Industry News

U.S. steel imports reached an estimated 2.6 million metric tons in June, the Census Bureau reported today.

The total marked a jump of 13% from the 2.3 million metric tons the U.S. imported in May.

US steel imports rise

steelmaking in an EAF

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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.

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This morning in metals news: Steel Dynamics Inc. released its second-quarter results, during which it tallied $4.5 billion in net sales; Nucor Corporation also released its Q2 results; and, lastly, miner Rio Tinto signed a renewable energy agreement in Madagascar.

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Steel Dynamics records Q2 net income of $702M

earnings sign

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Steel Dynamics reported Q2 net income of $702 million, up from $75 million in Q2 2020.

“During the second quarter, steel demand remained robust as shipments and product pricing continued their positive momentum across our entire steel platform,” said Mark Millett, chairman and CEO. “Higher steel selling values drove significant metal spread expansion across the entire platform and were most prominent within the flat roll steel operations, as continued demand strength and historically low customer inventories persisted throughout the supply chain and supported prices. Domestic steel consumption was strong from the automotive, construction, and industrial sectors, while the energy sector continued to show signs of rebounding.”

The company recorded Q2 2021 net sales of $4.5 billion, up from $2.1 billion in Q2 2020.

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner, including competition between the COMEX and LME vis-á-vis electrification, consolidating copper prices, the upcoming MetalMiner 2020 Forecasting Workshop and much more:

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.

Week of July 19-23 (electrification, hot rolled coil prices in Western Europe and much more)

electric vehicle charging

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Receive the latest short-term and long-term outlook for the full range of industrial metals (base and ferrous) at the annual MetalMiner Forecasting Workshop on Aug. 25

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.

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POSCO records strong Q2

POSCO logo

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South Korean steelmaker POSCO reported its strongest operating profit since 2010 in the second quarter of this year.

The steelmaker reported Q2 2020 operating profit of 168 billion KRW ($145.6 million), which jumped to 2,201 billion KRW ($1.9 billion) in Q2 2021.

Crude steel production reached 9.45 million tons in Q2 at a capacity utilization rate of 93.2%. Meanwhile, the steelmaker tallied 9.56 million tons in Q1 at a rate of 95.3%.

However, the Q2 rate marked a sizeable jump from the second quarter of 2020, when output reached 7.79 million tons at rate of 77.0%.

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This morning in metals news: copper prices have stabilized over the last month; U.S. natural gas prices have surged to their highest level since 2014; and, lastly, Cleveland-Cliffs released its second-quarter results.

Receive the latest short-term and long-term outlook for the full range of industrial metals (base and ferrous) at the annual MetalMiner Forecasting Workshop on Aug. 25

Copper prices stabilize

list of commodities prices

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MetalMiner Senior Forecast Analyst Maria Rosa Gobitz earlier this month covered the copper market, for which she noted prices had started to consolidate.

The LME three-month copper price had surged to an all-time high May 10 of around $10,700 per metric ton. The price proceeded to cool over the next 5-6 weeks, falling as low as $9,070 per metric ton.

The copper price then consolidated and has traded largely sideways over the last month. On Wednesday, the price closed at $9,244 per metric ton, or up 1.92% month over month, per MetalMiner Insights data.

Natural gas prices surge

Meanwhile, in energy news, U.S. natural gas prices have reached their highest level since 2014, the Energy Information Administration (EIA) reported.

“In June, the U.S. natural gas spot price at the Henry Hub averaged $3.26 per million British thermal units (MMBtu), the highest price during any summer month (April–September) since 2014,” the EIA reported. “Prices in July have increased from June, averaging $3.67/MMBtu through the first two weeks of July. Spot prices for July 14 in every one of the more than 175 pricing hubs tracked by Natural Gas Intelligence exceeded $3.00/MMBtu.”

Cleveland-Cliffs releases Q2 results

Cleveland-Cliffs reported net income of $795 million during Q2 2021, compared with a loss of $108 million during Q2 2020.

“In the second quarter of 2021 we achieved all-time quarterly records in revenue, net income, and adjusted EBITDA,” Chairman, President and CEO Lourenco Goncalves said. “The numbers unequivocally confirm our efficiency in operating the new footprint, resulting from the integration of the two major steel companies acquired in 2020 as a single and indivisible mining and steel company. They also demonstrate our flawless execution in ramping up our state-of-the-art Direct Reduction plant in Toledo to the current level of production above nominal capacity.”

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.

This morning in metals news: global aluminum production rose in June compared to last year, the International Aluminum Institute reported; Ford of Europe reported its Q2 sales; and, lastly, June electricity demand surged amid a heat wave in the Pacific Northwest.

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.

Global aluminum production rises in June

aluminum ingot

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Global aluminum production reached 5.55 million tons in June, the International Aluminum Institute reported Tuesday.

The June total marked an increase from 5.31 million tons in June 2020. However, output declined from the 5.75 million tons tallied in May 2021.

Furthermore, China’s output reached an estimated 3.25 million tons in June 2021, up from 3.03 million tons in June 2020. However, its output declined from May’s 3.35 million tons.

Ford reports Q2 Europe sales

Meanwhile, Ford of Europe touted sales of 242,618 vehicles in Q2 2021, up 43.7% year over year.

For the year to date (through June), Ford of Europe reported sales jumped 22.6% year over year.

According to the automaker, 46% of its passenger vehicle sales in Euro 20 countries in the second quarter were electric vehicles.

Electricity demand jumps in PNW

Amid a historic heat wave for the Pacific Northwest in June, electricity demand surged, the Energy Information Administration reported.

“A heat wave in the Northwest United States in late June led to more regional demand for electricity. During periods of high temperatures, electricity demand increases as people turn up their air conditioners, dehumidifiers, fans, and other cooling equipment,” the EIA reported. “Very high temperature events, like the one in June in the Northwest, tend to push electricity demand to very high levels.”

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

While the rest of the world is trying to com to grips with the European Union’s proposed carbon border adjustment mechanism (CBAM) – which calls for the levying of charges on non-E.U. products in relation to their embedded carbon footprint — China, on the other hand, is currently grappling with a slightly different energy-related issue.

A massive heat wave in some parts of the country coupled with a shortage of coal because of China’s spat with chief supplier Australia has sent coal prices soaring.

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China to ramp up coal production

coal pile

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Now, China, the world’s biggest consumer of coal, plans to add almost 110 million tons (MT) per year of advanced production capacity in the second half of this year to meet the rising demand of coal.

This Economic Times reported China’s National Development and Reform Commission (NDRC) said that around 400 MT of coal mining capacity is under review for the government’s approval. Another 70 MT capacity is also under construction, and would be launched in a phased manner.

What’s more, China’s state planner has asked power plants to build their coal inventory to the equivalent of at least seven days of consumption by July 21. News agency Reuters said the Chinese government was trying its best to ensure electric supply to the coal-fired plants amid surging power consumption from industrial and residential users.

In the first half of 2021, China has already added over 140 MT of coal mining capacity.

Eleven provinces registered record-breaking power load a few days ago, the Economic Times reported, as the heat wave led to higher use of electricity. In the first six months of 2021, power consumption rose by 16% from a year earlier, the report added.

Old coal

While simultaneously augmenting coal capacity, the NDRC has come down on outdated coal capacity. Where once there were 10,000 coal mines in China in 2015, now there are about 5,000. The NDRC has been urging coal miners to set up advanced mining capacity and ramp up output.

China’s average daily coal consumption has gone up to over 2.2 MT at key power plants in at least eight provinces in China as of July 15, Reuters reported.

Meanwhile, the South China Morning Post quoted the NDRC, which said China will release over 10 MT of coal from its state reserves.

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.

The CME’s Comex and London Metal Exchange (LME) are squaring up for the industrial revolution that is electrification, according to recent posts by Bloomberg and the Financial Times.

Both exchanges are busy developing and, more importantly, marketing products that cater to industry’s need to hedge exposure to forward prices for key battery ingredients. Whether for car batteries, electronic goods or power grid storage, the key metals are demanded by a common technology: lithium-ion batteries.

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.

Futures exchanges launch lithium hydroxide contracts

London Metal Exchange

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Both exchanges have launched identical lithium hydroxide cash settled contracts based on the Fastmarkets prices for China, Japan and South Korea – the key battery-producing regions.

So far, volumes are light. But with lithium hydroxide prices up some 86% this year, the market is arguably crying out for a hedging mechanism.

Initially, miners were said to be reluctant to support such a product, preferring long-term mine-to-consumer contracts. The same is the case for aluminum.

Eventually, the industry came round.

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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.

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US steel capacity utilization rises to 84.1%

hot rolled steel

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The U.S. steel capacity utilization rate continues to rise, jumping to 84.1% for the week ending July 17, the American Iron and Steel Institute reported.

The sector churned out 1.86 million net tons during the week. The output total marked an increase of 0.4% from the previous week and 37.7% year over year.

For the year to date, output reached 50.8 million net tons at a capacity utilization rate of 79.6%.

Housing starts jump in June

Meanwhile, privately owned housing starts reached a seasonally adjusted annual rate of 1.64 million in June, the Census Bureau reported.

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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.

Volatility is the name of the game. Do you have a steel buying strategy that can handle the ups and downs?

NLMK ramps up production

Postmodern Studio/Adobe StockTotal 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.

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