Furthermore, through May, U.S. steel imports totaled 10.7 million metric tons, up 7% from 10.0 million through the first five months of 2020.
Pacing the June rise was a jump in imports of blooms, billets and slabs. Imports of the category reached 795,863 metric tons in June, up 31.7% from 604,340 metric tons in May. Meanwhile, the June total rose a whopping 1,000% compared with June 2020.
Imports of oil country goods jumped 35.2% from May to 154,073 metric tons in June.
In addition, imports of hot rolled sheets jumped by 50.7% to 311,461 metric tons in June. Imports of steel rebar rose 12.0% to 94,915 metric tons.
Supply and demand fundamentals pushing nickel prices
Oksana Kuzmina/Adobe Stock
A strong rise in the nickel price early this year resulted in the three-month LME quotation hitting a seven-year high of over $20,000 per ton before crashing back to $15,665 during the first half of March. Announcements by Tangshan Stainless in Indonesia that it would switch production of its refined nickel output to an EV cathode battery chemistry undermined the presumption of a looming shortfall in battery quality metal.
The narrative has since moved from nickel being a tight battery grade metal market to simply a tight refined metal market.
This morning in metals news: South Korean steelmaker POSCO reported its strongest operating profit in Q2 since Q3 2010; the United States International Trade Commission made a determination regarding steel wire mesh from Mexico; and, lastly, tin prices have been soaring.
MetalMiner experts recently joined ROTH Capital Partners for a webinar that covered a wide range of metals topics, including oil prices, macroeconomic trends, and insights into the aluminum, steel and copper markets.
The webinar, which took place July 14, followed up on a previous MetalMiner-Roth webinar on May 20, 10 days after metals surged to record highs. Copper, for example, reached an all-time on May 10. MetalMiner CEO Lisa Reisman and Vice President of Business Solutions Don Hauser joined to share their insights on various markets, recapping metals movements in the two months since that peak.
This morning in metals news: the U.S. steel capacity utilization rate rose to 84.1% last week; privately owned housing starts jumped in June; and, lastly, Pedro Castillo has been declared president-election in Peru.
The flat rolled product has transacted in the past week at closer to €1,200 ($1,415) per metric ton exw for November delivery. That compares with a price range of €1,150-1,200 in late June, sources said.
Producers sought to push HRC prices up to €1,250 ($1,475), one trading source told MetalMiner. End users, however, did not accept the increase.
Severe flooding late last week in the Netherlands, Belgium and Germany’s North Rhine-Westphalia state, however, have created logistics disruptions in those areas. This prompted ThyssenKrupp Steel to declare on Friday a force majeure on its deliveries, a spokeswoman for the German group told MetalMiner.
“That doesn’t help the supply for sure” as it could tighten the market and mitigate any price declines, the analyst warned.
Higher temperatures in the European summer as well as workers and businesses taking holidays in July and August, resulting in lower activity, are now putting pressure on prices for the flat rolled products.
The import market is also adding pressure to local prices, however, sources noted.
Offers on HRC from mills in Japan, Indonesia and Taiwan are about $1,170-1,200 per ton CFR European ports for September/October delivery.
“I think that it is fair to say that import activity will pick up,” one analyst said.
Lead times on the domestic market are in some cases as far out as Q1 of 2022, he added.
Uncertainty over imports
The analyst warned, however, that it is for now uncertain what kind of impact Russia’s planned introduction of a 15% export tax from Aug. 1 on all steel products – semis and finished – would have on import markets into Europe.
China is also weighing the introduction of an export tax on its steel exports in order to cool its domestic market, one source said, after canceling in May the export rebate on the 13% value-added tax failed to bring the desired effect, sources noted.
Meanwhile, the European Commission, the European Union’s executive arm, opened up an antidumping investigation in June on hot dipped galvanized coil imports from Russia and Turkey. That prompted producers in those two countries to increase offer volumes, the trader said.
Novolipetsk Steel (NLMK) reported a 10.8% increase year over year in its crude production for H1 2021. The steelmaker benefited from stronger demand, as economies in Russia and abroad restarted economic activity, the group said.
Total crude production across all NLMK’s steelmaking assets came to 8.94 million metric tons, compared with 8.07 million tons over the same time in 2020, the group said in its July 13 operational results.
Rebuilding work on the converter shop at NLMK’s main site in Lipetsk also helped to raise production, the group added. Its capacity percentage averaged to 95.5%, up from 93% over the first six months of 2020.
NLMK has a crude steel capacity of 17 million metric tons per year. The majority of that volume comes from Lipetsk, which can pour up to 12.4 million metric tons per year. The crude steel is then cast into slab for rolling hot and cold rolled coil transformer and dynamo steel, as well as pre-painted.
Lipetsk also supplies its slabs to assets in Europe and the United States for further rolling into coils or plate.
This morning in metals news: Chinese steel exports surged in June, according to General Administration of Customs data; meanwhile, the average cost for U.S. solar power construction continued to decline in 2019; and, lastly, Cleveland-Cliffs released its Sustainability Report 2020.
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Chinese steel exports jump in June
Chinese steel exports jumped by 23% to 6.49 million tons in June, the General Administration of Customs reported this week.
The country reported steel exports 5.27 million tons in May.
Meanwhile, exports of unwrought aluminum and aluminum products reached 454,397 tons in June, up from 439,097 tons in May.
In addition, exports of rare earths fell from 4,171 tons in May to 4,012 tons in June.
In fact, Tangshan’s mills contribute about 14% of China’s raw steel output. Furnaces are running at a lower rate because of China’s stringent new emission standards. Only those mills meeting these conditions are going full blast, according to the news report.
China remains the world’s No. 1 steel producer with over 1 billion tons of crude steel production. However, Beijing has been trying to cut greenhouse gas emissions to meet the country’s pledge to bring its emissions to a peak before 2030.
In the first five months of this year, the country’s crude steel output reached 473.1 million tons, the World Steel Association reported. The five-month output total marked an increase of 13.9% year over year.
This morning in metals news: ArcelorMittal said it plans to make its Sestao plant zero carbon emissions; meanwhile, the Producer Price Index for final demand increased by 1.0% in June; and, lastly, U.S. steel prices continue to rise.
ArcelorMittal announces aim to build zero-carbon-emissions Sestao steel plant
ArcelorMittal this week said it plans to make its steel plant in Sestao, Spain, the “world’s first full-scale zero carbon-emissions steel plant.”
“The development is the result of a memorandum of understanding signed today with the Government of Spain that will see an investment of €1 billion in the construction of a green hydrogen direct reduced iron (DRI) plant at its plant in Gijón, as well as a new hybrid electric arc furnace (EAF),” ArcelorMittal said.
The steelmaker said the new DRI plant will have capacity of 2.3 million metric tons. Of that total, 1 million metric tons would go to Sestao to be used as feedstocks in its electric arc furnaces (EAFs).
PPI up 1.0%
Elsewhere, the Producer Price Index (PPI) for final demand increased by 1.0% in June, the Bureau of Labor Statistics reported.