Commodities Roundup: Stainless surcharges rise; supply-side fears support metals; housing starts surge

commodities

For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts from particular commodity markets.

MetalMiner, a sister site of ours, scours the landscape for what matters. This week:

Stainless steel surcharges jump again

In this month’s Stainless MMI report, MetalMiner’s Maria Rosa Gobitz noted stainless steel surcharges gained last month for the third straight month.

“While stainless demand continues to remain in line with U.S. flat-rolled producer supply, alloy surcharges are rising for the third month in a row,” she wrote.

“Why? The surcharge increases are again due to an increase in the nickel price.

“Over the past month, the LME nickel price increased over 6% to $14,433/mt as of Aug. 6.”

Supply-side support

Meanwhile, Stuart Burns explained how supply-side dynamics are supporting lead, copper and zinc prices.

“Both copper and zinc rely heavily on mines in Chile and Peru for ore supplies,” Burns wrote.

“That reality is a fact highlighted in a recent Mining.com report, which warned that mining companies operating in Peru are being forced to keep operations suspended.

“In addition, companies are halting new operations as confirmed coronavirus cases in the country surged past 300,000, with several of the new infections happening in the copper sector.”

Europe targets flat-rolled aluminum imports from China

Meanwhile, in trade enforcement news, the European Commission has launched an anti-dumping probe related to imports of flat-rolled aluminum products from China.

“It’s obvious that Chinese firms aren’t respecting the global rules of free and fair trade, and the numbers show they are dumping more and more products on our market,” Aluminium Today quoted European Aluminium Director General Gerd Gotz as saying. “The volumes of excess capacity they have built up are so massive, they could replace the entire European aluminium production.”

U.S. housing starts surge

In the housing market, recent data from the U.S. Census Bureau and the Department of Housing and Urban Development offered a rare bright spot amid this year’s economic doldrums.

U.S. housing starts in July reached a seasonally adjusted annual rate of 1.50 million units, marking a 22.6% increase from June.

The July rate also marked a 23.4% year-over-year increase.

Liberty House continues to add to portfolio

Meanwhile, Burns also covered the growing portfolio of Liberty House Group, a subsidiary of Sanjeev Gupta’s GFG Alliance, as Liberty is adding additional French steel assets.

“The plan will see the Hayange mill in Moselle, which manufactures rails, to be supplied with steel made from recycled scrap at the Ascoval plant in Saint-Saulve,” he wrote.

“As a result, Liberty will bring the two together as a combined business.

The group’s largest acquisition to date is the $500 million purchase of Rio Tinto’s Dunkirk aluminum smelter in 2018.”

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