I want to say a huge ‘thank you’ from all of us at SMU to all of you (more than 1,500!) who attended Steel Summit this year.
We appreciate you taking time out of your busy schedules to join us – whether up on stage, submitting thoughtful questions, or catching up over a drink and bite to eat.
Also, a big shoutout to everyone at SMU and at CRU who made this event possible. It’s no understatement to say that we have a fantastic team. They kept everything running smoothly – from the registration booths and the AV to the FOAM-O coffee (iykyk).
If I have one regret, it’s that I’m so busy at Summit that I don’t have time to catch up with more of you personally. (Or not for long if I do.) But I look forward to continuing the conversation in the SMU newsletter, in our upcoming Community Chats webinars, and next year in Atlanta.
Speaking of next year, I wanted to draw your attention back to the results of the snap polls we conducted on Day 1 of Steel Summit. We asked folks to predict where hot-rolled (HR) coil prices and demand would be a year from now. We also asked about Nippon Steel’s roughly $15-billion acquisition of U.S. Steel and this year’s presidential election.
We’ve been writing for a lot of this year about how prices were falling (or not going up as much as expected), how inventories have been high, how there are concerns about demand, and how sentiment has been a little lackluster. So I was surprised, to be honest, at how bullish people were about 2025.
SMU’s hot-rolled (HR) coil price had been in the $600s per short ton (st) from mid-June until just before Steel Summit. But during a snap poll at the event, nearly half predicted that HR would be $700-799/st in August 2025.
Another 33% were even more bullish; they said prices would be $800-899/st this time next year. Very few said they would be below $600/st or above $900/st.
We haven’t really seen “mini-cycles” since the pandemic. Remember the “before times” – that distant galaxy called 2019. Perhaps we’ll see mini-cycles again but at a somewhat higher level?
There was also a lot of optimism that demand would be better next year. Two-thirds of respondents said that demand would be better in August 2025. Only 10% thought demand would be lower.
Why might that be? Maybe this: There was a lot of talk at the conference about how we could see more restrictions on imports next year – whether from tariffs on downstream products, a carbon border tax of some sort, actions against transshipment, or AD/CVD cases.
Just a few examples: There was chatter at the conference about a potential trade action against coated sheet from Vietnam. On the long products side, there was talk of potential trade cases on rebar from Algeria and Egypt. And downstream, Barry Zekelman mentioned his frustrations with pipe from Oman and conduit from Mexico.
There was also some optimism that infrastructure spending and other federal stimulus could have more of an impact next year. Is it finally enough to move the needle on demand?
We, in addition, asked whether Nippon Steel’s $15-billion acquisition of U.S. Steel would close. Roughly two-thirds of you said that it would.
That’s a huge change from earlier this year when the deal became a political football with Cleveland-Cliffs and the United Steelworkers (USW) union vehemently opposed to the deal.
And keep in mind that we took our poll before Nippon Steel announced that it would invest “no less than $1 billion” in U.S. Steel’s Mon Valley Works near Pittsburgh and $500 million at its Gary Works in northwest Indiana. Both are represented by the United Steel Workers (USW) union.
That’s notable because you could make the case that a lot of the bad blood between U.S. Steel management and the USW stems from a decision in April 2021 to shift a planned $1-billion investment in Mon Valley to its non-union Big River Steel mill in Arkansas.
The USW still opposes the deal. And I think it’s risky to understate the union’s influence in an election year – especially when votes in western Pennsylvania, a swing area of a swing state, could make the difference between winning or losing the White House.
But as several speakers at Summit said, politics aside, the transaction just makes sense. It’s the kind of knowledge and information transfer that the US should support – in this case, from Japan, one of our closest allies, to the States.
I was a little concerned ahead of Summit that things would get heated this year over politics, especially with a very close (according to current polls) election between former President Donald Trump and current Vice President Kamala Harris.
Most folks who attended the Summit think Trump will win.
Michael Smerconish did a good job of setting the tone for the conference in his keynote address. He encouraged everyone to get out of their bubbles, especially the social media ones. And to consider other points respectfully – which I think we mostly did. (Ha, maybe to the chagrin of some who were hoping for more sparks.)
While the election matters greatly on a lot of issues, one theme that came across again and again was that one of the few subjects on which both parties agree is trade policy, especially as it relates to steel.
Trade experts and other speakers also noted that both parties, along with much of the rest of the world, has woken up to the problem of excess capacity in China – with Canada recently joining those ranks.
Analysts and policy experts also pointed out that both the US and Europe want to account for imports coming in from countries whose steelmakers emit more carbon. Even if they’re still pretty far apart on the details of how to do that.
If there are differences among Republicans and Democrats, the consensus seemed to be that a second Trump administration might take a harder line on allies like Europe and Mexico. But, as several speakers noted, former President Obama first cracked down on steel imports with a wave of AD/CVD cases while he was in office.
President Trump more or less continued that effort, albeit through Section 232. It was perhaps not the tool designed for the job, but one that got it done. (Sort of like hammering a nail with a shovel.) And President Biden has largely continued Trump’s policies. The assumption seems to be that a Harris administration would mostly follow in Biden’s steps as it relates to steel.
Steel might be lucky in that regard. Our panel on electric vehicles (EVs) noted that the election was almost an existential issue for that sector. Whether you drive (or aspire to drive) EVs or not, they said, is a pretty good proxy for party affiliation.
I was surprised to hear that. But then again, I was surprised when Smerconish talked about a Whole Foods/Cracker Barrel divide. I didn’t realize that existed, which is apparently proof that I’m from a swing state. (Here we go, Steelers!)
Frankly, it’s hard to pull just a few key themes from such a big event spanning three days with nearly 40 speakers. And if you’re having trouble sorting it all out, just remember Zekelman’s words of wisdom at the end of his fireside chat: “We’re all morons.”
True, that. It’s important to be humble – whether that’s in assessing markets or in life. And with that, my friends, I’m signing off for a long weekend of camping/glamping with family and friends.
PS – We will keep our website humming on Friday. But there will be no Sunday newsletter this week in observance of Labor Day. I and the rest of the SMU team look forward to catching up with yinz again on Tuesday, when we’ll send our next newsletter.
Some of you have asked me when the next SMU Steel Summit will be. Mark your calendars for Mon-Weds, Aug. 25-27, 2025. It’s sure to be another informative and entertaining event.
On Aug. 14, the chairman of the world’s largest steel producer, China’s Baowu Steel Group, had some alarming news. He told staff at the firm’s mid-year meeting that conditions in China are like a “harsh winter” that will be “longer, colder and more difficult to endure than expected.” Ferrous markets reacted aggressively over the next three trading sessions sending the rolling 2nd month iron ore future down to an intraday low of $91.80/per metric ton (mt), its lowest since November 2022. Six trading sessions later, iron ore was back above $100/mt.
The panic in iron ore took Turkish scrap futures down with it, but then Turkish scrap rebounded alongside ore. What is even more interesting is Turkish scrap continues to bounce off its $355 support level as indicated by the yellow dashed line.
Over the past few years, financial market participants have increased their footprint in HRC futures. As a result, Midwest HRC futures can be heavily influenced at times by developments on the global ferrous or macroeconomic front. For instance, HR futures trading volume ground to a halt through the first seven trading sessions of August as the summer doldrums arrived in full force. The news out of China and panicked-selling in iron ore spilled into the Midwest futures market. Trading volume exploded as futures tanked.
This chart shows the sell-off during the week of Aug. 12 with the October future leading the group lower down $64 week over week.
Just like in ore and Turkish scrap, Midwest HRC futures said “this aggression will not stand” and rebounded on heavy volume, essentially erasing all of the previous month’s declines. Despite the news and subsequent moves in iron ore, every month from August 2024 to June 2025 saw no more than a $13 gain or a $13 loss over the two-week period. If you were one of the lucky ones to leave on vacation on Aug. 9 and return on Aug. 23, you would look at the curve and think, I am happy to have chosen those two weeks as I didn’t miss out on anything!
Let’s get technical. If you liked the double-bottom, you are gonna love the triple-bottom…
On the one hand, we have the comments from Baowu to add to the long list of bearish factors. However, if you are a contrarian or bullish, or a contrarian bull, or even a bullish contrarian, then you will be feeling “pretty good” about the chart of the rolling 2nd month Midwest HRC future.
The chart has formed a “triple-bottom,” having bounced off the $650-660 area in June, July, and August. A triple-bottom pattern is characterized as a trend-reversal pattern. In addition, the future traded above and has remained above its seven-month downtrend in blue. The next test sits at the $770 resistance level indicated by the dotted white line.
“Remember, one man’s ceiling is another man’s floor,” or previous support that is broken below becomes resistance when the price rebounds. If the rolling 2nd month can break above $770, then perhaps we will see another squeeze similar to the four sharp rallies experienced in HRC futures since the start of 2023.
In the 1980s, there were so many political moderates in the Senate that they had their own gathering — the Wednesday Lunch Club. It’s the type of gathering that would be unheard of in today’s sharply divided political climate.
Back then, lawmakers like Republican Nancy Kassebaum broke bread with Democrats like Arlen Specter. And both parties would crow about being the party of the Big Tent.
“That Wednesday Lunch Club couldn’t fill a high top for two today,” said Michael Smerconish, Sirius XM radio and CNN television host.
Speaking this week at Steel Summit 2024 in Atlanta, Smerconish addressed today’s polarization, as well as how we can address it.
“What’s gone wrong? A number of things, including the fact that people who do what I do for a living on radio and television, media personalities, now have outsized influence over primary voters, and they have shifted the debate to the extremes,” Smerconish told the crowd. “A polarized media is great for ratings, but bad for the country.”
He cited the late Sen. John McCain, who spoke about the increasing inability of Congress members to compromise with one another for the good of the country. At the end of his tenure, McCain urged people to “Stop listening to the bombastic loudmouths on the radio and television and the Internet. To hell with them. They don’t want anything done for the public good. Our incapacity is their livelihood.”
Another factor Smerconish noted is that people have begun to self-sort and are becoming less likely to interact with people who believe differently, have different lifestyles, or belong to another social class. Social media has made it that much easier to stay in a bubble of like-minded thinking while isolating us from our communities. Fewer people are active in their places of worship, bowling leagues, Elks clubs, or subscribe to their local newspapers, to name a few.
One way to reestablish community engagement is what Smerconish calls “The Mingle Project,” which is to engage with your neighbors and communities face to face.
Asked by an audience member how our political leaders can encourage mingling, Smerconish warned, “Don’t wait for those that I’m most critical of to solve this problem, because it suits their objective.”
“They’re not going to fix the problem. The problem gets fixed when we realize what’s driving it and to start to take small steps in our own communities to push back,” he said.
Steel mill lead times were steady to higher this week for all products tracked by SMU, according to buyers responding to our latest market survey.
Sheet lead times marginally increased this week, an ongoing trend since late July. We attribute this to buyers restocking ahead of upcoming mill maintenance outages rather than recovering demand. Plate lead times saw little change from our previous market check.
Current lead time averages are a few days longer than levels seen a month ago but remain near historical lows for both sheet and plate products.
Table 1 below summarizes current lead times and recent trends.
Our lead time ranges’ upper and lower limits are almost identical to the mid-August limits, with only two changes seen this week. The shortest lead time in our Galvalume range has increased from six weeks to seven weeks, and the upper range for plate lead times has declined from six weeks to five weeks.
Just over half (51%) of respondents this week remarked that current mill production times were within typical levels. The remainder said lead times were shorter than normal (41%), while 8% commented they were slightly longer than normal.
We also polled buyers on where they think lead times would be two months down the road. Most respondents believe lead times will be flat through October (60% this week vs. 66% in our prior survey). Only 24% forecast production times will extend further (down from 29% previously). The percentage of buyers expecting lead times to shrink increased (17% this week compared to 5% in mid-August).
“Mills will try to manipulate lead times with outages, but they can easily make up the downtime by running at 80% plus capacity the days they are operational.”
“They can’t get much shorter.”
“Flattening – after extending a little bit more in the near future.”
“Even with the planned outages, we are expecting pretty weak demand in Q4 at the mill level.”
Figure 1 below tracks lead times for each product over the past two years.
To better highlight trends, we can view lead time data on a three-month moving average (3MMA) basis to smooth out the variability in our biweekly readings. Through the end of August, 3MMA lead times were steady to slightly down for all sheet and plate products, remaining near lows not seen since late 2023. This downward trend has been evident for the last six months.
The hot rolled 3MMA is now at 4.80 weeks, cold rolled at 6.67 weeks, galvanized at 6.94 weeks, Galvalume at 6.86 weeks, and plate at 4.64 weeks.
Figure 2 highlights lead time movements across the past four years.
Note: These lead times are based on the average from manufacturers and steel service centers participating in this week’s SMU market trends analysis survey. SMU measures lead times as the time it takes from when an order is placed with the mill to when it is processed and ready for shipping, not including delivery time to the buyer. Our lead times do not predict what any individual may get from any specific mill supplier. Look to your mill rep for actual lead times. To see an interactive history of our steel mill lead times data, visit our website. If you’d like to participate in our survey, contact us at info@steelmarketupdate.com.
SMU’s Steel Buyers’ Sentiment Indices saw significant recoveries this week. Both our Current and Future Indices are now up to multi-month highs, indicating continued optimism among steel buyers.
Every two weeks, we poll hundreds of steel buyers about their companies’ chances of success in today’s market, as well as business expectations three to six months from now. We use this information to calculate our Current Steel Buyers’ Sentiment Index and our Future Sentiment Index, a measure we have been tracking since 2008.
Through our latest market survey results, the SMU Current Steel Buyers’ Sentiment Index jumped 10 points from two weeks prior, now back in territory last seen in early June. Current Sentiment has increased each of our last two surveys following late July’s multi-year low. Future Buyers Sentiment surged 17 points from mid-August, moving from a 14-month low to a nine-month high.
What could be driving this recovery – is the market genuinely improving? We advise caution, attributing the surge to increased optimism following our annual SMU Steel Summit Conference. Historically, our Steel Buyers’ Sentiment Indices have shown moderate gains in the weeks after each Summit, with upticks in market enthusiasm observed in seven of the past 10 years following the event.
SMU’s Current Buyers’ Sentiment Index rose to +48 this week, recovering 10 points from two weeks prior (Figure 1). Recall that Current Sentiment had fallen to +34 in both the first and last week of July, which were the lowest readings recorded since August 2020. Year to date (YTD), Current Sentiment has averaged +53 across the first eight months of 2024, significantly lower than the 2023 YTD average of +69. This time last year Current Sentiment was +55.
SMU’s Future Buyers’ Sentiment Index measures buyers’ feelings about business conditions three to six months down the road. This index jumped 17 points to +72 this week. This is now the highest Future Sentiment reading seen since November 2023. Recall that just two weeks prior it fell to the lowest value seen in over a year (Figure 2). Future Sentiment has averaged +64 since the beginning of 2024, down just two points from the same period of 2023. Future Sentiment was +66 the same week one year ago.
Measured as a three-month moving average, Buyers’ Sentiment moved in differing directions this week. The Current Sentiment 3MMA eased yet again this week, now down to a four-year low of +40.09. The Future Sentiment 3MMA changed pace, increasing to +64.34 following mid-August’s five-month low (Figure 3).
“We seem to buy wisely and competitively. We’ll be OK.”
“Positive – solid customer base.”
“Election years always slow us down, so after November we should see an increase in our market.”
“Our business continues to be pretty solid, but we continue to capture market share, which helps.”
The SMU Steel Buyers Sentiment Index measures the attitude of buyers and sellers of flat-rolled steel products in North America. It is a proprietary product developed by Steel Market Update for the North American steel industry. Tracking steel buyers’ sentiment is helpful in predicting their future behavior. A link to our methodology is here. If you would like to participate in our survey, please contact us at info@steelmarketupdate.com.
US hot-rolled (HR) coil prices continue to move higher, surpassing tags for offshore material on a landed basis.
Domestic prices, improving on the heels of firmer US mill offers, pulled ahead of import tags as the stateside gains this week were sharper than the increases in overseas markets.
SMU’s check of the market on Tuesday, Aug. 27, put domestic HR tags at $700 per short ton (st) on average, up $25/st from last week. (Note that stateside hot band, while up $65/st from a 20-month low, remains $145/st below a recent high of $845/st in early April.)
Domestic HR is now theoretically almost 3% more expensive than imported material. Prices were 0.3% cheaper last week, and nearly 12% cheaper just last month.
In dollar-per-ton terms, US HR is now, on average, $19/st more expensive than offshore product (see Figure 1). That compares to $2/st cheaper on average last week, and is a $91/st shift from just a month ago when US tags were roughly $72/st cheaper than offshore material.
The charts below compare HR prices in the US, Germany, Italy, and Asia. The left-hand side highlights prices over the last two years. The right-hand side zooms in to show more recent trends.
This is how SMU calculates the theoretical spread between domestic HR coil prices (FOB domestic mills) and foreign HR coil prices (delivered to US ports): We compare SMU’s US HR coil weekly index to the CRU HR coil weekly indices for Germany, Italy, and East and Southeast Asian ports. This is only a theoretical calculation. Import costs can vary greatly, influencing the true market spread.
We add $90/st to all foreign prices as a rough means of accounting for freight costs, handling, and trader margin. This gives us an approximate CIF US ports price to compare to the SMU domestic HR coil price. Buyers should use our $90/st figure as a benchmark and adjust up or down based on their own shipping and handling costs. If you import steel and want to share your thoughts on these costs, please get in touch with the author at david@steelmarketupdate.com.
As of Thursday, Aug. 29, the CRU Asian HRC price was $434/st, up $5/st vs. the week prior. Adding a 25% tariff and $90/st in estimated import costs, the delivered price of Asian HRC to the US is approximately $632/st. As noted above, the latest SMU HR price is $700/st on average.
The result: US-produced HRC is theoretically $68/st more expensive than steel imported from Asia. That’s up $19/st vs. last week as stateside prices increased at a sharper rate than Asian tags. But it’s still a far cry from late December when US HR was $281/st more expensive than Asian product.
Italian HR coil prices were flat at $603/st this week. After adding import costs, the delivered price of Italian HR coil is, in theory, $693/st.
That means domestic HR coil is theoretically $7/st more expensive than imports from Italy. That is up $23/st from last week. Just five months ago, US HR was $297/st more expensive than Italian hot band.
CRU’s German HR price moved to $628/st, which is $4/st higher than last week. After adding import costs, the delivered price of German HR coil is, in theory, $718/st.
The result: Domestic HR is theoretically $18/st cheaper than coil imported from Germany, up from a $39/st discount last week. At points in 2023, in contrast, US HR was as much as $265/st more expensive than imported German hot band.
Notes: Freight is important when deciding whether to import foreign steel or buy from a domestic mill. Domestic prices are referenced as FOB, the producing mill, while foreign prices are CIF, the port (Houston, NOLA, Savannah, Los Angeles, Camden, etc.). Inland freight, from either a domestic mill or from the port, can dramatically impact the competitiveness of both domestic and foreign steel. It’s also important to factor in lead times. In most markets, domestic steel will deliver more quickly than foreign steel. Effective Jan. 1, 2022, Section 232 tariffs no longer apply to most imports from the European Union. It has been replaced by a tariff rate quota (TRQ). Therefore, the German and Italian price comparisons in this analysis no longer include a 25% tariff. SMU still includes the 25% Section 232 tariff on prices from other countries. We do not include any antidumping (AD) or countervailing duties (CVD) in this analysis.
Hybar is progressing and expanding its plans to supply the US market with environmentally friendly rebar while having the highest-paid steelworkers and remaining profitable.
Hybar CEO David Stickler and SMU Managing Editor Michael Cowden shared a candid conversation about those plans on Tuesday morning at the SMU Steel Summit, held this week in Atlanta.
Hybar’s initial plan, announced in November 2022, called for constructing two rebar mills. That plan has since grown. Stickler said this week the new goal is for “three or four bar mills,” and then possibly a flat-rolled steel mill.
Stickler also revealed that an important announcement is forthcoming in the coming week: A Fortune 300 company has agreed to take a 20% stake in Hybar, and that will allow the company to accelerate its growth and expansion plans.
Hybar’s first mill, under construction in Osceola, Ark., is on track to start up 10 months from now. When it does, Stickler believes it will be met by some favorable tailwinds in an expanding market.
He cited nearshoring in manufacturing and government infrastructure spending as solid drivers of rebar demand going forward.
While there are some questions about a potential oversupply of rebar in the US, Stickler believes older mills will have to shut down. Some mills are 50+ years old and will simply be unable to compete with a brand new mill’s cutting-edge technology, he pointed out.
Hybar plans now to establish three or four rebar mills in the US, and then potentially a flat-rolled steel mill. A flat rolled mill is dependent on the expiration of the non-compete agreement Stickler signed with U.S. Steel after it purchased Big River Steel (BRS).
The location of Hybar’s second mill is still undecided, with potential sites identified in South Carolina, Georgia, Idaho, and Washington.
Stickler runs his companies as lean as possible.
He said Hybar is going sell the 630,000 tons of rebar its first mill produces annually with just two sales professionals. But “if we keep going the way we’re going, maybe I don’t need any” salespeople, he remarked.
The company previously announced that it had already pre-sold 25% of its future production. And another big deal is coming soon, as Stickler said on Tuesday that, “Within a couple of weeks, we’ll have 50%” sold.
He said the big buyer had previously sourced rebar from overseas suppliers, “but they had enough of that nonsense” and so will be sourcing from Hybar once its mill comes online.
This clearly shows that Hybar will be able to displace imports with its product, according to Stickler.
Stickler’s management philosophy involves transparency, keeping bureaucracy to a minimum, and creating a culture of continuous improvement.
He said his “goal is always to have the highest paid steelworkers in the world,” and believes he can achieve this by having everyone focused on profitability and productivity. With profitability as the only key performance indicator (KPI), “Everyone is focused on driving profits,” he said.
Mill operators, salespeople, security and janitorial staff, executives, every employee’s weekly bonus is based on that KPI to show that “we’re all tied together,” commented Stickler.
Stickler remains unconvinced that the steel industry will be able to achieve a “green steel premium.”
When he helped set up the first BRS plant in Arkansas, the mill achieved LEED certification. People weren’t interested in paying more because it was LEED certified, he said, but some customers were willing to buy from them just because it was environmentally friendly.
“We did not achieve a green premium,” he remarked. “I’m not so sure that a green premium that everybody talks about is real. Environmental sustainability is a tiebreaker, not a game changer.”
“Maybe” they’ll be able to get $20-35/ton more from buyers for the most environmentally sustainable rebar, “But I certainly didn’t raise a billion dollars for our solar steel port and steel mill expecting a green premium,” he added.
Steel buyers found mills slightly more willing to negotiate spot prices this week, according to our most recent survey data. Though this negotiation rate has ticked up vs. our previous market check, overall rates have been trending downward since July’s highs.
Every other week, SMU polls hundreds of steel market executives asking if domestic mills are willing to negotiate lower spot pricing on new orders. As shown in Figure 1, 77% of all buyers we surveyed reported that mills were willing to talk price on new orders this week. This is two percentage points higher than our previous rate, but down from the 80-92% range seen across July.
As seen in Figure 2, negotiation rates remain relatively high for both sheet and plate products, ranging from 71-88%.
The negotiation rate for hot-rolled coil increased four percentage points from mid-August to 71% this week, now down to the lowest rate seen in five months. Buyers of cold-rolled products reported a negotiation rate of 71%, an eight-percentage point recovery from our prior survey. The negotiation rate on galvanized products inched up three percentage points to a one-month high of 83%. Galvalume rates also ticked higher to 82%. Negotiation rates on plate products continue to be the strongest, easing one percentage point from mid-August to 88%.
“Deals can still be made but require significant volume. However, those deals are still $50-75 per ton higher than deals offered just 30 days ago.”
“Big tons will get you a deal.”
“On large orders- 2,000 tons or more.”
“Yes, with volume.”
“Very selectively.”
Note: SMU surveys active steel buyers every other week to gauge their steel suppliers’ willingness to negotiate new order prices. The results reflect current steel demand and changing spot pricing trends. Visit our website to see an interactive history of our steel mill negotiations data.
SSAB has appointed Johnny Sjöström as president and CEO of the Swedish steelmaker.
Sjöström will start his new position on Oct. 28, succeeding Martin Lindqvist.
Lindqvist had previously announced he is leaving the company for a board career. He will remain in his current position until Oct. 27.
Sjöström has been head of SSAB Special Steels since 2019. He worked to develop and grow the company’s business for special steels and oversaw the “green transformation” of SSAB’s steelworks in Oxelösund, Sweden.
“During the past years, I have worked closely with Martin Lindqvist, and I look forward to continuing to deliver on the company’s long-term strategy together with all our skilled employees,” Sjöström said in a statement on Thursday.
Sjöström has also spoken at SMU Steel Summit and appeared on an SMU Community Chat in March 2022.
Dan Needham has been with Nucor for 24 years, and he said the key to that longevity has been the company’s culture.
Needham, EVP of commercial for the Charlotte, N.C.-based steelmaker, sat down for a Fireside Chat on Wednesday at SMU’s Steel Summit 2024 in Atlanta. Conducting the interview was Philip K. Bell, president of the Steel Manufacturers Association (SMA), of which Nucor is a member. (Needham also spoke at Steel Summit last year.)
Integrity, honesty, trust, open communication, and teamwork, these are just some of the hallmarks driving Nucor’s culture. Right up there with those is also safety.
“And that’s our most important thing, safety, and how we approach that and drive safe processes in everything we do,” Needham said.
In a wide-ranging talk, Needham spoke extensively with Bell about Nucor’s weekly Consumer Spot Price (CSP) for hot-rolled coil, introduced in April.
Needham said if you’re in the flat-rolled business, you understand the word “volatility” very well.
He noted that the velocity of that volatility in pricing has seemed to increase in the last few years.
Thinking about the underlying forces behind that, “we believe that it’s really a disconnect between underlying demand and order practices,” Needham said.
“And so we introduced the CSP several months ago to provide real-time, relevant, transparent pricing signals to our customers around hot-rolled coils,” he added.
Regarding how the price is faring so far, Needham commented, “I think it’s still too early.”
“I think most of our customers understand why we’re doing it, but they’re waiting to see is it going to work,” he said. “And I think we’re in the same boat there.”
Needham said what determines the CSP is market dynamics, and that means evaluating key market indicators.
“So that’s going to be customer inventories, it’s going to be order books, it’s going to be import activity, and then also feedback from our customers,” Needham said. “So all of those things are considerations.”
He stressed that “it’s not just about emotions or what we think it is, there’s underlying data behind it.”
“And we’re partnering with our customers to think about: How does that help impact this volatility?” Needham said.
Bell asked Needham how Leon Topalian, chair, president, and Nucor CEO, was able to select such a widely respected leadership team in the industry.
Needham said it comes down to being given “a common mission and a common vision” of where they are going as a company.
Whether it’s investing in cutting-edge, nuclear technology, data systems, or in garage door firms, the common vision gives “the opportunity to execute together as a team.”
Speaking to that, the company now has 32,000 employees, which it terms “teammates.”
“With the low turnover, we grow up together, we’re brothers, we’re sisters, we’re family,” Needham said.
Some may remember the pop culture idea of “Six Degrees of Kevin Bacon” where you try to connect any actor to fellow thespian Kevin Bacon in the shortest number possible.
Needham quipped that he was at a meeting a few years ago with a number of other Nucor employees.
Looking around, he realized that he knew everyone in the room, “and probably most of them I had worked with somewhere on my journey.”
Recounting this to someone else at the meeting, the other employee turned to him and said, “You’re like Kevin Bacon.”
With a surplus of ferrous scrap supply in the US, Steel Dynamics Inc. (SDI) said one key to maintaining costs is watching the price of conversion.
When it comes to feeding electric arc furnaces (EAF), “Our Omni team is working very closely with us to make sure we have access to the right materials,” said Barry Schneider, president and COO of the Fort Wayne, Indiana-based steelmaker. SDI also is one of the largest metals recyclers in North America and owns several Omni recycling operations.
Speaking Monday at Steel Summit 2024 in Atlanta this week, Schneider said the company pays close attention to the conversion costs of turning scrap into hot-rolled steel.
“As many of you know, the price of scrap is, in some cases, higher than the price of hot band,” he said.
When asked about conversion costs, whether they may be in the $100 range or, perhaps $200, Schneider declined to specify a figure, instead jokingly saying it was “somewhere in that range.”
“Over the last 30 years that we’ve been operating, I will tell you that our conversion cost hasn’t drifted more than 25%, and that’s with the different inflationary pressures that we see.”
One cost advantage to EAFs is that they can be turned on and off.
“A blast furnace has to be — they’re on or they’re costing a lot of money,” he said. Blast furnaces may make iron cost effectively, but it also means a high price tag as the supply chain has a lot of carbon and a lot of energy, he noted.
But he doesn’t see an end to blast furnaces any time soon.
“EAFs are a great technology, and as you incorporate iron making in that for the flat-rolled side, that becomes the bridge,” Schneider said. “Worldwide, we’re starting to see projects that are doing just that. Think of the best of what you can get from liquid metal, from iron, what you can do with scrap, and how efficiently you can do that.
“I don’t see a situation where the furnace will start shutting down,” he said. “It would have to be pretty dire in that situation. And that’s where the conversion cost is so important, to be the last guys that stay in the fight.”
Copper content can be a challenge when handling obsolete scrap. But there are ways for ferrous recyclers to extract more value from the red metal.
“As we talk about the quality of copper, it becomes the bad guy,” Schneider said. “It’s not good for flat-rolled steel.”
One key is to make sure the copper level is appropriate for the end user.
“There’s value in all those things that we take out of that supply chain, from zorba to twitch, these things have different metals in them that we find of value.”
To that end, SDI has been investing in technology in shredding yards.
In SDI’s most recent earnings call in July, Schneider said the metals recycling team is “partnering even more closely with both our steel and aluminum teams to expand scrap separation capabilities through both process and technology solutions. This will help mitigate potential prime ferrous scrap supply issues in the future. It will also provide us with a significant advantage to materially increase the recycled content in our aluminum flat rolled products and increase our earning potential.”
“The technology we have, we’re deploying in more and more of our scrap operations. But it’s just as important that when shred shows up at the mill, we know when to use it,” he said.
For example, he said, if you’re shooting for 0.2 carbon, it’s great. If you get a 0.25, it’s bad. But if you get a 0.15 and the customer doesn’t really need that, you wasted your money, Schneider described.
“The tools the mills are developing specifically are known of how to track industrial how to logistically handle it, when to put into furnace.”
Schneider said the bottom line to recycling is that it has a return.
“We’re not doing this for political reasons or for virtue,” he said. “We’re doing it because we have a great footprint.”
SDI uses about 85% scrap in flat-rolled steel, and more in other products.
“I describe this as the farm-to-table of steel, where we use local resources, local people and have regional customers,” Schneider said.
SDI said it has hit its 2025 decarbonization goals. Now it’s looking to 2030.
“We believe these are return items,” Schneider said. “We’re going to make money on these projects. This isn’t a charity. It’s just another way to do business.”
On Wednesday, Nippon Steel announced additional investments it plans to make in U.S. Steel facilities as part of its pending purchase of the iconic American flat-rolled steelmaker. The two companies still anticipate the deal’s closing by the end of this year.
With an investment of “no less than $1 billion,” Nippon said it would replace and/or upgrade the existing hot-strip mill at USS’ Mon Valley Works outside Pittsburgh.
“Nippon Steel believes that a transformed Mon Valley Works will expand U.S. Steel’s ability to serve a broader range of markets and customers, create additional high-grade steel capabilities, strengthen the competitive positioning of Mon Valley’s blast furnace operations, and secure American steel supply,” it said in a statement.
Additionally, the Tokyo-based company said it will revamp blast furnace #14 at the USS Gary Works in northwest Indiana. The $300-million investment will extend the facility’s operational life by 20 years, Nippon said. That furnace has a daily ironmaking capacity of 7,450 short tons, according to SMU’s Blast Furnace Status chart.
Nippon also said it sees “numerous opportunities for technology transfer to U.S. Steel following the closing of the transaction to reduce environmental footprint and extend the longevity of the USW-represented facilities.”
It noted that these investments are conditional on the deal’s closing and regulatory approvals. Further engineering studies will determine the design and specifications of those investments.
“The investments will require significant expenditures beyond calendar year 2026 and are incremental to” the previously announced $1.4-billion capital commitment for maintenance and capex projects at union-represented facilities, Nippon said.
The investment promises are assumed to be a part of Nippon’s courting of the United Steelworkers (USW) union, which has so far been unsupportive of the transaction.
If you recall, in 2019, U.S. Steel announced a $1.2-billion investment project for its Mon Valley plant. It announced a few months later it was acquiring a stake in Big River Steel. Then, in 2021, it upset USW leaders and members with the surprise announcement it was canceling the Mon Valley investment. Again, just a few months later, USS then announced it would invest $3 billion to build a new EAF steel mill.
So, having already been burned by USS investment promises, the union was quick to respond to Wednesday’s announcement. It said Nippon was only paying lip service to its concerns while avoiding actual input from union leaders and members.
“Nippon talks a big game, but at the end of the day, a press release is not a contract,” USW said in a message to members.
It reminded members that U.S. Steel, under David Burritt’s leadership, broke its previous commitment to invest at Mon Valley and chose instead to buy Big River Steel.
“We can’t trust in what USS and Nippon are telling us,” the USW stated.
Timna Tanners, managing director of Wolfe Research, said this week that the union’s opposition to the deal makes “perfect sense” right now.
“This is hardline negotiation tactics,” she said onstage at the 2024 SMU Steel Summit in Atlanta. “They need to exercise their play into the election and get the most maximum possible benefits out of Nippon.”
The tactics are “aggressive,” but the union seems to already be softening its position, she noted. She believes opposition to the deal just doesn’t make sense beyond November.
After Biden and Trump came out with comments against the merger earlier this year, Tanners put the deal’s probability of closing at less than 50%. However, she raised the probability after Harris became the Democratic candidate, noting that the presidential contender still has not taken a position on the USS/Nippon deal.
Wolfe Research’s “view is that it’s more likely than not to close. So we put a greater than 50% probability,” Tanners said on Monday.
Days one and two of SMU’s Steel Summit 2024 are officially in the books. We covered a lot of ground, and the agenda sure did deliver.
While it seems we’re at something of a crossroads in the market with sheet prices and lead times ticking up, mills remain willing to talk price, and inventories seem a bit bloated, according to our most recent data.
But this comes as fall maintenance outages approach that could take more than 1 million short tons of capacity out of the market. We’re also potentially looking at some trade actions that could further limit supply.
In our outlook panel yesterday, Citi’s Alex Hacking warned that the combination of weak demand and overcapacity in China could spell trouble for the world.
Tristan Gresser of BNP discussed the likelihood of some of those trade actions. And Timna Tanners of Wolfe Research said that new capacity continues to come into the market – not only when it comes to hot-rolled coil (think Sheet Storm) but also when it comes to new galvanizing capacity (think Galv Galore). And this might shrink the premium between HR base prices and tandem products.
Most of you predicted during the conference’s opening poll that steel prices would be higher next year. You also think that demand will be better next year, with an expected boost of at least 5% over this year.
Michael Smerconish delivered a compelling opening keynote, The Mingle Project, that was both a diagnosis and a prescription of our divided political landscape.
Barry Schneider, Steel Dynamics president and COO rounded out day one, highlighting a vast array of developments in flat-rolled steel and Aluminum Dynamics. We also talked about his days as a guitar player in a rock and roll band playing gigs at Mr. Peabody’s Pub in Cleveland.
Hybar CEO Dave Sticker sat down with SMU Managing Editor Michael Cowden to talk about the latest developments at the new player in the rebar market, the outlook for rebar and construction, and the long-term outlook for scrap. With a plan to build another three or four rebar mills, he was rather bullish on all of them.
Barry Zekelman was again a crowd favorite, weighing in on trade dynamics and policy, mill consolidation, and the potential impact of the presidential election on steel.
And while we heard from Dr. Anirban Basu on his latest economic outlook with a Clint Eastwood themed talk, we also learned about the low Uber rider rating he has collected from his “off-putting” economic questions during ride-share trips.
We also had several great panels covering trade, flat-rolled end markets, and recycled metals. And day two closed with an exclusive interview with Alan Kestenbaum, executive chairman and CEO of Stelco, joining us fresh off the announcement of Cleveland-Cliffs’ acquisition of the iconic Canadian flat-rolled steelmaker.
Here’s the program for the final day of SMU’s Steel Summit on Wednesday, Aug. 28, at the Georgia International Convention Center in Atlanta:
7:30 a.m. – Doors open at GICC. All-day beverages sponsored by Felux and continental breakfast sponsored by Fifth Third Bank
8:00-8:30 a.m. – Lobby Stage: The Artful Deal – M&A, Lending and the Future of Your Steel Business
8:30-8:45 a.m. – Opening Remarks by David Schollaert, Senior Analyst/Editor, Steel Market Update
8:45-9:30 a.m. – The Future of the Auto Industry: EVs and the Shape of Things to Come
9:30-10:15 a.m. – Fireside Chat with Dan Needham, Executive VP Commercial, Nucor
10:15-11:00 a.m. – It’s Not Easy Being Green: The Challenges and Opportunities of Decarbonization
11:00-11:20 a.m. – Networking Break sponsored by Priefert Steel
11:20-12:05 a.m. – Spotlight on Service Centers: Managing Market Cycles and Inventories in Unpredictable Times
12:05-1:20 p.m. – Dr. Alan Beaulieu, President and Principal, ITR Economics
1:20-1:30 p.m. – Final Thoughts by Michael Cowden, Managing Editor of Steel Market Update
1:30-2:30 p.m. – Lunch sponsored by Priefert Steel
Close of Conference
Flat-rolled steel prices were flat or up moderately this week amid mixed signals from the market.
Supporting the gains are mill price increase announcements for hot-rolled (HR) coil and a wave of upcoming maintenance outages.
At the same time, higher inventories, concerns about demand, and a so-so outlook for the September scrap market are partially offsetting them.
SMU’s HR coil price now stands at $700 per short ton (st) on average, up $25/ton from last week. Steady gains over the past month have led to a reversal from late July, when the low end of our range fell to $600/st.
Prices for cold-rolled (CR) coil came in at $920/st on average, up $5/st from last week. Prices for galvanized and Galvalume were unchanged, and plate prices were also flat.
Our momentum indicators for sheet are pointing higher for a third consecutive week. Our momentum indicator for plate, in contrast, remains at lower.
The SMU price range is $670-730/st, averaging $700/st FOB mill, east of the Rockies. The lower end of our range is up $20/st w/w and the top end is up $30/st. Our overall average is up $25/st. Our price momentum indicator for HR remains at higher, meaning we expect prices to increase over the next 30 days.
Hot rolled lead times range from 3-6 weeks, averaging 4.9 weeks as of our Aug. 14 market survey.
The SMU price range is $880–960/st, averaging $920/st FOB mill, east of the Rockies. The lower end of our range is unchanged, while the top end is up $10/st w/w. Our overall average is up $5/st w/w. Our price momentum indicator for CR remains at higher, meaning we expect prices to increase over the next 30 days.
Cold rolled lead times range from 5-8 weeks, averaging 6.6 weeks through our latest survey.
The SMU price range is $860–950/st, averaging $905/st FOB mill, east of the Rockies. The range is unchanged from last week. Our price momentum indicator for galvanized remains at higher, meaning we expect prices to increase over the next 30 days.
Galvanized .060” G90 benchmark: SMU price range is $957–1,047/st, averaging $1,002/st FOB mill, east of the Rockies.
Galvanized lead times range from 6-8 weeks, averaging 7.2 weeks through our latest survey.
The SMU price range is $870–980/st, averaging $925/st FOB mill, east of the Rockies. This range is also unchanged w/w. Our price momentum indicator for Galvalume remains at higher, meaning we expect prices to increase over the next 30 days.
Galvalume .0142” AZ50, grade 80 benchmark: SMU price range is $1,164–1,274/st, averaging $1,219/st FOB mill, east of the Rockies.
Galvalume lead times range from 6-8 weeks, averaging 7.0 weeks through our latest survey.
The SMU price range is $920–1,040/st, averaging $980/st FOB mill. This range is flat from last week. Our price momentum indicator for plate remains at lower, meaning we expect prices to decline over the next 30 days.
Plate lead times range from 2-6 weeks, averaging 4.2 weeks through our latest survey.
SMU note: Above is a graphic showing our hot rolled, cold rolled, galvanized, Galvalume, and plate price history. This data is also available here on our website with our interactive pricing tool. If you need help navigating the website or need to know your login information, contact us at info@steelmarketupdate.com.
Leading industry analysts on Monday discussed steel prices and how they will be impacted by trade policy, consolidation, mill discipline, November’s elections, and more.
On the first day of the 2024 Steel Summit in Atlanta, CRU’s Head of Steel Americas Analysis Josh Spoores led the conversation, exploring the trends and issues driving steel and share prices in the US and abroad.
Joining him for the discussion were Timna Tanners, managing director of equity research for Wolfe Research; Alex Hacking, head of steel and mining research for Citi; and Tristan Gresser, head of steel equity research for BNP Paribas Exane.
Tanners characterized current steel demand as “not terrible, but not great,” with Hacking predicting demand will continue to weaken somewhat. This tepid demand should keep steel prices in check.
Hacking’s short-term outlook predicted a bounce in HR prices to ~$800 per short ton (st) by year’s end.
“If we look forward for the next 12 months, I do think it’s hard to argue why steel prices would be higher over the next 12 months than they have been over the last 12 months,” he said.
Tanners forecasted average hot-rolled (HR) coil prices to be around $775/st in 2025, with galvanized sheet and plate prices “staying more muted.” And with new EAF steelmaking capacity ramping up, she believes scrap prices will remain a little higher as well.
She is standing by her “Galvanized Galore” thesis: With a flood of galvanized capacity coming online in North America, she believes the galv vs. HR premium will drop further over the next two years.
On consolidation in the steel industry, Gresser believes the bulk of M&A is done. The challenge now, he said, is finding folks willing to sell their business.
Moving forward, he predicted we won’t see as many mergers and acquisitions but “consolidation by attrition.”
Tanners agreed that consolidation is mostly over with, although some smaller companies like Evraz North America and NLMK USA remain up for grabs.
She commented that Cliffs’ interest in purchasing USS is “absolutely off the table” after its agreement to buy Stelco.
“The large amount of consolidation that we saw, in theory, allows for a more disciplined production strategy, and we really saw that from 2017 to 2022,” Hacking said in his Summit presentation.
Late in 2022 and through 2023, US sheet shipments began ramping up, but mills have been unwilling to concede market share.
Nucor, for example, who had been a leader in supply discipline, is now targeting a higher share of the sheet market. Hacking suggested the start-up of the company’s new sheet mill in West Virginia in 2025 could be when it gets aggressive in going after market share. And that could cause “significant price pressure,” he noted.
“The production discipline that we’ve seen on the sheet side does appear to be breaking down,” Hacking added.
Gresser proposed that “the easiest bull case for US steelmakers is if Trump gets elected.”
“I think the former president has probably unfinished business with the steel industry,” he added.
Should Trump win in November, Gresser foresees the return of 232 tariffs on “sticky” volumes from Europe.
In the event of a Harris victory, he also foresees a bull case for steel, noting the strong prospects of carbon-based tariffs under a Harris administration.
Also, this January, the International Trade Commission (ITC) will submit its report on carbon intensity around the world to whoever wins in November.
“I think it’s going to be very easy to see any president, Republican or Democrat, act on it, whether it’s to fight climate change or to support reshoring. I think it’s the real possibility,” Gresser stated.
In his presentation, Gresser proposed that trade “is back on the agenda.” He discussed several reasons why he expects US steel imports to decline over the next year.
What could happen in the next six months? Blanket tariffs, USMCA trade frictions, carbon-based tariffs, and a return of tariffs on imports from Europe, he predicted.
He also commented that the US needs to determine what its relationship will be with its biggest trading partners, Mexico and Canada. Making a case for aggressive action against Mexico was easier a year or two ago, but now, the US actually has a trade surplus with its neighbor to the south, he pointed out.
“I think a mini trade war, or USMCA trade war, is going to be not necessarily beneficial for the US market,” he cautioned.
Tanners finished her remarks by proposing some questions on potential wildcards for the steel industry:
Durgesh Singh of Magswitch Technologies is the recipient of the 2024 SMU NexGen Leadership Award.
The NexGen Leadership Award, sponsored by the Steel Manufacturers Association (SMA) and Modern Metals and now in its sixth consecutive year, is awarded to an emerging leader within the greater steel community.
Singh was presented with the award at the SMU Steel Summit 2024 conference in Atlanta on Tuesday. As COO of Superior, Colo.-based Magswitch Technologies, Singh has over a decade of experience in management and operations.
Nicola Coslett, CEO of CRU Communities; Philip K. Bell, president of SMA; and Michael D’Alexander, publisher of Modern Metals magazine, presented him with the award.
SMU congratulates Singh and the award’s other finalists, Braden Halley of Priefert and Gilberto Padilla of Andes Coil Processors, for their contributions to the industry and for being recognized as upcoming leaders in the next generation of steel.
Whether as a guitar player in a rock and roll band or as a high-powered executive at Steel Dynamics Inc. (SDI), it’s all about the team for Barry Schneider.
Schneider, president and COO of the Fort Wayne, Ind.-based company, sat down on Monday with SMU Managing Editor Michael Cowden for a fireside chat at Steel Summit 2024 in Atlanta.
Having trained as an engineer at Rose-Hulman Institute of Technology in Terre Haute, Ind., Schneider later found work at LTV Steel. All the while, he moonlighted in a rock band, making the rounds at Cleveland clubs.
After doing a technical startup at LTV Works Cleveland, Schneider discovered, “I’m pretty good at starting things up.”
“So that became what drove me, and drove me to SDI, and right here to the Summit so many years later,” he added.
Asked to describe SDI as a company, Schneider expanded beyond the company’s roots. He said it’s more of a “materials or metals company” rather than strictly a steelmaker.
“Even though we started out in steel, we always saw the opportunity to bring value to customers through supply chains and resources,” he commented.
He noted that SDI has “quietly” become the largest recycler in North America through its OmniSource platform, with locations in the US, Canada, and Mexico. In the US, it operates 14 shredders, he said.
He also cited its New Millennium subsidiary as a fabrication company that manufactures steel joists and decks, with locations in the US and Mexico.
Additionally, SDI operates an aluminum smelter in Fort Wayne, and those are just a few examples he gave that stretch beyond the traditional steel industry.
The company has other big projects in the works, namely Aluminum Dynamics.
“We’re really excited about where the whole project is,” Schneider said. He noted three previously announced components.
“Two of them are going to be slab centers where we melt locally obtained scrap, and we go ahead and purify it, clean it, and then we cast it into a slab,” he said.
He said the slab will then make its way to Columbus, Miss., where SDI is building an aluminum rolling mill.
“So if you go to our website, it’s aluminumdynamicsllc.com, we’ve been posting videos pretty regularly,” he quipped.
SDI has said the rolling facility, with an annual capacity of 600,000 metric tons, is expected to begin operations in mid-2025. A recycled slab center in Arizona will begin production in H2’25, and another in San Luis Potosi, Mexico, will begin production in Q1’25.
Looking ahead to next year, Schneider said, “I think we have a lot of great things happening.”
Chief among them, he noted, “I really believe that Sinton really matures into a fully operational plant.”
In April, the company announced that “certain transformer limitations” had been resolved.
Note that the Sinton, Texas, flat-rolled EAF mill has an annual steelmaking capacity of 3 million short tons, according to SMU’s EAF Status Table.
Schneider also said that the four new previously announced process lines “will be absolutely ready for more business.”
Recall that two new lines are at SDI’s Heartland flat-rolled processing mill in Terre Haute. The other two are at Sinton.
“So I see 2025 as a pretty robust year,” commented Schneider. “And I say that from an order standpoint, I’m agnostic as to what the price situation may be, but we’re going to attack it. You know our culture is designed to run full.”
Concluding, Schneider found the through line, whether with a guitar at a club or on the floor of a mill: “You know, you function better with teams of people, whether it’s a band or whether it’s a football team or whether it’s your caster team. They challenge you to be better,” he said.
Canada has announced a 25% tariff on Chinese steel and aluminum, along with a 100% tariff on Chinese-made EVs.
“Canadian workers and critical sectors, including steel and aluminum … are facing an intentional, state-directed policy of overcapacity, undermining the Canada’s ability to compete in domestic and global markets,” Chrystia Freeland, deputy prime minister and minister of finance, said in a statement on Monday.
She noted this was why the government was moving forward to “level the playing field, protect Canadian workers, and match measures taken by key trading partners.”
As previously reported, Canada’s steel and aluminum industries had called for tariff alignment with the US.
Canada’s federal government intends to apply 25% tariffs on imports of steel and aluminum products from China, effective Oct, 15, 2024, according to the statement.
An initial list of goods was released Monday for public comment, and can be found here. The final list of goods subject to the surtaxes will be announced by Oct. 1.
The 100% tariff on all Chinese-made EVs will be effective Oct. 1. This includes electric and certain hybrid passenger automobiles, trucks, buses, and delivery vans.
The Canadian Steel Producers Association (CSPA) cheered the move by the government.
“Our industries strongly support and welcome today’s announcement by the Government of Canada that recognizes the strategic importance of steel and aluminum to Canada’s economic security interests,” Catherine Cobden, president and CEO of the CSPA, said on Monday.
She made the remarks in a joint statement with Jean Simard, president and CEO of the Aluminum Association of Canada.
“Moving towards the implementation of these measures, our sectors will continue to work closely with the government and all political parties to ensure the details of these measures protect Canada’s trade and economic interests,” the statement continued.
Editor’s note: This is an update of a previous article.
Mexican service center Aceromex has installed a new cut-to-length line in its facility in Cienega de Flores, just north of Monterrey, Nuevo Leon. The line is scheduled to start up in Q4.
Austria-based plant, equipment, and technology supplier Andritz supplied the new line. With precision leveling and trimming capabilities, the line can process steel sheet and coils up to 2,440 millimeters (mm) in width, with strip thicknesses from 2 mm to 25.4 mm. The company told SMU it will process around 300,000 metric tons (mt) of steel annually.
A 100% Mexican company, Aceromex operates its service center in Cienega de Flores and has 19 distribution centers throughout Mexico. It stocks steel plate; hot-rolled, cold-rolled and coated sheet; and various long, pipe and tube, and wire drawing products,.
The company sources its products mainly from Mexico, but also from other countries around the world. It handles over 500,000 mt of steel each year.
Domestic steel mill production increased last week to one of the highest rates recorded in over a year, according to the latest data from the American Iron and Steel Institute (AISI). Having risen for three weeks in a row, weekly production was at its highest since February 2023.
For the week ending Aug. 24, AISI estimated total raw steel mill output to have been 1,782,000 short tons (st). In the the largest weekly gain in the past six weeks, production increased by 28,000 st, or 1.6%, from the week prior.
Raw production last week was 3.6% higher than the year-to-date weekly average of 1,720,000 st, and 2.3% higher than a year ago when mill output totaled 1,742,000 st.
US mills operated at 80.2% of capabilities last week, AISI said. This rate was higher than in the week prior (79.0%) and at this time last year (76.6%).
Year-to-date production is up to 57,692,000 st with a capability utilization rate of 76.7%. This is 1.9% less than the same time frame last year, when mills operated at 77.2% of capabilities, producing 58,818,000 st.
Weekly production by region is shown below, with the weekly changes noted in parentheses:
Editor’s note: The raw steel production tonnage provided in this report is estimated and should be used primarily to assess production trends. AISI’s monthly “AIS 7” report is available by subscription and can provide a more detailed summary of domestic steel production.
Nucor’s weekly consumer spot price (CSP) for hot-rolled (HR) coil increased $15 per short ton (st) from last week to $710/st.
The HR coil base price for Nucor subsidiary CSI also increased $15 from last week, with the Charlotte, N.C.-based steelmaker aiming to collect $775/st for HR coil in the West Coast market.
Lead times of 3-5 weeks will continue to be offered, but Nucor noted for customers to contact their district sales manager for availability.
SMU’s Aug. 20 check of the market showed HR coil spot prices ranging from $650-700/st, with an average of $675/st. That marked the fourth consecutive week of rising HR prices.
The big show is just about here. The SMU Steel Summit will be getting underway on Monday.
Where does the networking begin? I’d say at the airport. So don’t forget your boarding pass or your business cards.
The SMU staff will be easy enough to spot. We’ll be wearing a different SMU shirt each day of the conference – light blue on Monday, white on Tuesday, and Navy blue on Wednesday.
We’ll also, in a nod to last year’s conference opener, have a few Magic 8 Balls to mark where we’ll be sitting in the main conference room. So stop by and say hello.
My colleague David Schollaert and I won’t be hard to find. We’ll be up on the stage for much of the time. We’ll be joined there by some of our CRU colleagues – Josh Spoores, Alex Anderson, and Lynn Lupori.
Also, stop by our booth if you’d like to learn more about or have any feedback on the SMU newsletter and website. And, of course, bring along anyone who you think might benefit from a website demo or a subscription.
SMU account manager Luis Corona will be there to help you with any questions. He’ll be joined by SMU senior analyst Brett Linton, who many of you know, and who knows SMU and the website like the back of his hand.
Our booth will be right by the main entrance alongside our colleagues at Recycled Metals Update (RMU). Make a point of asking about RMU, too – it could be a good resource for those looking for more detailed scrap coverage of scrap.
Nearly 1,500 of you will be in attendance when the conference officially kicks off at 1 p.m. If you’re getting in earlier on Monday, I encourage you to attend some of the pre-conference workshops that morning. There is some good stuff on everything from futures and future technologies to a discussion on scrap that RMU will lead.
We’ll officially start the conference off with our opening video. Dave and I will also be doing a few live polls. (Maybe a dad joke or two as well.) So make sure to download the Steel Summit app from either the Apple or Android stores. That will allow you to participate in the polls and the Q&A sessions following most speakers and panels.
You’ll notice a few big themes in the event this year. For starters, we’re going to be talking a lot about trade issues and how trade policy might differ under a Harris administration or a second Trump administration.
It’s a little early for thank-yous and shout-outs. But I think a “thank you” is in order for Hu Wangming, chair of Baowu for the quote about “winter” coming for steel.
Baowu is the largest steelmaker in China and in the world. We can debate all day whether that winter applies specifically to China’s steel industry, given the construction crisis there, or whether a winter for Chinese steel will also bring a chill to the US. One thing is certain: A “Game of Thrones” theme makes the debate more fun.
And, again, Summit remains an interactive event. You’ll be able to ask questions after every speaker and panel. So, for our trade panel, make sure to pack your questions not only about China but also about USMCA, Section 232, Section 301, NMEs, and even good, old-fashioned AD/CVDs.
Another big theme will be electrification and decarbonization. I know that excites some of you. I know eyes are already rolling among others. Here’s the thing. We won’t be doing death by PowerPoint when it comes to decarb. We’re going to try to keep it focused on what companies are doing today – not what they might do in 2025 – to reduce their carbon footprint.
Steel Dynamics Inc. (SDI) President and COO Barry Schneider will do just that when we catch up for an exclusive interview on the first day of Steel Summit. That conversation will continue on the policy front on Day 2 when we’ve got a great panel of DC insiders who will spell out how trade and climate policy might be linked in the future. And then on Day 3, we’ll have another great panel on some of the technologies that are being used now, or that soon will be, to help reduce CO2 in the atmosphere.
You’ll also notice that we’ve got more of a focus on end markets this year – notably appliance and automotive, both important markets for flat-rolled steel. When it comes to automotive, we’re going to talk less about what sales and production figures might be for the balance of the year. Instead, we’ll examine how supply chains might change if EV adoption continues to increase.
Because, let’s face it, designs for internal combustion engine (ICE) vehicles and EVs are massively different. We arguably haven’t seen a design shift this radical since we went from horse and buggy to Model T. What does that mean for steel and competing materials?
We’re also keeping some of the features of the event you’ve appreciated in the past. We’ll have forecasts from leading industry analysts. We’ll hear from leading executives from steel mills, service centers, and scrap companies about the latest trends and developments in the markets they serve. And we’ll have entertaining keynotes on politics and economics.
By the way, we know some of you feel like winter is coming if your candidate doesn’t win in November. But I think all sides are tired of partisan bickering. So, while politics will be unavoidable at the event this year from time to time, let’s keep it respectful. We’re here to network, have fun – and maybe learn a thing or two about the industry we love. Fortunately, it’s one that, along with apple pie, remains popular on both sides of the aisle.
The utility industry has sounded the alarm over potential increases in Section 301 tariffs affecting solar photovoltaic cells, batteries, and transformers.
The Office of the US Trade Representative (USTR) and the White House have unveiled proposals to increase the current 7.5% tariffs to 25% after the end of this month. An announcement is pending.
Players in the utility industry face a number of challenges to maintain electric generation and distribution. Demand for electricity has surged and is very likely to increase dramatically from here because of the increasing demand for electric vehicles and the proliferation of data centers, which gobble up huge amounts of electricity.
The power grid is becoming more obsolete, and retrofitting existing power lines with more efficient wiring and transformers (and the steel towers that hold them) will demand more materials.
China is an important source of vital materials for these efforts. The Biden administration seems to propose tariff increases to “punish” Chinese manufacturers by reducing demand for their products.
That does not work, because the tariffs are ultimately paid by US consumers, not Chinese producers. The skyrocketing demand for such materials as rare earth metals and electrical steel assures that Chinese producers will not pay the tariffs. But price increases will be passed along to customers.
The administration also hopes that the increased tariffs will cause companies to turn to non-Chinese suppliers or build facilities in the US. This is a “chicken and egg” problem. There are serious obstacles, for example, to new mining of lithium and rare earth metals in the US. Environmentalists oppose new mining as a matter of principle, and the administration needs their votes in November.
On balance, increasing tariffs to encourage domestic manufacturing doesn’t really work in a 21st-century economy. A better way is to encourage production through incentives to – wait for it – increase production. The administration has picked a couple of industries to do this. The CHIPs Act to subsidize production of semiconductors in the US is perhaps the clearest example.
Here is an idea: Maybe our leaders should focus more energy (pun intended) on supporting new production of electrical steel so that it becomes economic to make more transformers and electric motors in the US.
Editor’s note: This is an opinion column. The views in this article are those of an experienced trade attorney on issues of relevance to the current steel market. They do not necessarily reflect those of SMU. We welcome you to share your thoughts as well at info@steelmarketupdate.com.
The chair of China’s Baowu Steel Group recently predicted a “harsh winter” for the Chinese industry as it faces a structural economic slowdown and a property market crisis. As steel industries elsewhere know all too well, China’s “harsh winters” have an unfortunate tendency to blow back on them.
The winds have been picking up for more than a year already. According to the US Commerce Department, China’s 2023 steel exports increased by 39% compared to 2022 volumes. In 2024, exports are on pace to exceed 100 million tons. This is causing flashbacks to the mid-2010s, when Chinese steel exports hit a record of 110 million metric tons and threw the global industry into crisis.
Harsh steel industry winters originating in China are no longer a question of “if,” but of “when.” Their periodic emergence is not the unexpected result of sudden market downturns. It is the inevitable consequence of decades of failed industrial policy and generous government financial support driving overcapacity that China’s planners are unwilling or unable to confront.
China’s official statements of concern regarding “blind investment” and overcapacity in the steel industry go back to at least 2003. Repeated attempts since then to address overcapacity have harbored illusions that the solution lies with government-directed consolidation and government-funded facility upgrades. In practice, these policies are counterproductive vectors for ongoing subsidization that sustains and even expands all but the most decrepit, non-operational facilities through financial bailouts and other government support.
Wiley has closely tracked these policies and the market distortions they have created. In a series of previous reports dating back more than 15 years, we have documented the ways in which China’s pursuit of subsidized self-sufficiency and market dominance in steel and other sectors has affected US producers.
Our most recent analysis, Shell Game: Case Studies in Chinese Steel Subsidies, will be issued in the coming days. It examines a selection of oil country tubular goods (OCTG) producers and confirms that the same pattern continues today. If anything, the Chinese government has only expanded the scope of intervention and subsidization.
First, it continues to rely on state-directed mergers and acquisitions in pursuit of industry consolidation and capacity reductions. Far from reducing capacity, these transactions often operate as massive financial bailout schemes that sustain uncompetitive capacity and create mammoth conglomerates that are insulated from domestic competition so that they can more effectively target global markets.
Second, policies with stated environmental objectives continue to operate as counterproductive vectors for additional subsidization that do little but move capacity from one place to another. In the process, these state-supported relocations expand capacity and facilitate export orientation by concentrating it logistically optimized regions like coastal ports.
Third, industrial policy support that has historically favored large state-owned enterprises has been expanded to cover even the smaller, non-state firms that were in theory to spur more market-oriented competition and outcomes in the industry. These policies call on the state to dramatically increase the scope of grants, subsidized financing, and other support throughout the steel industry.
We examined these policies through recent examples from the OCTG sector, but this is just a snapshot of what is happening throughout the steel industry. As long as this continues, China’s overcapacity is here to stay. This will remain the case unless and until policymakers elsewhere accept the hard truth that China’s ability to access demand in their markets only enables the policies that are the root cause of the problem. As long as foreign markets, whether for direct steel imports or imports of major steel-consuming downstream goods, can be flooded by subsidized Chinese steel, harsh winters in China will become an ice age for the rest of the global industry.
It may be difficult and complicated in the short term, but concerted action among like-minded partners to deny the Chinese steel industry any outlets may be the only way to end this pattern. Steel producers around the world are ringing alarm bells, from North America to South America, from Europe to Southeast Asia. Given globalized markets and interconnected supply chains, countries acting individually to respond to immediate crises on an ad hoc basis remains necessary, including by updating and strengthening trade remedies laws, but more will be needed.
China’s steel industry also remains overwhelmingly composed of high-emission blast furnaces and still relies largely on coal-fired electricity. Nearly every ton of steel exported from China into markets with lower-emission industries displaces a ton of steel made by less carbon-intensive processes. Downsizing the Chinese steel industry is therefore also perhaps the most effective and efficient way to dramatically reduce global steel industry CO2 emissions.
For the sake of both the global economy and the global climate, China will need to shut down around 30% of its steel industry, at least according to some of its own companies’ estimates. But as long China’s policymakers have outlets to force those painful decisions onto other countries, we can expect that they will continue to do so, just like they have in the past.
Editor’s note: Steel Market Update is pleased to share this Premium content with Executive members. For information on how to upgrade to a Premium-level subscription, contact Luis Corona luis.corona@crugroup.com.
Steelmaking raw material prices have moved in differing directions across August, a change of pace from the declines seen in June and July, according to SMU’s latest analysis.
As of Aug. 21, prices for busheling steel scrap, zinc, and aluminum have risen 5-8% month on month (m/m). Pig iron and shredded scrap prices have remained stable. Iron ore and coking coal were the only products to experience significant monthly decreases, dropping 9-10%.
Prices for all but one raw material (pig iron) are cheaper than they were three months ago, with some products down by 14% or more in that time. Table 1 summarizes the percentage changes from one month, three months, and one year ago for each product.
Following an uptick in April and May, the import price of 62% Fe Chinese iron ore fines has moved lower over the past three months. The latest weekly spot price has fallen to $94 per dry metric ton (dmt) delivered North China (Figure 1). This is now the lowest weekly price recorded since November 2022. Iron ore prices have decreased 9% over the past month and are 14% lower than levels seen this time last year.
Prices for premium hard coking coal had remained relatively stable between May and July but have eased over the past month. The latest weekly price is down to a two-year low of $205/dmt, having fallen 10% in the last month (Figure 2). Coking coal prices have decreased 14% in the past three months and are 20% less than they were one year prior.
Since stabilizing about a year ago, pig iron prices have overall trended higher since November. Prices were flat from July to August at $460/dmt (Figure 3). Pig iron prices are in line with levels seen three months prior and 8% higher than levels one year ago. Recall that pig iron prices had jumped more than 60% in April 2022 following the invasion of Ukraine by Russian forces, reaching a historic high of $975/dmt.
Note that most of the pig iron imported to the US had come from Russia, Ukraine, and Brazil. This report uses Brazilian prices, averaging north and south port prices.
Steel scrap prices have generally shifted lower across 2024 following their peak last December. SMU’s busheling and shredded scrap indices picked up steam from July to August; busheling scrap prices rose 5% m/m to $395 per gross ton (gt), shredded scrap ticked up 1% to $383/gt (Figure 4). Scrap tags are down 2-4% from prices recorded three months ago and are 2-12% lower than this time last year.
Changes in the relationship between scrap and iron ore prices offer insights into the competitiveness of integrated mills, whose primary feedstock is iron ore, compared to mini-mills, whose primary feedstock is scrap. Figure 5 shows the prices of mill raw materials over the past three years.
To compare these two feedstock materials, SMU divides the shredded scrap price by the iron ore price to calculate a ratio. A high ratio favors the integrated producers and a lower ratio favors the mini-mill/EAF producers (Figure 6). Integrated producers had mostly held the cost advantage between late 2021 through mid-2023. The advantage then briefly shifted to EAF producers in the second half of 2023. After bouncing around this year through July, the ratio began to favor integrated producers as we entered August, now up to 4.08.
Zinc is used in galvanized and other coated steel products. Following the multi-year lows seen last year, spot prices rapidly increased earlier this year, reaching a one-year high of $1.40/lb in May. (This surge prompted some mills to increase their galvanized coating extras.) Those gains were short lived, being erased by the end of July. The latest LME cash price for zinc has recovered by 5% m/m to $1.27 per pound. Zinc prices are 7% lower than levels three months prior, but up 23% compared to August 2023 (Figure 7).
Aluminum prices, which factor into the price of Galvalume, also rose earlier this year. Prices climbed to a one-year high of $1.22/lb in May, but receded through July. The latest LME cash price has risen 8% m/m to $1.11/lb. Aluminum prices are 6% lower than tags three months prior, but 17% greater than levels seen this time last year. Note that aluminum spot prices sometimes have large swings and return to typical levels within a few days, as seen in Figure 7.
Zekelman Industries has bought roughly 5% of the available shares of Canada’s Algoma Steel.
The Chicago-based pipe and tube maker bought a 5.02% stake in the Canadian flat-rolled steelmaker for approximately $42.1 million excluding brokerage commissions, according to a US Securities and Exchange Commission Form 13D filing.
Zekelman purchased 5,229,988 common shares, the filing from July 31 said.
Recall that Barry Zekelman, executive chairman and CEO, told SMU in a Community Chat leading up to Steel Summit 2023: “If I go to my grave without owning a steel mill, I won’t be happy. It’s been a lifelong dream of mine.”
Requests for comment from Zekelman Industries and Algoma was not returned by time of publication on Friday afternoon.
The number of US drill rigs in operation ticked lower last week while Canadian activity increased, according to the latest data released from Baker Hughes. US rig counts have gone up and down since June, hovering near multi-year lows. Canadian activity has trended upwards since a mid-May seasonal low, rising to a five-month high last week.
Through Aug. 23, there are 585 US drilling rigs in operation, one less than the week prior. Oil rigs held steady at 483, gas rigs fell by one to 97, and miscellaneous rigs were unchanged at five.
There were 47 fewer active US rigs last week compared to the same week last year, with 29 less oil rigs and 18 less gas rigs.
Last week, there were 219 active Canadian rigs, two higher than the week before. Oil rigs rose by two to 153 and gas rigs remained at 66.
There are currently 29 more drilling rigs operating in Canada than one year prior, with 37 more oil rigs and 8 less gas rigs.
The international rig count is updated monthly. The total number of active rigs for the month of July fell to 934, 23 less than the June count and down by 27 from levels one year prior.
The Baker Hughes rig count is important to the steel industry because it is a leading indicator of demand for oil country tubular goods (OCTG), a key end market for steel sheet. A rotary rig rotates the drill pipe from the surface to either drill a new well or sidetrack an existing one. For a history of the US and Canadian rig counts, visit the rig count page on our website.
The price gap between US cold-rolled (CR) coil and imported CR has widened since falling to a 10-month low in late July.
Domestic CR coil tags remain above offshore prices on a landed basis. Stateside prices have begun rising after falling to their lowest levels since last October. This is while offshore tags have been easing.
US CR coil prices averaged $915 per short ton (st) in our check of the market on Tuesday, Aug. 20, flat vs. the week before. Despite the recent improvement of late, CR tags are still down roughly $390/st from a year-to-date high of $1,325/st in January.
Domestic CR prices are, theoretically, 18.2% more expensive than imports. That’s up from 15.3% last week. While US CRC prices are still higher than offshore material, the US CR premium is down from a 31.5% premium in early January.
In dollar-per-ton terms, US CR is now, on average, $125/st more expensive than offshore product (see Figure 1). That compares to $107/st costlier on average last week. That’s still down from a recent peak of $311/st in mid-January.
The charts below compare CR coil prices in the US, Germany, Italy, South Korea, and Japan. The left-hand side highlights prices over the last two years. The right-hand side zooms in to show more recent trends.
This is how SMU calculates the theoretical spread between domestic CR prices (FOB domestic mills) and foreign CR prices (delivered to US ports): We compare SMU’s US CR weekly index to the CRU CR weekly indices for Germany, Italy, and East Asia (Japan and South Korea). This is only a theoretical calculation. Import costs can vary greatly, influencing the true market spread.
We add $90/st to all foreign prices as a rough means of accounting for freight costs, handling, and trader margin. This gives us an approximate CIF US ports price to compare to the SMU domestic CR price. Buyers should use our $90/st figure as a benchmark and adjust up or down based on their own shipping and handling costs. (Editor’s note: If you import steel and want to share your thoughts on these costs, please get in touch with the author at david@steelmarketupdate.com.)
As of Thursday, Aug. 22, the CRU Asian CR price was $508/st, down $27/st week over week (w/w) and down nearly $75/st over the past month. Adding a 71% anti-dumping duty (Japan, theoretical) and $90/st in estimated import costs, the delivered price to the US is $959/st. The theoretical price of South Korean CR exports to the US is $598/st.
The latest SMU CR average of $915/st theoretically puts US-produced CR $44/st below CR product imported from Japan. But US tags are still $317/st more expensive than CR imported from South Korea.
Italian CR prices were up $2/st to roughly $706/st this week. After adding import costs, the price of Italian CR delivered to the US is, in theory, $796/st.
That means domestic CR is theoretically $119/st more expensive than CR coil imported from Italy. The spread is down $2/st from last week but still $334/st below a recent high of $453/st mid-December.
CRU’s German CR price was down just $2/st vs. last week. After adding import costs, the delivered price of German CR is, in theory, $808/st.
The result: Domestic CR is also theoretically $107/st more expensive than CR imported from Germany. The spread is up $2/st w/w but still well below a recent high of $431/st in the first week of 2024.
Notes: We reference domestic prices as FOB the producing mill, while foreign prices are CIF the port (Houston, NOLA, Savannah, Los Angeles, Camden, etc.). Inland freight from either a domestic mill or a port is important to keep in mind when deciding where to source from. It’s also important to factor in lead times. In most market cycles, domestic steel will deliver more quickly than foreign steel. Note also that, effective Jan. 1, 2022, the blanket 25% Section 232 tariff was removed from most imports from the European Union. It was replaced by a tariff rate quota (TRQ). Therefore, the German and Italian price comparisons in this analysis no longer include a 25% tariff. A similar TRQ with Japan went into effect on April 1, 2022. South Korea is subject to a hard quota rather than a tariff.
Canada’s government has ordered an end to the brief rail stoppage which threatened to disrupt the movement of commodities.
Trains operated by Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) are expected to start running again within days, Reuters quoted Canada’s Labor Minister Steven MacKinnon as saying.
The two rail companies had locked out more than 9,000 workers who are part of the Teamsters union after they were unsuccessful in reaching an agreement over issues related to scheduling, labor availability, and work-life balance.
The Canadian government on Aug. 22 said it would ask the Canada Industrial Relations Board (CIRB) to issue a back-to-work order.
CN said the same day it had ended its lockout and initiated a recovery plan.
CPKC said that the resumption of its services would be delayed pending the result of the CIRB back-to-work order. The board is independent and must first consult workers represented by the Teamsters union, which is planning to challenge the constitutionality of the Canadian government’s order.
The CIRB was set to meet with the union and CPKC officials later on Friday.
Below is a roundup of some of this week’s news from the aluminum industry from SMU’s parent company CRU.
Miners Rio Tinto and Teck Resources are taking a series of measures to mitigate the impact of Canada’s two largest railway companies shutting down their networks during a labor dispute.
Rio Tinto said it will truck some materials and products, and increase the use of its own rail network, primarily 400 km serving its iron ore operations in Quebec, as well as Newfoundland and Labrador, and around 100 km for its aluminum business. The labor dispute between Canada’s two largest railway companies and their workers is expected to disrupt operations, prompting miners to implement measures to minimize the impact.
Teck stated it is looking to use alternative transportation, with a spokesperson for the Vancouver-based base metal miner adding that interruption of rail services is negative for its partners and customers in the critical minerals supply chain.
Normal rail services in the vast country were suspended on Aug. 22 after operators Canadian National Railway and Canadian Pacific Kansas City locked out more than 9,000 unionized workers. The Mining Association of Canada said it is seriously concerned about the damage the development may cause.
“As the single largest industrial customer group of Canada’s railways, the mining sector has seen first-hand how detrimental unpredictable work stoppages are to Canada’s reputation as a reliable trading partner,” said association president and CEO Pierre Gratton, before adding: “The urgent need for Canadian minerals and metals presents a generational opportunity, and we are in a race with our competitors to meet global demand. A first-ever, simultaneous halt in … rail service could not come at a worse time.”
The association said rail freight volume in 2022 was 283.6 million metric tons (mt), 132 million mt of which was crude minerals and 28.3 million mt processed mineral products, together accounting for 56% of the total.
EGA announced its intention to acquire a majority stake in American aluminum recycling firm Spectro Alloys Corp. The acquisition, which is subject to obtaining regulatory approvals, will accelerate EGA’s global expansion into aluminum recycling and expand EGA’s business in the US.
Spectro Alloys is a leading secondary foundry alloy producer in the US, founded in 1973, and based in Rosemount, Minn. The company has a production capacity of around 110,000 mt/y of aluminum ingots, with a carbon intensity of less than 1 mt of CO2 equivalent per mt of aluminum produced. Earlier this year, Spectro Alloys broke ground on an expansion project at its Rosemount site that will add approximately 55,000 mt/y of secondary billet production capacity in the first phase, which is expected to be completed in 2025.
EGA intends to acquire 80% of Spectro Alloys. The current owner-managers will retain a 20% interest. EGA and Spectro Alloys have signed an equity purchase agreement, and the transaction is expected to close during the third quarter of 2024.
India’s Hindalco Industries is set to undertake a significant expansion with investments totaling $10 billion, said Chairman Kumar Mangalam Birla at the company’s annual general meeting on Aug. 22. Birla outlined plans for ongoing and near-term projects, including expansions in aluminum and copper smelters, the Aditya flat-rolled product plant, a new alumina refinery in Rayagada, and Novelis Bay Minnette, Ala., expansion.
Hindalco is considering a brownfield expansion of approximately 200,000 mt/y at its aluminum smelter in Odisha, with a significant portion of the power requirements to be met through renewable energy sources, Birla said in his speech. In addition to its aluminum initiatives, the company is planning to expand its copper smelting capacity and is exploring the establishment of a brownfield facility in Gujarat to address the rising demand for this metal in India.
Finally, Birla stressed the strategic investment in its subsidiary Novelis and its rolling and recycling project in Bay Minette, Ala., which is well set to become one of the most advanced and automated plants in the industry.
Atlanta-based Novelis announced this week the successful completion of its Green Bond financial commitments. In the third Green Bond report, the flat-rolled aluminum producer shares how these investments are driving innovation and helping the company achieve its goals for reducing carbon emissions, energy use, water use, and landfill waste.
In the report, Novelis asserts that an amount equal to the total net proceeds of $588 million from the March 31, 2021, issuance of the €500 million, 3.375% Senior Notes due April 15, 2029, have been used to finance new or existing Renewable Energy and Pollution Prevention & Control projects in the 36 months prior to the issuance through Sept. 30, 2023.
“Although we’ve met the spend commitment of our Green Bond, our commitment to sustainability is never ending,” said Steve Fisher, president and CEO of Novelis. “We are aiming for a carbon-neutral future for aluminum – built on a global, circular economy – and every day we innovate and collaborate with our customers to move us closer to that future.”
To learn more about CRU’s services, visit www.crugroup.com.