Oil Greasing the Way for Higher Metal Prices? Or Not?

pipeline Roger Asbury/Adobe Stock

A non-metal commodity dominated our coverage this week, sluicing across this great land in tanker cars, pipelines and trucks and affecting the price of all other commodities while its value fluctuated wildly.

Oil is an input used in production of most metals and its value greatly affects transportation surcharges and production costs. This week, Saudi Arabia and Russia promised to work together on a “task force” to try to right-size the oil overproduction we’ve become accustomed to over the past two years. MetalMiner Co-Founder Stuart Burns warned that the days of $100/barrel are, indeed, long gone, but something could still come of this latest effort to rein in production. Naturally, the markets ebbed and flowed on speculation of what that might be.

Transshipment Trouble for Zhongwang

Last week, we wrote about China Zhongwang and its billionaire owner, Liu Zhongtian, buying U.S-based extruder Aleris. Well, this week Zhongwang was in trouble again with U.S. authorities as the Commerce Department launched an investigation into transshipments related to nearly 1 million metric tons of aluminum stored in rural Mexico.

The Wall Street Journal said shipping documents and sales receipts related to the massive stockpile all lead back to Zhongwang.

Less Titanium Production in Utah

Instead of forming titanium sponge by passing titanium tetrachloride in a gaseous phase over molten magnesium or sodium at its Rowley, Utah, facility, Allegheny Technologies Inc. will now just buy its titanium sponge on the open market. By idling the Rowley titanium facility indefinitely, the specialty metals manufacturer is also cutting 140 jobs.

ATI noted that production of titanium sponge has increased with demand for finished titanium and it could no longer justify keeping the facility open when it cost more to produce than buy.

More Tariffs For Chinese Steel

Chinese cut-to-length steel plate got slapped with 210% preliminary tariffs by the Commerce Department this week. In South Korea, POSCO (formerly the Pohang Iron & Steel Co.) was found to have a negative determination — read, not dumping steel here — and won’t have its imports taxed upon import by Customs and Border Protection.

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