Labor, US steel mills gird for contract negotiations
Steel union members and US integrated steelmakers are getting ready to negotiate contracts in the midst of surging inflation and falling steel prices.
The United Steelworks union (USW) and steelmakers Cleveland-Cliffs and US Steel are getting ready for contract negotiations this summer as multiple contracts expire just as American workers are seeing their purchasing power deteriorate at historic rates and as steel mills brace for lower prices as the US economy faces mounting headwinds.
Inflation was up by 8.6pc in May, the highest in four decades and a third consecutive month at or over 8pc.
The last time the steel mill contracts were negotiated in 2018 the USW voted to authorize strikes at the then-ArcelorMittal USA steel mills and US Steel plants.
The Argus US hot rolled coil (HRC) assessment has fallen by 26pc to $1,118/short ton (st) on 14 June since hitting a peak of $1,500/st in April.
The USW steel mill contracts with integrated steelmakers Cleveland-Cliffs and US Steel expire on 1 September.
At Cleveland-Cliffs, the USW said approximately 12,000 members are covered by the contracts that apply to the former ArcelorMittal USA assets that Cleveland-Cliffs acquired in December 2020.
Based on the contract agreed to in 2018, the sites covered include all of Cleveland-Cliffs' integrated steel mills in Burns Harbor and Indiana Harbor, Indiana, and Cleveland, Ohio. It also covers the EAF operations in Coatesville and Steelton, Pennsylvania, the galvanizing plant in Columbus, Ohio, the cold rolling Tek and Kote plants in New Carlisle, Indiana, the Conshohocken quench and temper plant near Philadelphia, and the tinplate plant in Weirton, West Virginia.
The USW said mining contracts for the company's mines in Minnesota cover about 1,850 union members. Those contracts end on 1 October.
At US Steel, the negotiations cover approximately 11,500 USW members at 10 sites, including all of its integrated steelmaking operations and its Minntac and its iron ore mines in Minnesota, according to the company.
A US Steel spokeswoman said the company looks forward to productive conversations and expects to make an agreement with the union.
In an investor presentation published 1 June, Cleveland-Cliffs highlighted the multiple labor contracts it signed in 2021, including new three-year contracts with the United Auto Workers (UAW) union at its Rockport, Indiana finishing mill and Dearborn, Michigan steel mill, and a four-and-a-half year contract with the UAW union at the company's Mansfield, Ohio stainless steel mill. The International Association of Machinists and Aerospace Workers (IAM) union at Cleveland-Cliffs' Middletown, Ohio, mill also ratified a new contract in 2021.
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PCI price relativity to PLV climbs to a high
PCI price relativity to PLV climbs to a high
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Japan’s Mitsui lifts aluminium ingot offtake in Brazil
Japan’s Mitsui lifts aluminium ingot offtake in Brazil
Tokyo, 9 August (Argus) — Japanese trading house Mitsui has raised its stake in Nippon Amazon Aluminium (NAAC) to increase its offtake of low-carbon aluminum ingots produced in Brazil, as it aims to enhance its decarbonisation and metal businesses. Mitsui increased its shareholding in NAAC, which has a stake in Brazilian aluminum refiner Aluminio Brasileiro (Albras), to 46pc from the current 21pc for an undisclosed sum. The increased stake will boost Mitsui's offtake of Albras' aluminum ingots to 140,000 t/yr from the current 80,000 t/yr. It plans to sell the increased offtake mainly to Japanese consumers. The firm has delivered Albras' low-carbon aluminum ingots mainly to Japanese users. NAAC has a 49pc stake in Albras, which manufactures 450,000 t/yr of aluminum ingots. It cuts carbon dioxide emissions during the production process by using renewable power. Mitsui expects increased demand for light, recyclable aluminum produced with renewable energy with an accelerating decarbonisation trend and aluminum requirements for various goods like vehicles, aircraft, construction materials, cans and electric wire. It also predicts a continued tightness in supplies of low-carbon aluminum. Mitsui also invested in India-based scrap metals trader and manufacturer MTC Group to take advantage of rising metal demand in India. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Mexican ag, LPG prices drive July inflation
Mexican ag, LPG prices drive July inflation
Houston, 8 August (Argus) — Gains in agriculture and LPG gas price helped drive Mexico's headline inflation in July to its highest level since May 2023, although core price gains continued to ease. The consumer price index (CPI) rose to an annual 5.57pc in July, up from 4.98pc in June and increasing for a fifth consecutive month, Mexico's statistics agency Inegi said today. A big driver behind the July reading are fruit and vegetable prices, which climbed by 24pc in July, compared with 18pc in June. Farm goods, and tomatoes in particular, have been hit by a double dip of bad weather with two months of extreme drought before flooding rains began to hit in late June at an active start to this year's hurricane season. Also hitting the consumer price index (CPI), energy inflation reached 9.2pc in July from the same month in 2023. The group was led by higher LPG prices, up 26pc over last year. Low-octane gasoline prices were next highest, up 6.9pc. Electricity prices followed, rising 5.35pc on an annual basis. Domestic natural gas was the only energy item to decline, dropping 3.4pc in July. Banorte, however, stressed that core inflation – which excludes volatile food and energy – did ease again in July, slowing to 4.05pc for the month from 4.13pc in June, marking 18 consecutive months of easing. In a note, Banorte said energy prices stand to benefit from base calendar effects in the coming months. Mexican bank Citibanamex noted the lower core as well in a note, adding how the recent rains are beginning to reach the most drought stricken areas, and this should help begin to contain non-core prices. "We expect annual headline inflation to resume a gradual downward trend starting in August, and we maintain our estimates for the end of 2024 at 4.4pc for headline inflation and 4.1pc for core inflation," the bank said. The CPI increased by 1.05pc in June from the prior month, when it posted a 0.38pc monthly gain, said Inegi. The central bank's monetary policy committee today lowered its reference interest rate to 10.75pc from 11pc, its first reduction since March. The central bank cited the continued drop in core prices, adding the inflationary environment might allow for further rate adjustments, considering "global shocks will continue fading and the effects of weakness in economic activity." By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia lithium companies positive despite low prices
Australia lithium companies positive despite low prices
London, 7 August (Argus) — Australian lithium mining firms remain positive that an upswing in prices towards the middle of the decade will support their operations going forward, even though lithium prices are at a five-year low. Lithium prices are bottoming out and should increase later in the decade, according to a number of speakers at the Diggers and Dealers mining forum in Kalgoorlie, Western Australia. "It's still a very bright blue sky, but there is a bit of cloud cover passing through. It's no surprise really, given that lows always follow periods of highs and the industry went through a strong period of highs," Australian mining firm Pilbara Minerals chief executive Dale Henderson said. Price volatility is common in new and rapidly growing industries, such as lithium. The lithium market is connected to the electric vehicle (EV) industry, which has grown from nothing in just a few years. The combination of government stimulus measures, technological developments and the different rates of consumer adoption are all coming together at the same time, Henderson said. "Businesses are rushing to capitalise on the opportunity… It has been volatile and it won't be a straight line and I don't expect it to be a straight line any time soon." Long-term demand picture unchanged Most mining companies remained resolute in their long-term goals, despite some industry cutbacks in the first half of this year, maintaining that long-term lithium demand will support their operations. Australian producer Core Lithium suspended operations at its Grants open pit mine in January. The company is looking for an opportunity to re-enter the market when prices rise, Core Lithium chief executive Paul Brown said. He cited multiple industry participants that have said a price of around $18/kg LCE is needed to support this. Argus assessed lithium carbonate prices at $9.70-10.20/kg cif China on 6 August, their lowest since 2021. "We can't, in an industry as immature as it is, constantly move our strategy from one thing to another," Australian lithium firm Liontown Resources chief executive Tony Ottaviano said. "When you see a 60pc price reduction in six months, there is only one response a company can do and it is blunt. We need to hold our heads while others are losing theirs and push through and look at the long term. Having very credible customers that are also strategic in their outlook is critical to getting that done." The EV market is maturing and despite slowing demand growth in the US and Europe, EV uptake is expected to continue as new models become competitive with internal combustion engine (ICE) vehicles, Ottaviano said. In China, EV prices are already competitive with those of ICE vehicles, he said. "We don't see that yet in North America and Europe, but that will come." To meet the expected rise in lithium demand from EV manufacturing, new investment is needed into lithium, which is being discouraged by current low prices, speakers at the conference said. "The question on supply is, can the industry turn up with 80 new projects by 2035 that aren't financed yet, by the next decade? Each of those on average is 20,000t LCE. The investment required for that at the moment is not going to be easy to come by," IGO chief executive Ivan Vella said. IGO owns 49pc of the world's largest lithium mine, Greenbushes, in Western Australia. Argus estimates global lithium demand will rise to 3.2mn t LCE by 2034 ( see grap h ) By Thomas Kavanagh Global lithium demand Global lithium reserves Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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