Author Archives: Arielle Hudson

The Raw Steels Monthly Metals Index (MMI) rose by 6.6%, as U.S. steel prices continued their rally.

July 2021 Raw Steels 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.

Production, capability utilization rise

According to the World Steel Association, global crude steel production increased by 14.5% year over year for the first five months of 2021. North American steel production rose by 11.3% during that period, with a sharp 47.7% increase in May alone.

For the week of July 3, the American Iron and Steel Institute reported that domestic raw steel production totaled 1,842,000 net tons. The capability utilization rate reached 83.0%. There has been a slow but continuous increase since the week of Jan. 2, when the institute reported steel production was 1,650,000 net tons at a capability utilization rate of 74.6%.

Despite this increase, all forms of steel prices remain at an all-time high.

U.S. imports increase

The latest data from the Steel Import Monitoring and Analysis (SIMA) showed steel import permit applications for June increased by 12.4% compared to the previous month. Imports totaled 2,965,000 net tons.

Import permit tonnage for finished steel in June increased by 6.8% month over month to 1,982,000 net tons.

Read more

The Stainless Monthly Metals Index (MMI) increased by 2.1% for this month’s reading.

July 2021 Stainless MMI chart

Are rising surcharges causing concern? Make sure your base prices are held fixed. See how service centers negotiate with you.

Nickel pig iron replacement

As steel prices continue to rally, stainless steel producers in China seem to be saving costs by replacing refined nickel with nickel pig iron (NPI). NPI is a lower-nickel-content substitute for refined nickel.

Satellite service SAVANT, which tracks smelter activity, reported that nickel smelting activity was lower than seasonally expected. The company claimed global nickel activity for June was at its lowest in five years.

At the same time, NPI smelting activity in China grew significantly, making April and June the highest readings in the past five years.

Tentative agreement between ATI, USW

After a three-months strike, Allegheny Technologies Inc (ATI) and the United Steelworkers (USW) reached a tentative agreement on July 2.

The agreement includes onetime payments, wage increases and a premium-free health insurance plan for union members. As soon as the agreement is signed, USW members are expected to resume work.

The strike affected approximately 1,300 workers in specialty rolled products locations across nine locations: Brackenridge, Latrobe, Natrona Heights, Vandergrift, Washington (Pennsylvania), Lockport (New York), Louisville (Ohio), New Bedford (Massachusetts) and Waterbury (Connecticut).

The specialty rolled products include a variety of stainless steel sheets, specialty coils, cold rolled stainless steel, and stainless and specialty alloy plates. More specifically, these plants produce: light gauge cold rolled stainless steel strip; titanium strip and sheet; nickel; precision rolled strip; cold rolled stainless; and alloys, such as high-temperature, corrosion-resistant, nickel-based and duplex.

As MetalMiner previously reported, the ATI strikes constrained U.S. stainless flat-rolled supply. For months, industrial metal buying organizations faced serious challenges in purchasing metal, not only due to the supply constraint but also because stainless steel prices are at an all-time high. In addition, soaring freight rates have also made imports a costly proposition.

Base price consolidates

After U.S. mills announced their fourth base price increase of the year in June, no further increases were announced for July.

U.S. mills have increased prices on products, which reduce available production capacity. Alloys other than 304, 304L and 316L have been subject to greater increases. Non-standard widths and light gauge extras have risen several times in the last six months.

Buyers should expect additional extras increases as mills continue to optimize their product mix to maximize volume.

Alloy surcharges are increasing in July. NAS’ July alloy surcharge for 304 is $0.9930/lb, an increase of $0.0318/lb compared to June.

Actual metals prices and trends

The Allegheny Ludlum 304 stainless surcharge ticked up by 3.0% month over month to $1.02 per pound this month. Meanwhile, the Allegheny Ludlum 316 surcharge surged to $1.45 per pound.

Chinese 316 cold rolled coil dropped 0.6% to $3,903 per metric ton as of July 1. Meanwhile, 304 cold rolled coil climbed 2.5% to $2,865 per metric ton. Chinese primary nickel surged by 0.5% to $21,093 per metric ton.

LME three-month nickel jumped 3.3% to $18,440 per metric ton.

Indian primary nickel declined by 1.4% to $18.20 per kilogram.

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

The Copper Monthly Metals Index (MMI) decreased by 7.3% for this month’s reading, as copper prices declined.

July 2021 Copper 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.

Copper stock

Since the beginning of the year, there have been concerns over copper production levels and stock availability.

LME on-warrant tonnages were at the 100,000/mt level, averaging 84,654 metric tons between January and June. However, throughout June, stock tonnage nearly doubled. Stock tonnage started the month at 97,975 tons and closed at 198,275 tons.

This could be a signal that speculative demand has adjusted. This is particularly true after China attempted to remove excessive speculation by issuing stern warnings to the domestic market, along with the recent release of state stock.

China’s efforts had a strong effect on the copper market. The country represents approximately 50% of global copper consumption.

Read more

The Aluminum Monthly Metals Index (MMI) increased by 0.9% this month, as aluminum prices traded mostly sideways but remained historically high.

July 2021 Aluminum MMI chart

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

Aluminum prices

Throughout June, LME aluminum prices cooled off. However, in the last week of the month, prices picked up and surpassed the $2,550/mt mark by the first week of July.

Trading volumes during the first week of July were lower than the June average of 14,426 metric tons. Volumes were heavier on days when the price went down, meaning there is no strong market signal.

Chinese prices trended differently from their LME counterpart. Chinese aluminum prices traded sideways throughout June and the first week of July. In June, trading volumes approximately tripled as the price went up but immediately declined, along with the price which could signal a bullish market.

Russia to impose export tax on metals

The economy minister of Russia, Maxim Reshetnikov, announced that the government was contemplating adding an export duty of at least 15% for steel, nickel, aluminum and copper, effective Aug. 1 through the end of the year.

The measure comes as an effort to protect its defense and construction industries as metal prices continue to rise globally.

However, these tariffs could have a particularly negative global implication for the aluminum market. Rusal controls about 10% of the global aluminum sector.

Moreover, Russia is the second-largest exporter of primary aluminum to the U.S. As such, the U.S. domestic aluminum market would feel an even bigger squeeze, causing further increases in the Midwest premium.

Tight supply

According to Bloomberg, buyers in Japan agreed to pay a premium of $185 per ton above LME prices for the coming quarter, the highest in six years.

This is a sign of a tight aluminum market. As the World Bureau of Metal Statistics reported this month, the aluminum market from January to April 2021 posted a deficit of 588,000 tons.

The deficit is due to a rapid turnaround in the economy. Demand slowed as travel declined early on during the pandemic but has since snapped back strongly.

The price rally has triggered several countries to take measures to help put a cap on price increases. Russia appears poised to implement export tax changes. Furthermore, China plans to release strategic reserves of the metal for the rest of the year.

New aluminum recycling plant

Norwegian industrial company Hydro Aluminum Metal signed a letter of intent to purchase a property in Cassopolis, Michigan, with the objective of building an aluminum recycling plant. The plant will produce aluminum extrusion ingot for use in critical automotive applications, in addition to other transportation and building systems.

The plant is estimated to cost a total of $120 million with a 120,000-metric ton capacity. The final product will be Hydro’s signature “Hydro CIRCAL® extrusion ingots, which contain at least 75% post-consumer scrap certified by third party auditors DNV GL.” The ingots have a CO2 footprint of 2.3 kg CO2e/kg aluminum, Hydro said.

Actual metals prices and trends

LME three-month aluminum increased by 4.1% month over month to $2,535 per metric ton as of July 1.

Chinese primary cash aluminum decreased by 2.0% to $2,901 per metric ton. Chinese aluminum scrap declined by 1.3% to $2,060 per metric ton. Meanwhile, Chinese aluminum billet went down by 1.3% to $2,380 per metric ton.

European 1050 aluminum sheet increased by 2.0% to $3,649 per metric ton.

Indian primary cash declined by 2.2% to $2.266 per kilogram.

We’re offering timely emails with exclusive analyst commentary and some best practice advice. Sign up here.

The Stainless Monthly Metals Index (MMI) increased by 4.3% for this month’s reading, as stainless steel demand is likely to continue to grow in the years ahead.

June 2021 Stainless MMI chart

Do you know the five best practices of sourcing metals, including stainless steel?

Increasing stainless steel production, demand

According to International Stainless Steel Forum (ISSF) data, stainless steel melt shop production increased by 24.7% year over year to 14.5 million metric tons through the first quarter of 2021.

Most of the production increase came from Europe and the U.S., where production jumped by 11.0% and 9.7%, respectively. The only region that saw a production contraction was China. China’s production fell by 0.5% to 8,198,000 metric tons.

This coincides with a report by Precedence Research, in which it estimates the stainless steel market size to increase to U.S. $168.24 billion by 2027 from U.S. $106.84 billion in 2019.

Precedence anticipates a 57.5% increase over the eight-year period due to the growing preference for stainless steel over ordinary steel and its increasing application in pre-engineered buildings. Additionally, demand for steel from construction and automotive and transportation sectors is expected to keep growing.

Read more

The Copper Monthly Metals Index (MMI) increased by 7.8% for this month’s reading, as the copper price remains high but dipped below the $10,000/mt level.

June 2021 Copper MMI chart

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

Copper prices retrace

On May 10, the LME three-month copper price closed at $10,720 per metric ton, hitting record highs last month.

Since then, prices declined below $10,000/mt.

SHFE prices followed the same trend.

The price retrace might be due partially to the stern warnings issued by Beijing about market discipline and excessive speculation in an effort to cool off prices.

Moreover, on June 7, trade data from China showed that copper imports fell 8% in May compared to the previous month. This might have scared some investors, as lower imports could mean lower demand, which decreases buying interest.

This could also signal that the pace of economic growth might be slowing. Along with less market speculation, that could mean the price will correct and consolidate.

Read more

The Raw Steels Monthly Metals Index (MMI) rose by 0.8% as U.S. steel prices continued to pick up but Chinese prices corrected.

June 2021 Raw Steels MMI chart

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

Chinese steel prices drop

China steel plant

gui yong nian/Adobe Stock

Since April 2020, Chinese steel prices have traded up consistently with a short decline period around December 2020. Around mid-May, all forms of Chinese steel prices peaked, as demand continued to soar in China.

Steel demand in China increased in the past few months as the government implemented its economic recovery plan, which includes infrastructure spending. Increasing steel prices continue to bring up infrastructure costs.

On May 26, steel prices saw a price drop of approximately 20% for all forms of steel. The sudden price decline in China could have been triggered by the severe punishment the Chinese government threatened to impose on any excessive speculation and fake news that might inflate critical raw material prices, such as steel.

After Chinese prices corrected, they continued to go up but at a slower rate, closing May at CNY 6,060/mt from CNY 6,100/mt at the end of April. Since, they continued to increase the first week of June but remain below the CNY 6,250/mt level.

However, volumes do not suggest speculation. Rather, the Chinese government wishes to control the rising price situation. After all, a lower domestic price can help boost the competitive advantage for Chinese firms exporting value-added products.

Read more

The Aluminum Monthly Metals Index (MMI) increased by 0.9% this month, as aluminum prices reached a nine-year high during the first half of the month but later declined. 

June 2021 Aluminum MMI chart

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

Aluminum prices

The LME aluminum price reached a nine-year high May 10 when it reached $2,565/mt. 

Since then, prices dropped below the $2,500/mt mark, averaging $2,434/mt throughout May.

Chinese prices behaved similarly to the LME. They reached a peak of CNY 20,030/mt on May 10 but have declined since then. 

EPI study claims tariffs incentivized US domestic production

On May 25, the Economic Policy Institute (EPI) published a white paper that argues the domestic aluminum producing and consuming industries have thrived as a result of the Section 232 tariff that former President Donald Trump implemented in March 2018. 

As MetalMiner reported last week, the EPI report argues the 10% duty has led to job growth in the sector and increased production.

The paper concluded that U.S. production of primary aluminum, including both alumina refining and secondary smelting and alloying of aluminum, increased by 37.6% to 1.14 million metric tons annually from March 2018 to February 2020. This increase came from the restart or production increase of five of the six smelters in the U.S. 

Read more

The Stainless Monthly Metals Index (MMI) increased by 4.5%, as stainless flat rolled base prices continue to move upward due to extended lead times and limited domestic capacity (following a similar trend with steel prices).

February 2021 Stainless MMI chart

Stainless steel producers raise prices

Stainless steel producers North American Stainless (NAS) and Outokumpu announced price increases effective for February deliveries.

Both producers announced a two-discount-point reduction for standard chemistry 304, 304L and 316L. For 304, the base price increase amounts to approximately $0.0350/lb.

Outokumpu diverged from NAS, as it increased all other 300 series alloys, 200 series and 400 series by reducing the functional discount by three points. In addition, Outokumpu also will be implementing a $0.05/lb adder for 21 gauge and lighter.

As the only producer of 72″ wide in North America, Outokumpu increased its 72″ wide adder to $0.18/lb.

Along with rising base prices, alloy surcharges are rising for the third month in a row. February alloy surcharges for 304 will be $0.8592/lb, an increase of $0.0784/lb compared to January.

Both NAS and Outokumpu are also revising their equalized freight rates, which take effect in March.

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

Read more

The Raw Steels Monthly Metals Index (MMI) increased for the ninth consecutive month, rising by 0.5% as US steel prices continued to rise.

Buying organizations should continue to buy as needed, as prices remain at all-time highs.

February 2021 Raw Steels MMI chart

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

US steel market

Universal Steel Products, along with four other American steel importing companies, challenged the 25% steel tariff imposed by former President Donald Trump in 2018 under Section 232 of the Trade Expansion Act of 1962.

On Feb. 4, the United States Court of International Trade moved to dismiss the plaintiffs’ cross-motion for partial summary judgment.

Meanwhile, President Joe Biden reinstated tariffs on aluminum imported from the UAE. Trump had rescinded the tariffs on his last day in office. Biden’s decision seems to signal that the new administration sides with primary producers in view of ongoing global overcapacity.

Tariff supporters argue it promotes steel investment, newer technology, increases domestic market share, provides security of supply for steel customers and generates employment. Meanwhile, detractors believe the tariffs directly impact US steel prices.

The graph below, however, shows the correlation between US steel prices and tariffs is not particularly strong.

Rather, the bullish market drives steel prices (as it did in 2018).

Today, steel prices have increased on the back of a bull market. In addition, capacity reductions have led to material shortages, as we see now.

HRC and CRC price comparison chart

US HRC and CRC prices (MetalMiner Insights data)

Chinese steel prices decline

Read more

1 2 3 5