MetalMiner’s metals price landing pages (aluminum, steel and stainless steel) now feature the LME three-month prices set against MetalMiner’s track record, in addition to “should-cost” prices.

How much should your metals buy cost?

It’s a simple question that doesn’t always have a simple answer — or, at the very least, an answer that’s easy to get.

MetalMiner’s “should-cost” models aim to cut through the confusion and give buyers concrete ideas of what the products they’re buying should be costing them.

The MetalMiner should-cost models cover aluminum, steel and stainless steel.

So, what exactly do the models offer?

Aluminum should-cost model

With respect to aluminum:

• Comprehensive price breakdowns, including conversion cost for specific grade, thickness and width.
• In addition, the model is global; buyers can use from multiple regions.
• Lastly, buying organizations can more effectively “lock” conversion costs.

“Many competitors publish the LME three-month price along with the MW premium,” MetalMiner CEO and Executive Editor Lisa Reisman recently noted. “Few, if any, publish the conversion adder based upon grade, gauge, width etc. The MetalMiner aluminum should-cost model provides a level of granularity not previously available in the marketplace.”

Carbon steel

As for carbon steel, there is currently no North American price index for finished steel inclusive of adders and extras.

In addition, the carbon steel should-cost model includes:

• Most steel contracts are agreed on the basis of base price, which provides little to no flexibility to negotiate on total price. The steel should-cost model provides a price breakdown for adders/extras, which can generate additional cost savings for steel buyers.
• The model includes a price breakdown comparison of major U.S. steel mills. Buyers can use the information to negotiate annual sourcing contracts.
• Furthermore, the model contains a high level of granularity for specific types of steel (examples of specificity can be found on our carbon steel price landing page).

Stainless steel

What about stainless?

Similarly, there is currently no North American price index for stainless. In addition, the MetalMiner stainless should-cost model:

• Contains a high level of granularity for specific types of stainless. Examples of specificity can be found on our stainless price landing page.
• Second, the model features comprehensive price breakdowns (base price + gauge/width + finish + surcharge + vinyl + CTL).
• Lastly, it provides better means of negotiating effectively with suppliers.

For more information about the MetalMiner Insights platform and should-cost models, visit the MetalMiner Insights landing page. 

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The steel capacity utilization rate in the U.S. for the week ending Sept. 19 fell to 64.5%.

See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your steel buy.

Steel capacity utilization rate for week ending Sept. 19 drops

The steel capacity utilization rate for the week ending Sept. 19 marked a slight decline from the previous week, when it reached 65.1%, according to the American Iron and Steel Institute (AISI).

U.S. mills churned out 1.45 million net tons of steel during the week, down 19.7% on a year-over-year basis. The capacity utilization rate during the same week in 2019 stood at 77.4%.

Furthermore, production during the week marked a slight decline from the previous week, when production totaled 1.46 million net tons.

YTD output down 20.1%

In addition to the capacity utilization rate, adjusted year-to-date production reached 56.2 million net tons.

Steel mills’ capacity utilization rate reached 65.8% during the aforementioned period.

Meanwhile, for the same time frame in 2019, production totaled 70.3 million net tons at a capacity utilization rate of 80.3%.

Regional output

By region, production for the week ending Sept. 19, 2020, totaled:

• Northeast: 135,000 net tons
• Great Lakes: 527,000 net tons
• Midwest: 169,000 net tons
• Southern: 553,000 net tons
• Western: 62,000 net tons

Capacity utilization down, but steel prices make gains

On the price front, U.S. steel prices have showed significant upward momentum in recent weeks.

The U.S. HDG price closed Monday at $804 per short ton, up 11.98% month over month.

Meanwhile, U.S. CRC closed Monday at $729 per short ton, up 11.47% month over month.

U.S. HRC also made significant gains. The HRC price closed Monday at $560 per short ton, or up 19.4%.

Although capacity utilization has been rising on the whole in recent months, the automotive sector’s recovery has, in part, supported steel prices.

“The recovery of the U.S. auto industry might be driving the steel price increases,” Maria Rosa Gobitz wrote in last week Raw Steels MMI report.

“U.S. auto production continued to improve. Producers such as General Motors, Ford and Fiat Chrysler ramped up their assembly plants.

“However, supply has not quite caught up with demand. As such, U.S. auto inventory continues to tighten.”

Are you prepared for your annual steel contract negotiations? Be sure to check out our five best practices. 

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This morning in metals news: steel prices have been making gains; the WTI crude price moved up; and Vale plans to increase its iron ore output.

Upcoming negotiation on your steel buy? Make sure you know how your service centers will negotiate with you. 

Steel prices rise

U.S. steel prices are on the rise, but that rise can be attributed more toward the supply side of the ledger than the demand side, according to Bloomberg.

U.S. Steel, for example, this week hiked its prices. The company raises prices on flat-rolled steel products by at least $60 per ton, according to the report.

WTI ticks up

In other commodities news, the WTI crude oil price closed Thursday $40.97 per barrel, per the Energy Information Administration.

Thursday closing price marked an increase of $3.97 from the prior week. However, the price was down $17.14 from the same point in 2019.

Vale eyes iron ore output target of 400M

Brazilian miner Vale hopes to produce 400 million tons of iron ore annual, mining.com reported.

Currently, Vale has capacity to produce to 318 million tons per year.

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The Raw Steels Monthly Metals Index (MMI) increased by 4.3% for this month’s value. 

Does your company have a steel buying strategy based on current steel price trends?

U.S. steel prices start increasing

HRC prices increased by over 5.4% throughout August, closing at $486/st. During the first two weeks of September, the price rallied up to $521/st.

Meanwhile, Chinese HRC prices mostly traded sideways during August and the first two weeks of September.

The recovery of the U.S. auto industry might be driving the steel price increases.

U.S. auto production continued to improve. Producers such as General Motors, Ford and Fiat Chrysler ramped up their assembly plants.

However, supply has not quite caught up with demand. As such, U.S. auto inventory continues to tighten.

By the end of June, vehicle inventory fell to 2.6 million, or 33% fewer units year over year. Pundits suggest U.S. auto sales will reach an annualized 13.5 million unit rate for 2020, with stronger demand coming in 2021.

The aforementioned factors have not only supported the U.S. HRC price; HDG prices also surged.

The U.S. HDG price only increased by 5.6% throughout August, reaching $736/st, but found further support during the first two weeks of September. By the end of the second week of September, HDG broke resistance to $788/st.

Chinese steel market

After record imports in July, China’s iron ore imports in August fell 10.9%.

The General Administration of Customs reported China imported 100.36 million tons of iron ore throughout August, while consumers bought 112.65 million tons in July. However, imports increased 5.8% year over year.

According to Tang Binghua, of Founder CIFCO Futures, imports slowed in August partly due to port congestion from coronavirus-related restrictions. In addition, fewer shipments came from Australia as it closed its financial year.

Read more

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This morning in metals news: U.S. steel capacity utilization reached 65.1% for the week ending Sept. 12, the World Trade Organization released a report covering the U.S.’s Section 301 tariffs on Chinese goods; and the copper price approached a two-year high.

Does your company have an aluminum buying strategy based on current steel price trends?

U.S. steel capacity utilization rises to 65.1%

The U.S. steel sector’s capacity utilization rate reached 65.1% for the week ending Sept. 12, the American Iron and Steel Institute (AISI) reported.

Production during the week totaled 1.46 million net tons, down 19% year over year but up 2.2% from the previous week. Capacity utilization for the week ending Sept. 5 reached 63.7%.

However, production for the same week in 2019 reached 1.80 million net tons.

WTO releases report on U.S.’s China tariffs

The WTO this week released a report of its findings related to the U.S.’s Section 301 tariffs on Chinese goods, which amounted to hundreds of billions of dollars.

The report comes more than two years after China requested consultations — in April 2018 — related to the U.S. tariffs.

Read more

After dipping two weeks ago, the U.S. steel sector’s capacity utilization rate for the week ending Sept. 5 bounced back.

Steel mills produced at a rate of 63.7% during the week ending Sept. 5, 2020, according to the American Iron and Steel Institute (AISI). The rate marked an increase from the 61.7% recorded the prior week (when it had fallen from 63.0% the week before that).

Upcoming negotiation on your steel buy? Make sure you know how your service centers will negotiate with you. 

Production hits 1.43M tons

Steel output for the week ending Sept. 5 totaled 1.43 million net tons.

The weekly production total marked a 21.2% decline compared to the week ending Sept. 5, 2019, when capacity utilization reached 78.0%.

Meanwhile, production last week marked a 3.3% increase from the week ending Aug. 29.

Year-to-date output down by one-fifth

Buoyed in part by a recovery in automotive demand, the steel capacity utilization rate has made gains in recent months.

However, for the year to date, the capacity rate and overall output remain down compared to 2019 levels.

Year-to-date steel output totaled 53.27 million net tons, down from 66.73 million net tons for the same period in 2019. The capacity utilization rate for the same period last year reached 80.6%.

Read more

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This morning in metals news: the U.S.’s levels of exports and imports were approximately equal in May, according to the Energy Information Administration; Vale offered an update on emergency protocols at two of its dikes; and the U.S. has seen elevated levels of imports of standard pipe and tin plate in recent months.

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Energy exports, imports even in May

Per the Energy Information Administration, the U.S.’s energy exports and imports came in approximately even in May.

“The United States had been a net exporter of energy in several months of the past year,” the EIA reported. “Changes in domestic production and declines in global demand for energy since mid-March in response to COVID-19 have shifted energy trade balances back in the direction of net imports, especially for U.S. crude oil and petroleum products.”

Vale updates on Paracatu, Patrimônio dikes

Brazilian miner Vale offered updates on ongoing emergency protocols related to two of its dikes.

The Paracatu and Patrimônio dikes, it reported, both received negative Stability Condition Declarations.

Furthermore, Vale reported negative declarations for four other sites.

Standard pipe from Thailand up 378%

According to steel import trends reported by the Steel Import Monitoring and Analysis system, U.S. imports of several steel products have surged over the May-July 2020 period.

Imports of standard pipe from Thailand, for example, jumped 378% during the May-July period compared with the August 2019-April 2020 period.

In addition, tin plate imports from China jumped 365%.

Does your company have a steel buying strategy based on current steel price trends?

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Pandemic-related lockdowns constrained the global scrap market earlier this year. Consequently, operations were restricted or closed down.

But even as containments have eased, the market has been slow to come back — resulting in rising prices for steel and base metal scrap over the summer.

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

New EAF capacity coming onstream

Steel, in particular, is facing not one but two constraints.

On the one hand, as new electric arc furnace (EAF) steelmaking capacity has come onstream — with more planned to come onstream in the years ahead — steel scrap demand in the U.S. is likely to remain robust, even if the wider finished steel market remains under pressure from imports and only slowly recovering demand.

Meanwhile, China has not historically been a large producer of steel via the EAF route. However, the flexibility that the process affords and its lower environmental impact is attracting significant investment, spurring the country’s demand for more scrap.

As a result, steelmakers in China and their trade associations have been taking measures to make imported ferrous scrap shipments more welcome. They are trying to have scrap reclassified as a “resource,” according to Recycling Today.

Differing perspectives on nonferrous vs. steel scrap

Traditionally, China has treated metal scrap imports rather like general waste imports.

China in the past has even branded imported non-ferrous scrap as “foreign garbage,” according to the aforementioned article. The country has limited volumes with strict quota rules, which will decline to zero for base non-ferrous metals by 2021.

On the other hand, China is reviewing its steel scrap quotas, with a view toward relaxing them. Most expect import volumes to surge from early next year. As a result, that could potentially putting pressure on prices in an already constrained global market.

Scrap prices rose last month in Europe when Turkish buyers came back into the market. Those buyers had to bid for packages, even as their traditional U.S. sources were also facing limited availability.

All this is not to suggest we are facing runaway inflation in steel scrap prices.

Steel production generally is muted in most markets. Furthermore, finished steel prices are under pressure. However, there is a growing case, both economically and environmentally, for EAF production over the traditional iron ore-based blast furnace route.

That means there will be more buyers bidding for the finite supplies in the year ahead.

Are you under pressure to generate steel cost savings? Make sure you are following these five best practices!

After a long stretch of weekly increases, the U.S. steel sector’s capacity utilization rate fell last week.

According to the American Iron and Steel Institute (AISI), U.S. steel mills produced at a capacity utilization rate of 61.7% for the week ending Aug. 29. The rate marked a decline from the 63.0% recorded for the week ending Aug. 22.

Are you on the hook for communicating the company’s steel performance to the executive team? See what should be in that report!

Output drops 2.1%

In terms of tonnage, production last week reached 1.38 million net tons, down 2.1% from the previous week.

On a year-over-year basis, production last week fell 24.9%. During the same week in 2019, production totaled 1.84 million net tons at a capacity utilization rate of 79.1%.

For the year to date (through Aug. 29), production reached 51.84 million net tons at a capacity utilization rate of 66.0%.

The year-to-date total marked a 20.1% year-over-year decrease from last year’s 64.92 million net tons (when the capacity utilization rate reached 80.7%).

Production by region

Meanwhile, broken down by region, production for the week ending Aug. 29, 2020, totaled:

• Northeast: 113,000 net tons
• Great Lakes: 478,000 net tons
• Midwest: 162,000 net tons
• Southern: 556,000 net tons
• Western: 74,000 net tons

Price movements

Despite a recovery in automotive demand, not much else has supported steel prices of late.

In late August, however, steel prices did show some signs of upward movement.

For example, after falling to $454/st as of Aug. 20, U.S. HRC closed last week at $486/st. The U.S. HRC price is up 2.32% from the previous month.

Similarly, U.S. HDG traded sideways for much of August. After sitting at around $698/st for much of the month, the price closed last week at $736/st. The U.S. HDG price is up 3.66% month over month.

Finally, the U.S. HRC price also traded sideways for most of August. The price sat at around $640/st for much of the month before ticking up last week, closing at $660/st. On a month-over-month basis, however, the price fell modestly (by 0.9%).

Further analysis and commentary regarding both the U.S. and Chinese steel markets will appear in the September Monthly Metal Outlook (MMO) report, which will be released Tuesday, Sept. 1.

See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your steel buy.

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This morning in metals news: copper on the SHFE is headed for its fifth straight month of price increases; a Swedish joint venture is ramping up its efforts toward producing fossil-fuel-free steel; and Mexico is instituting a new export pre-approval process to avoid reimposition of steel tariffs by U.S. President Donald Trump.

Do you know the 5 best practices of sourcing metals including steel?

SHFE copper on the rise again

The SHFE copper price is headed for a fifth straight month of price rises, Reuters reported.

According to the report, the five-month streak marks the longest such upward rise in 11 years.

Swedish JV eyes fossil-fuel-free steel production

A joint venture in Sweden, Hybrit, is looking to make big changes to how steel is produced.

In particular, the JV is looking to remove coking coal from the equation, Bloomberg reports. Instead, the steel production process would feature hydrogen and other forms of clean energy.

SSAB AB, LKAB and Vattenfall AB are the operators of the JV.

Mexico to institute steel export pre-approval process

On the heels of President Donald Trump’s recent reimposition of the 10% Section 232 tariff on some Canadian aluminum, the Mexican government is hoping to avoid a similar outcome for its steel exports to the U.S.

According to Bloomberg, Mexico is putting into place a new pre-approval process for steel exports.

In short, the approval process — which would go into effect Sept. 4 — would confirm the steel exports did not pass through a third country.

Does your company have a steel buying strategy based on current steel price trends?