steel production was up 9.3% for the week ending Nov. 11 compared with the same week last year.

Domestic raw steel production was 1,739,000 net tons for that week, with a capability utilization rate of 74.6%. 

Production for the week ending Nov. 11 was up 1.4% from the previous week, when production was 1,715,000 net tons and the rate of capability utilization was 73.6 percent.

Chinese Aluminum Production Drops in October

Primary aluminum production in China fell 2.3% in October from the previous month, according to a Reuters report citing government data.

Free Download: The November 2017 MMI Report

According to the report, factors contributing to the drop include high costs and the closure of illegal capacity.