The Construction Monthly Metals Index (MMI) ticked up 5.8% this month, as U.S. construction spending rose in November.

Become part of the MetalMiner LinkedIn group and stay connected to trends we’re watching and interesting metal facts.

U.S. construction spending

U.S. construction spending reached a seasonally adjusted annual rate of $1,459.4 billion in November, the Census Bureau reported this week.

The November rate marked a 0.9% increase from the previous month. Furthermore, the rate increased 3.8% year over year.

Meanwhile, construction spending through the first 11 months of 2020 totaled $1,314.1 billion, up 4.4% compared with the first 11 months of 2019.

Meanwhile, private construction reached a rate of $1,111.8 billion, or up 1.2% from October. Under the umbrella of private construction, residential construction reached $658.1 billion in November, or up 2.7%. Nonresidential construction dipped 0.8% to $453.8 billion.

Public construction fell 0.2% to an estimated seasonally adjusted annual rate of $347.6 billion. Under public construction, educational construction rose 0.3% to $86.7 billion. Highway construction reached a rate of $97.5 billion, or up 1.8% from October.

ABI: billings fall for ninth consecutive month

Aside from construction spending, the Architecture Billings Index (ABI), released monthly by the American Institute of Architects, posted an index value of 46.5 in November.

The November value marked the ninth consecutive month of billings decline. Furthermore, the value fell from 47.5 the previous month. (Any index value less than 50 indicates billings decline.)

Furthermore, the design contracts index checked in at 48.6, down from 51.7 the previous month.

“The recent increase in COVID-19 cases over the last several weeks seems to have put a damper on the nascent recovery, and also appears to be reflected in a decline in the value of new design contracts in November, following their first increase since February last month,” the ABI report stated. “In addition, while inquiries into new work continued to rise, the pace of that growth slowed substantially from the previous two months. Together, these signs indicate that client interest in new projects has started to wane after more encouraging signs last month.”

By region, the Midwest led the way with an index value of 50.1 in November. The West checked in at 48.3, followed by the South (46.7) and Northeast (38.7).

Looking to the calendar year ahead, this month’s ABI survey asked architecture firms about their expectations for 2021 and their biggest concern for the year.

Of the respondents, 7% answered it will be a great year, while 39% predicted it will be a good year. Meanwhile, 25% said it will be a so-so year and 25% anticipate a “challenging” year. In addition, 4% indicated concern it could be a “disastrous” year for their business.

Why are some firms concerned?

Among top three concerns, 29% cited increasing firm profitability.

“The top concerns cited by firms were split fairly evenly between general concerns about running their business and concerns related to the impact of the COVID-19 pandemic,” the ABI report added. “Some of the other top concerns from last year, primarily related to issues around hiring and retaining staff, dropped off the list this year, amid the economic downturn and staff layoffs and furloughs.”

Pending home sales fall in November

Meanwhile, in the housing market, pending home sales fell 2.6% in November from the previous month, the National Association of Realtors (NAR) reported.

The November results marked the third consecutive month of declines.

However, pending home sales were up 16.4% from November 2019. Furthermore, the November Pending Home Sales Index reached 125.7, an all-time high for the month.

As noted earlier, private residential construction spending rose in November.

“The latest monthly decline is largely due to the shortage of inventory and fast-rising home prices,” said Lawrence Yun, NAR’s chief economist, in a release. “It is important to keep in mind that the current sales and prices are far stronger than a year ago.”

Actual metals prices and trends

Although U.S. construction spending gained in November, the world continues to grapple with ongoing economic uncertainty stemming from the coronavirus pandemic.

As for key construction materials, the Chinese rebar price jumped 12.5% month over month to $690.26 per metric ton as of Jan. 1. Meanwhile, the Chinese H-beam steel price ticked up 1.9% to $577.28 per metric ton.

The U.S. shredded scrap steel price surged 38.3% to $401 per short ton.

The European commercial 1050 aluminum sheet price held flat, gaining marginally to $2,722.00 per metric ton.

Chinese iron ore PB fines rose 1.9% to $81.25 per dry metric ton.

Do you know which market conditions are best with different steel contracting mechanisms? Check out our best practices on this topic. 

Source: http://feedproxy.google.com/~r/agmetalminer/~3/VCbhmGy89A8/

Olegs/Adobe Stock

This month the Aluminum Monthly Metals Index (MMI) remained flat, as the Department of Commerce announced the creation of a new Aluminum Import Monitoring and Analysis system.

Does aluminum content call to you? We’re rolling out more on LinkedIn. 

New Aluminum Import Monitoring system

On Dec. 23, 2020, the U.S. Department of Commerce announced the creation of the Aluminum Import Monitoring and Analysis (AIM) system.

The system, similar to the Steel Import Monitoring and Analysis (SIMA) system, will collect and publish data on aluminum imports into the U.S.

The system will allow users to track trade flows more easily to help spot trends earlier and to provide better guidance to the domestic industry and government. Likewise, better data collection and its analysis should allow domestic producers to compete on a level playing field.

The system is expected to be available on Jan. 25, 2021.

LME aluminum changes

The London Metal Exchange announced its intention to move forward with its sustainability strategy after receiving market feedback. Part of the strategy will include a spot trading platform for price research and trading of low-carbon aluminum for interested buyers and sellers.

As part of this strategy, the LMEpassport, a digital credential register, will be launched to allow greater visibility of carbon sustainability criteria.

The LME will implement it gradually over three years across its physically settled metals requiring Certificates of Analysis (CoAs) and other value-add information to facilitate disclosure under existing standards across metal brands. The service will start in 2021 and will initially focus on aluminum.

Moreover, the LME will launch new cash-settled contracts for aluminum, among other metals, on June 14, 2021. These contracts are for European aluminium premiums and U.S. aluminium scrap with the purpose of supporting the electric vehicle transition and the circular economy (an economic system aimed at eliminating waste and the continual use of resources).

Scrap supply tightens in the U.S.

By the end of 2020, the aluminum price had recovered by 36.8% since its low in April. This is due to strong demand in the U.S. and the Chinese market.

This has benefited aluminum producers. For example, Alcoa reported an 11% sequential increase in sales volume of value-add aluminum products over its Q3 2020 results. The climate has also benefited the scrap domestic market.

Last month, Andy McKee, materials trading division president for Schupan, told Recycling Today that aluminum scrap generation is inconsistent across various manufacturing sectors, as some customers have to stockpile material at their homes due to pandemic lockdowns despite growing demand.

However, aluminum scrap did not have to wait for mills to take it, as demand remains strong, particularly in the can sector. McKee mentioned contract metals for 2021 saw a small uptick. Furthermore, mills have lost some leverage compared to the past few years.

Moreover, according to Recycling Today, Davis Index, a metals scrap benchmark provider, reported “that secondary aluminum producers in the U.S. were paying spreads narrowing by the day for most aluminum scrap grades.”

Davis Index also mentioned the pressure the export market is exerting. The scrap benchmark provider noted zorba (a mix of shredded and pre-treated non-ferrous metals) pricing was “breaking 70 cents per pound and moving higher.”

Actual metals prices and trends

The Chinese aluminum scrap price increased 1.9% month over month to $2,058.39/mt as of Friday, Jan. 1. Meanwhile, LME primary three-month aluminum dropped 1.9% to $1,980.50/mt.

Korean commercial 1050 aluminum sheet rose 4.8% to $3.30/kg. Its European equivalent increased 0.1% to $2,722/mt.

Chinese aluminum billet and aluminum bar rose 1.9% to $2,379/mt and $2,483/mt, respectively.

Chinese primary cash aluminum dropped 6.0% to $2,424/mt.

Indian primary cash aluminum increased 1.8% to $2.29/kg.

Sign up today for Gunpowder, MetalMiner’s free, biweekly e-newsletter featuring news, analysis and more.

Source: http://feedproxy.google.com/~r/agmetalminer/~3/qdEn7NwT0Og/

pathdoc/Adobe Stock

This morning in metals news: U.S. average gas prices fell to their lowest level since 2016 last year; the U.S. Treasury announced sanctions against Iran’s steel industry; and Ford Motor Co. released its Q4 2020 U.S. sales results.

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

U.S. average gas price drops in 2020

As MetalMiner readers know, we keep tabs on commodities like oil insofar as they can be price drivers for metals. In short, oil price increases are often supportive of metals prices. (Readers can learn more about our analysis in the most recent update to our Annual Outlook.)

Unsurprisingly, given the slowdown in travel last year stemming from the onset of the COVID-19 pandemic in the U.S., the average gas price fell to its lowest level since 2016, the Energy Information Administration (EIA) reported.

Per the EIA, the average gas price dropped to $2.17 per gallon.

Meanwhile, in mid-March 2020, before the declaration of a national emergency, the average stood at $2.38 per gallon.

U.S. levies sanctions on ‘key actors’ in Iran’s steel sector

The U.S. Treasury on Tuesday announced sanctions on several firms in the Iranian steel sector, in addition to a Chinese supplier of graphite electrodes.

The Treasury announced sanctions on China’s Kaifeng Pingmei New Carbon Materials Technology Co., Ltd. (KFCC), which sold graphite electrodes to Pasargad Steel Complex, the Treasury said.

The Treasury’s Office of Foreign Assets Control also announced sanctions on 12 Iranian steel manufacturers or holding companies.

Ford announces Q4 sales results

Ford Motor Co. announced its total U.S. sales fell 9.8% in Q4 2020 on a year-over-year basis.

Furthermore, truck sales fell 12.5% and car sales fell 41.1%. However, SUV sales ticked up by 4.0%.

In addition, Ford’s full-year 2020 sales fell by 15.6% compared with the previous year.

Join the MetalMiner LinkedIn group — you do not want to miss out on daily MetalMiner news and content.

Source: http://feedproxy.google.com/~r/agmetalminer/~3/qnCBLhLh4Ss/