Grupo Mexico’s 3Q boosted by Cu output, sales

: Metals
24/10/23

Conglomerate Grupo Mexico boosted its earnings in the third quarter, led by increased copper output and strong sales prices.

The company produced 280,900 metric tonnes (t) of copper in the third quarter, up by 10.6pc from the year earlier period. Copper sales in the quarter increased by 8.2pc to 275,070t.

The average copper price of $4.23/lb in the third quarter was 12.2pc higher than the prior-year period, according to Comex figures cited Tuesday by Grupo Mexico.

The group's mining division sales, represented by subsidiary Americas Mining, rose by 17.8pc to $3.2bn in the third quarter from a year prior, the group said. Profit surged by 55pc to $864mn, while cost of sales rose by 5.4pc to $1.4bn.

Total profits for Grupo Mexico, which has operations in mining, rail and infrastructure, rose by 44pc to $1bn in the third quarter on the year, with revenues increasing by 13.4pc to $4.13bn in the same period.

The increase in copper output reflects gains at the Peruvian mines of Toquepala, Buenavista, Cuajone and Mexico's Caridad mine, the company said.

"Grupo Mexico was able to benefit from a favorable copper price environment which, together with excellent production levels and strict cost control, translated into excellent financial results led by the mining division," the company said.

The company nearly doubled its zinc output to reach 31,080t in the third quarter, driven by the Buenavista Zinc concentrator. Zinc sales rose by 50pc to 37,355t.

Molybdenum production in the third quarter rose by 6pc to 7,270t from the prior-year period, while sales increased by 5.6pc to 7,326t.

Average zinc prices of $1.26/lb in the third quarter were up by 14.5pc from the same three-month span in 2023, based on London Metal Exchange numbers.

Grupo Mexico's Americas Mining subsidiary comprises main subsidiaries Southern Copper in México and Peru, and Asarco in the US.

Capital investments rose by 30pc in the quarter, totaling $536mn.

By Carolina Pulice

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24/10/24

Q&A: Aço Brasil to ask for steel tariff adjustment

Sao Paulo, 24 October (Argus) — Little has changed in the Brazilian steel market after nearly four months of a new tariff system intended to curb the increase of imported products. January-September imports rose by 24pc from the same period a year ago, totaling 4.6mn metric tonnes (t), surpassing what was expected for the full year. The tariffs, hailed by some market participants as missing the mark , was followed by other government measures, such as temporary antidumping measures and antidumping reviews. Industry group Aço Brasil's executive president Marco Polo de Mello Lopes spoke to Argus about the recent measures taken by the Brazilian government. This interview has been translated from Portuguese and edited for clarity. The government's June decision imposed a quota system for importers, along with a tariff increase. How does Aço Brasil see that decision's effects now? We are only four months into the tariff quota system. We have been following everything with a very large magnifying glass and we have some concerns. The tariff quota system has not brought the expected reduction [to import volumes], though it is too early to reach a conclusion. But it brought a change in the trend of what had been happening. At the beginning of the year there was an increase in products in general, but when you check June, July, August and September, you see that imports are decreasing every month. As we had a very high first half, we did not reach what was expected in terms of imports. So far, we see that we have not achieved the reduction objective, but we have achieved the objective of stopping the escalation in relation to these imports. What are Aço Brasil's main concerns with the June policy? It was identified that there was an increase in imports from Egypt and Peru. Egypt has a preferential agreement in relation to what would be a Mercosur-Egypt agreement. We are already evaluating to see what to do specifically regarding the fact that imports are increasing using the trade agreement umbrella. Another area of great concern is the excessive volume of imports that are entering through Manaus [the capital of northern Amazonas state]. It is strange that imports have increased without corresponding [demand] growth [at] the industrial park in Manaus. We continue monitoring to hold new meetings with the government. Brazil's executive management committee of the chamber of foreign trade (Gecex) last week ruled on the tariff increase for some steel products regardless of the import volume, unlike the first decision by the committee earlier this year. What is Aço Brasil's view on that decision? We understand that it is positive — it means there is recognition from the government that there are predatory imports that cause great concern in the sector. It couldn't have been any other way. So [we see it as a] very positive [measure]. The claim that had been made since the beginning was a 25pc [tariff hike]. It was always 25pc because it is what the world has been practicing. If the government approves it, it is within what was expected. What are the next steps for Aço Brasil to improve the situation for Brazilian steelmakers? We will certainly make requests to change the system. We are going to make some kind of movement, but it cannot be done now because there is already an [established] system. Imagine if companies that invested and spent energy and obtained a quota then had the government saying that they no longer have a quota, and could not challenge the decision in the courts. Any changes that may be made must be made following the renewal process of the current system, which would be in June 2025. By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Boeing workers reject labor deal, extend strike

24/10/24

Boeing workers reject labor deal, extend strike

Houston, 24 October (Argus) — Striking Boeing employees spurned a tentative labor deal struck between the aircraft maker and union leadership, continuing a costly work stoppage that has halted production of the company's flagship 737 MAX aircraft, along with its 767 and 777 widebody programs. Up to 64pc of factory workers backed by the International Association of Machinists and Aerospace Workers (IAMAW) on Wednesday voted to reject the company's offer, which promised a 35pc general wage increase spread over four years and increased company retirement account contributions. That pay raise, while an improvement over Boeing's first offer of 25pc, ultimately fell short of the 40pc increase sought by workers. Another sticking point centered around the return of employees' pension plans, which was not included in the latest proposal. Boeing had no comment on the vote's outcome. Ending the strike has been the priority of new Boeing chief executive Kelly Ortberg, who assumed the leadership position in August. The five-week work stoppage likely has cost the company $4.5bn based on the latest estimates from Anderson Economic Group and has forced Boeing to delay its goal of increasing 737 MAX build rates to 38/month by the end of the year. The company reported a third quarter loss of $6.2bn on revenues of $17.8bn. The strike's continuance also will exacerbate slowdowns within Boeing's supply chain, which "it turned off in many cases" because of the labor action. The company confirmed it had stopped shipments from certain suppliers, effectively shutting them down and forcing some to announce furloughs — including at its shipset supplier Spirit Aerosystems . Boeing is keeping other suppliers running "hot," either because the company felt some were behind on shipments or because risks were too great to shut them down. That latter group likely includes titanium melters, whom Boeing wants to keep operating at high levels to meet demand requirements for when the aerospace manufacturer increases ramp rates starting in 2025. Still, several market participants within the titanium value chain have expressed concerns to Argus that an extended strike could disrupt future scrap generation in the US, saying there remains enough inventoried material in the pipeline to cover near-term demand. It remains to be seen when negotiations between Boeing and union leadership will resume. The most recent round of talks were mediated by Julie Su, the acting secretary of the US Labor Department. By Alex Nicoll Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Outlook unclear at key steel coil event

24/10/24

Outlook unclear at key steel coil event

Hanover, 24 October (Argus) — Sentiment was mixed at a flat-steel focused event in Hannover, Germany, this week. Mills' offers coalesced around €600/t ex-works north Europe for hot-rolled coil, as they tried to reverse recent months' deepening losses. One lower-cost producer told Argus it had been losing €40-50/t on commodity-grade sales. Prices are unsustainably low and have to increase, executives said. Mills were working to underpin the market, as difficult talks with the automotive supply chain over 2025 accords continued. While automakers were pushing for large reductions, aiming to take their contract prices closer to spot, mill and service centre sources said the material that automakers take from domestic producers — especially when considering the service they receive — is far removed from the commodity grades that compete with imports. Automakers often postpone or cancel cargoes in a difficult market — one factor contributing to the limp demand currently confronting steelmakers. Some service centres noted that they do not have the same luxury. Mills pointed to retroactive duties on imports from Egypt, India, Japan and Vietnam as one supportive factor for prices. Definitive duties will probably be backdated to January, Argus understands. A general reduction in imports will also provide a more captive market for domestic mills, and there was widespread expectation that more measures will be implemented by the European Commission. With mills having secured their free carbon emissions allowances by continuing to produce through a period of weak demand, they will probably cut output early in 2025. One large mill will idle a blast furnace in France from April, but this is for maintenance. No other cuts were reported at the event, although German sources note that one German mill will close a hot-rolling line after refurbishing another. Demand remained the key headwind for producers and service centres alike. Service centres reported losing hot-rolled sheet business close to €620/t ex-works in Germany, and there was increasing speculation over the health of some automotive-facing businesses, especially those that have seen volumes dwindle quicker than the market average. Weak demand has enabled buyers with index-linked contracts to secure increased tonnages at more favourable rates for 2025 — either through higher discounts and rebates or lower freight rates. Some mill-owned distributors are at risk of closure, with some in Germany working just one shift a day, sources at the event said. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

IMF holds global GDP growth outlook steady

24/10/22

IMF holds global GDP growth outlook steady

Washington, 22 October (Argus) — Global economic growth will hold steady in 2024-25, but protectionist trends and supply chain risks are holding back growth prospects in the longer term, the IMF said today. The IMF's updated World Economic Outlook , released today, forecasts global growth of 3.2pc both in 2024 and 2025. IMF forecasts are used by many economists, including at the IEA, to model oil demand projections. But an "escalation in regional conflicts, especially in the Middle East, could pose serious risks for commodity markets," IMF director of research Pierre-Olivier Gourinchas said. While the IMF does not directly address the outcome of the US presidential election, former president Donald Trump has said he would impose tariffs of up to 20pc on US imports from all countries, and even higher for imports from China. "Shifts toward undesirable trade and industrial policies can significantly lower output relative to our baseline forecast," Gourinchas said. An IMF forecast scenario that involves a trade war between the US, Europe and China would reduce the US GDP annual growth forecast by 0.5 percentage points in 2025-30, with smaller effects in the eurozone and China. The effects of trade policy uncertainty on manufacturing would present an additional drag on growth in all countries involved. The baseline scenario in the IMF report forecasts US GDP growth at 2.8pc this year, an upward revision from the previous forecast issued in July. The IMF revised down its China GDP growth forecast slightly to 4.8pc this year. The IMF has warned for some time that the lackluster medium-term global economic growth and high levels of sovereign debt in major global economies would reduce public investment capacity, including in funding the energy transition. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Q&A: Italy's Beltrame eyes slab production

24/10/22

Q&A: Italy's Beltrame eyes slab production

London, 22 October (Argus) — Italian long steel producer Beltrame is diversifying its product range by installing a slab caster at its Vicenza mill with the aim of optimising the group's production. Argus spoke to the steelmaker's chief commercial officer Enrico Fornelli about technical details, reasons for the investment and green premiums. What are the expected dates for the start of testing and commercial production of slabs? When do you expect to complete the plant commissioning and start full production? We expect the test phase to commence towards the end of this year and it will probably last until the early months of 2025. We know that delays are always possible during the construction phase, but we are hoping that the first quarter of next year will mark the start of commercial production. The caster will have a capacity of 200,000-300,000 t/yr. Is the new slab caster a newbuild or is it a conversion of an existing billet caster, and will the slabs produced be sized for both coil and plate producers? We can define the machinery as "ex-novo", no conversion has been made, in fact the slab caster sits next to a billet caster in the facility. To answer your second question yes, the final goal of the project is to produce a wide range of dimensions suitable for both coil and plate producers. I understand that there are several reasons behind your decision to enter the slab market. What are they and are there any synergies with the longs market? There are two main reasons why we made this investment. First, we need to consider the optimisation of our steel plant. Optimising our production means making sure we achieve top performance levels, so that the mill works at full capacity and benefits from lower costs. Simply put, an asset that is operating at 70pc capacity will not have the same efficiencies as an asset that is at full capacity. Second of all, we have felt a strong necessity to embark on a road of diversification in regards to our product range. On the billet side, we do see an issue of overproduction, and the excess supply we are not able to sell locally forces us on the international markets, where Italian and European producers are not competitive. It is no secret that our energy costs are holding European producers back. The conflict in Ukraine and the reduction of imports from Russia have drastically changed the slab market, considering that Ukraine was also an important supplier for European and Italian steel mills. How did these events influence your decision to enter the market? First and foremost, I want to reiterate that optimisation is the leading reason that led us to make this investment decision. What I can say on our current situation is that Italy is a net importer of slab, as it currently buys 2mn-3mn t/yr of the product from abroad. Have you already concluded some supply contracts, and can you give us an idea of the amount of orders collected so far? At the moment we have not finalised any pre-sales. We are in no rush, when we are ready we will call our customers. Once word spread that Beltrame was looking to enter the slab market, we received many phone calls and a lot of interest, about 7-8 Italian groups that buy significant quantities of slab have contacted us. Our production capacities are a drop in the ocean when compared with the size of the market, I am sure we will have no issue to sell our allocation. Beltrame has a joint venture with the Grigoli plate rolling mill; what percentage of the slab production will be allocated to this project? I can say that a small percentage will go to the Grigoli re-rolling facility, we have an agreement that they will test the material initially and help us perfect our product. The first batches of our production will be delivered to them. Do you expect to get a green premium on your slabs? We do expect to achieve a green premium, and we are already doing it with our range of Chalibra products, especially in northern Europe where we have some buyers that only request this type of material. The landscape has changed a lot in the past 3-4 years on this front, no matter the pace the future is anyways going towards the direction of decarbonisation. Buyers in recent times have looked evermore east to secure volumes, but with CBAM regulation coming into force, compounded by a volatile geopolitical environment, we can definitely achieve a green premium. What we believe is that our customers will have no issue paying something like €30/t more, for the security of having low-carbon slab only at about a 200km distance from them. On top of this we need Europe to urgently standardise and set some sort of benchmark for the industry on low-carbon steel. At the moment we see both voluntary and involuntary greenwashing occurring. If the project in Vicenza is successful, do you plan to replicate the facility in other countries? Are there any plans to increase production capacity or make new investments, both in Italy and abroad? We are evaluating further investments in the field, but first we need to see how this current project goes. One idea would be to replicate this kind of investment in France not too close to our plant, where we could benefit from low energy costs. We would take up, again, a very small amount of the market share. I think an investment of this type could be useful for our group, would not look to harm our competitors, and above all help reduce the dependence on steel imports in Europe. By Carlo Da Cas Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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