The Monthly MMI®: September 2017: Metals Across The Board Ride Late Summer Growth

MMI | © MetalMinerTM. All rights reserved.
1 of 15
The Monthly MMI®:

Metals Across the Board Ride Late Summer Growth
September 2017
MMI | © MetalMinerTM. All rights reserved. 2 of 15
Table of Contents
1. Introduction/Overview/Executive Commentary on This Month’s MMIs
2. Aluminum MMI® - September 2017
3. Copper MMI® - September 2017
4. Stainless MMI® - September 2017
5. Raw Steels MMI® - September 2017
6. Rare Earths MMI® - September 2017
7. Automotive MMI® - September 2017
8. Construction MMI® - September 2017
9. Renewables MMI® - September 2017
10. Grain-Oriented Electrical Steel (GOES) MMI® - September 2017
11. Global Precious Metals MMI® - September 2017
12. A Note on MetalMiner's Price Outlooks and Benchmarking Capability

Introduction and Overview

Thank you for taking a look at a very exciting offering we launched in January 2012 here at
MetalMiner. The genesis behind creating a range of indexes began with a phone call from one
of our readers, a very large oil and services firm. We spoke with a commodity analyst who
called to ask a very simple question: “Do you know of any indexes besides the BLS indexes
that can help me track what is happening for a range of metal products that I buy?”
We asked a set of follow-up questions – what metals do you buy, and what do you perceive as
the limitations of existing BLS data?
The company buys a range of steel, stainless steel and nickel alloy high-pressure semi-finished
products. The BLS data typically tracks only one single product/grade and, more importantly,
bears little resemblance to what the company had paid for the range of products. The
commodity analyst asked if we could do better.
We couldn’t promise a resounding “Yes” to that question yet (you’ll need to be the judge), but
we said we’d at least take a shot. The 10 MMI reports that appear in this document represent
our best initial attempt to devise a range of indexes that would provide value in the market
using the following guidelines as the basis:
1. Each index should represent a basket of metals or raw materials (depending on the
category) that impact the cost structure for that particular metal market (e.g. coking
coal, scrap, and iron ore for steel prices)
2. The inputs should reflect the global market for that commodity. BLS indexes by default
only include US data, but that may/may not be representative of underlying global price
trends
3. Metal prices often depend upon the underlying demand for various industries (e.g. steel
prices relate to construction industry activity), hence the addition of several key industry
verticals that impact multiple metal markets
Readers can use these MMIs for a range of activities:
1. To better understand underlying month-to-month metal price trends across industries

as well as within specific metal markets
2. To use as an economic indicator, much like the ISM PMI (Purchasing Manager’s
Index) monthly numbers or the BLS PPIs (Producer Price Index)
3. To use for forecasting and predictive analytics
4. To better understand which commodities have the greatest volatility
*Please Note: Exact prices for ALL metals and raw materials in all categories are available to
MetalMiner IndXSM subscribers. Log onto http://agmetalminer.com/metals-price-index/ for more
info!
Contact Us!
Email: info@agmetalminer.com
Phone: 773.525.9750
Executive Commentary on This Month’s MMIs

One-Year MMI Trends
MMI Index Value (Jan. 2012 baseline = 100)

100
90 Aluminum
Automotive
Global Precious Metals
80
Construction
Copper
70 Renewables*
Raw Steels*
60
Stainless Steel
50
40
30
20 Rare Earths
10
0
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2016 2017
© MetalMinerTM. All rights reserved. *Renewables and Raw Steels MMIs restated for May to map the underlying markets more effectively.
The September MMI picked up where last month's left off. Last month, nine of 10 sub-indexes
posted gains, with the GOES MMI the lone sub-index to decline.
This time around? All 10 of the sub-indexes posted upward movement, with several boasting
sizable gains.
The Stainless MMI was the biggest winner by percentage, rising 13.6% for a September
reading of 89 — its highest in two years. Stainless steel surcharges reversed a downward trend
that began in August. However, keep an eye on stainless, because some analysts are saying it
will drop back down.
Other winners included the Aluminum (up 8.2%), Raw Steels (up 9.3%), Construction (up 9.6%)
and Copper (up 7.7%) MMIs. The Raw Steels MMI surged back to its highest levels since 2014,
powered by rising Chinese steel prices. Like stainless, however, those gains might not last. As
our Irene Martinez Canorea explained, price dynamics for raw materials slowed in August.
Aluminum continued its rise, too, reversing a sluggish start to the year. LME aluminum prices
rose 10.73% on the month. But, as with other metal sectors, if there is a rise, there can be a
fall. Chinese and Indian demand for the metal will need to be watched, in addition to Chinese
capacity curtailment efforts.
Meanwhile, the GOES MMI took a step up — after a downward trend dating back to May — on
the heels of increasing imports of grain-oriented electrical steel (GOES).
In the background, the Trump administration's Section 232 investigations into steel and
aluminum imports have yet to be publicly concluded. The deadlines for both probes are
in January. In addition, negotiations regarding the North American Free Trade Agreement
(NAFTA) have gone through two rounds, without much in the way of breakthroughs so far. U.S.
withdrawal from the 23-year-old trilateral trade agreement would certainly impact supply chains,
including North American metals supply chains. — Lisa Reisman, Executive Editor, MetalMiner
Monthly Aluminum MMI® Jumps to 97

100
Aluminum
Jan 2012 Baseline = 100

95
MMI®
90
85
80 August 2017
89
75
September
70 97
Up 8.2%
Index Value
65 October 2017
TBD
60
2016 2017
© MetalMinerTM. All rights reserved.
Source: MetalMiner IndXSM.
The Aluminum MMI increased eight points from last month’s reading, reaching its highest
value since September 2014.
This rise does not come as a surprise to MetalMiner, as aluminum was the strongest
performer in August, increasing by 10.73% during the month.
Aluminum has awakened from its previous sideways trend and now continues its previous
uptrend.
Some analysts do not expect more movements to the upside, as the supply and demand
equation appears unclear. Positive data and increasing demand in China have supported
aluminum prices so far.
However, Morningstar forecasts a decrease in Chinese demand. Meanwhile, Indian demand

may not increase quickly enough to balance global demand.
On the supply side, Chinese curtailment of capacity remains uncertain. Similar to steel, the
real impact of curtailments on production remains to be seen.
“Green” aluminum appears to be a new trend among buying organizations. The difference
lies in the use of renewable energy instead of fossil fuels in the smelting process. Premium
prices have risen for this type of aluminum, as demand continues to rise due to pressure on
buying organizations to lower their carbon footprint. [Continued...]
CLICK HERE FOR THE FULL ARTICLE, MORE CHARTS AND ALL GLOBAL PRICES.
The Aluminum MMI® collects and weights 12 global aluminum price points to provide a
unique view into aluminum price trends over a 30-day period. For more information on the
Copper MMI®, how it's calculated or how your company can use the index, please drop us a
note at: info (at) agmetalminer (dot) com.
Monthly Copper MMI® Surges Again

100
Copper

95
MMI®
90
85
80
August 2017
75 78
70 September
84
65
Up 7.7%
Index Value
60 October 2017
TBD
55
Sep Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sep
2016 2017
This month’s Copper MMI beat its previous gain last month en route to a six-point increase.
The boost was primarily driven by an outperforming LME copper price, which has been
seemingly unstoppable since the Chinese copper ban was announced July 24.
Copper tends to correlate with the U.S. dollar. As a dollar-denominated commodity, a weaker
dollar can stimulate copper buyers. The U.S. dollar has not found a floor yet, and has continued
falling, reaching a two-year low now.
Commodities, on the other hand, have increased again during the first week of September. A
recovery in oil prices has led the increase.
Though it’s much too early to change the commodity outlook to bullish, we did expect the
correlation between commodities and industrial metals to come back to a more normal state
(where they both tend to move in the same direction).
If commodities start an uptrend, then copper prices may continue their bullish rally, too.
What About China?

As China is the main commodity consumer of the world, analysts pore over Chinese economic
data. Chinese economic data released during this summer resulted in better-than-expected —
that is, increasing manufacturing PMI — manufacturing data. [Continued...]
The Copper MMI® collects and weights 12 global copper metal price points to provide a unique
view into copper price trends over a 30-day period. For more information on the Copper MMI®,
how it's calculated or how your company can use the index, please drop us a note at: info (at)
agmetalminer (dot) com.
Monthly Stainless MMI® Rises 8 Points

100
95 Stainless

90 MMI®
85
80
75 August 2017
59
70
September
65 67
60 Up 13.6%
Index Value
55 October 2017
TBD
50
2016 2017
The Stainless MMI has inched eight points higher this month, reaching July 2015 levels.
The increase was driven by higher nickel prices, together with an increase in stainless steel
surcharges.
Stainless steel surcharges have increased this month after decreasing month-over-month since
April.
Despite the uptick in the Stainless MMI, however, many analysts believe stainless steel will fall
in the upcoming months.
Even if the increase in prices for global stainless steel flat products increased by 6% during
the first months of 2017, Oliver Spaltman, senior market analyst for Steel & Metals Market
Research (SMMR), estimates that the full-year demand growth in 2017 will be 4%.
In early September, the U.S. Department of Commerce launched anti-dumping and

countervailing duty investigations on stainless steel flange products from China and India. The
U.S. International Trade Commission (ITC) is scheduled to make its preliminary determinations
in the investigations Oct. 2.
Nickel prices began falling in early September from their previous peak. However, the uptrend
remains clear and strong; we could see upward movements in the coming months.
Higher demand, boosted by Asian battery makers, has aided nickel’s rally. The Chinese electric
vehicle market has grown during 2016 and 2017, producing 43% of the worldwide electric
vehicle fleet in 2016. [Continued...]
CLICK HERE FOR THE FULL ARTICLE, MORE CHARTS AND GLOBAL PRICES.
The Stainless MMI® collects and weights 12 global stainless and nickel price points to provide
a unique view into stainless price trends over a 30-day period. For more information on the
Stainless MMI®, how it's calculated or how your company can use the index, please drop us a
note at: info (at) agmetalminer (dot) com.
Monthly Raw Steels MMI® Jumps 9.3%

100
95 Raw Steels

90 MMI®
85
80
75
August 2017
70
75
65 September
60 82
55 Up 9.3%
Index Value
50 October 2017
TBD
45
2016 2017
Source: MetalMiner IndX.
The Raw Steels MMI increased again this month by seven points, returning to 2014 levels.
The increase came as a result of rising Chinese steel prices, which have rallied since April
2017.
Early September data reveal that Chinese hot-rolled coil (HRC) prices increased more quickly
than U.S. HRC prices.
Domestic steel prices, including HRC prices, mostly held steady in August. The spread between
the two has fallen by 5% since the beginning of August. Rising Chinese prices typically lead to
reduced imports overall, as U.S. prices become more competitive.
Chinese steel prices have been boosted by better-than-expected demand, together with supply
concerns.
China Data Creates Uncertainty
China remains the dominant player in steel market.
Thus, Chinese economics serve as one of the most powerful indicators of the steel industry.
Chinese economic data, however, has created some uncertainty around the steel market. Even
if the market expects a correction, economic indicators still reveal positive data.
Yet, some analysts believe China remains in a bubble set to explode at any time. [Continued...]
The Raw Steels MMI® collects and weights 13 global steel and raw material price points to
provide a unique view into global steel price trends over a 30-day period. For more information
on the Raw Steels MMI®, please drop us a note at: info@agmetalminer.com.
Monthly Rare Earths MMI® Gains Point

100
90
Rare Earths

80 MMI®
70
60
August 2017
50
23
40 September
24
30
Up 4.3%
Index Value
20 October 2017
10
TBD
2016 2017
© MetalMinerTM. All rights reserved. MetalMiner.com

The Rare Earths MMI ticked up one point for a September reading of 24.
After hitting 29 in April 2015, the sub-index fell as low as 16 last year before slowly climbing
back up this year with an uptrend that began in March.
For this MMI period, several of the sub-index’s heavy hitters posted strong months. Chinese
terbium oxide rose 2% and Chinese dysprosium oxide rose 5.6%. Neodymium oxide rose a
whopping 35% in the month.
An overwhelming majority of rare-earth metals production comes from China, and the metals
are crucial for use in things like computers, phones and other electronic devices.
According to a recent report on nasdaq.com, China’s Rare Earth Industry Association recently
proposed “releasing some of the country’s reserves and suspending the purchase and storage
of additional volumes to ease price volatility for the raw materials that are crucial to mobile
phones and electronics.”
Reuters’ Andy Home recently wrote about the topsy-turvy world of rare-earth metals prices.
“The prices of neodymium and praseodymium oxide are going stratospheric again, up by over
80 percent since the start of the year,” Home wrote. “As ever with rare earths, this is all about
what is happening in China, the world’s dominant producer of these critical materials.”
Rare earths have come a long way since the market collapsed underneath them in 2012.
The Financial Times reported last month that the price of two rare earths, neodymium and
praseodymium, has jumped by more than 50% this year. [Continued...]
The Rare Earths MMI® collects and weights 14 global rare earth metal price points to provide a
unique view into rare earth metal price trends over a 30-day period.
Monthly Automotive MMI® Hits the Gas

100
Automotive

95
MMI®
90
85
80 August 2017
90
75
September
70 94
Up 4.4%
Index Value
65
October 2017
60 TBD
Sep Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sep
2016 2017
The Automotive MMI jumped four points to 94, up from 90.
Major price jumps in the basket of metals relevant to the automotive sector, particularly copper,
paced a strong month for the sub-index.
LME copper jumped 6.8%, as the metal hit a three-year high in August. U.S. shredded scrap
steel rose 4.5%, while U.S. hot-dip galvanized (HDG) steel jumped 1.1%. U.S. platinum and
palladium bars also posted sizable price jumps.
U.S. Auto Sales

Auto sales in 2017 have trended downward, which hasn’t exactly been a surprise given the
record sales figures posted in 2016. Sustaining last year’s sales totals would have been a tall
task.
However, the news hasn’t been all bad.
According to Autodata Corp sales data released Sept. 1, General Motors had a good month,
selling 275,326 units — a 7.4% increase from sales in August 2016. GM’s light truck sales
carried the day, rising by 16.5% compared with August 2016. In the year to date, however,
sales overall remain down by 2.4% compared with the same time frame last year.
Ford sold 209,029 units, down 2.1% compared with August 2016. Ford’s year-to-date sales are
down 4% compared with the same time frame in 2016.
Fiat Chrysler posted a 10.6% drop in sales in August compared with the same month last year,
and a 7.7% year-over-year decline. [Continued...]
The Automotive MMI® collects and weights 7 metal price points used in automotive production
to provide a unique view into automotive metal trends over a 30-day period.
Monthly Construction MMI® Builds to 91

100
Construction

95
90 MMI®
85
80
75 August 2017
70 83
65 September
60 91
Up 9.6%
Index Value
55
October 2017
2016 2017 TBD
The Construction MMI jumped eight points for our September reading, rising from 83 to 91.
According to U.S. Census Bureau data released Sept. 1 for the month of July (the most recently
available data), U.S. construction spending amounted to $1,211.5 billion, down from the revised
June total of $1,219.2 billion.
However, construction spending from January-July amounted to $691.2 billion, up 4.7% from
the $659.9 billion for the same period in 2016.
Spending on private construction dipped 0.4% to a seasonally adjusted annual rate of $945.5
billion, down from the revised June estimate of $949.4 billion.
As for public construction, the estimated seasonally adjusted annual rate of spending was
$266.0 billion, 1.4% below the revised June estimate of $269.8 billion.
As for the individual metals in this particular basket, every single one posted a price increase
for the month. Chinese rebar steel, H-beam steel, and aluminum bars all posted sizable price
increases. The European 1050 aluminum sheet price also rose, as did U.S. shredded scrap
steel.
ABI Shows Continued Upward Trend

Although overall spending was down in July, the Architecture Billings Index (ABI) painted a
positive picture for the month. [Continued...]
The Construction MMI® collects and weights 9 metal price points used within the construction
industry to provide a unique view into construction industry price trends over a 30-day period.
Monthly Renewables MMI® Rises 7 Points

100
Renewables

95
MMI®
90
85
80
August 2017
75
77
70
September
Lor
65 84
60 Up 8.3%
Index Value
55 October 2017
TBD
50
2016 2017
© MetalMinerTM. All rights reserved. MetalMiner.com *Index had been recalibrated in May 2017 to better account for cobalt price fluctuations
The Renewables MMI rose seven points in August, reaching a reading of 84.
The basket of metals in this sub-index posted a strong month. Steel plate from Japan, Korea
and China rose in the month. U.S. steel plate, however, fell 4.6%.
Meanwhile, in the topsy-turvy world of grain-oriented electrical steel (GOES), the U.S. GOES
price jumped 7.3%.
Of the nine metals in the sub-index, only one (U.S. steel plate) posted a drop in price as of
Sept. 1. Chinese silicon, cobalt and neodymium all also posted price gains.
Charged Up for Cobalt

Last month, we wrote about cobalt, which is in high demand for its application in electric vehicle
batteries. Cobalt is mined predominantly in the Democratic Republic of Congo, which has been
shaken by violence and political instability this year.
The instability there has seen production in the DRC decrease this year, yielding significant
price increases in the metal. As we wrote last month, the instability of cobalt (not to mention
growing ethical concerns vis-a-vis child labor at mines) has some battery makers looking to
adjust their metal formulas, in some cases suggesting the use of more nickel, instead.
According to a Reuters report, however, cobalt has been boosted by projections touting a rise in
purchases of electric vehicles. [Continued...]
The Renewables MMI® collects and weights 8 metal price points over a 30-day period.
Monthly GOES MMI® Bounces Back

225
Grain-Oriented

220
215
Electrical Steel
210 GOES MMI®
205
200 August 2017
195 181
190 September
185 193
Up 6.6%
Index Value
180
175
October 2017
TBD
170
2016 2017
The September GOES MMI increased by a full 12 points, reaching 193. Market observers can
note with interest that this rise comes on the back of increasing GOES imports, as noted by
Roger Newport, CEO of AK Steel, on a recent earnings call.
Unlike other steel markets, when sudden large volumes of imports begin to arrive typically a big
spread exists (the price between the domestic and international markets).
In this case, something else appears to explain the volume of imports into the U.S.
When we examine the total volume of grain-oriented electrical steel (GOES) imports into the
U.S., indeed, the assertion of increased import volumes appears correct:
But when we look at what is driving those imports, we come to a different conclusion – that
Japanese GOES imports have led the increase (and in fact account for 55% of GOES imports):
One could argue these imports hardly appear “dumped," as the average price for Japanese
material at $2,627/metric ton appears just under the MetalMiner domestic M3 spot price. In
fact, by our own analysis of import prices, the average import price of Japanese material for the
last six months has only diverged from our M3 spot index by no more than $68/mt, and in one
month was more expensive by $64/mt!
It’s hard to see how GOES has been “dumped” into the U.S. market. [Continued...]
CLICK HERE FOR THE FULL ARTICLE AND THE ACTUAL GOES PRICE.
*MetalMiner is currently recruiting buyers of GOES to participate in a price benchmarking

process to provide specific GOES prices by grade. Participants would receive aggregated
anonymous price information. If you are interested in contributing and receiving price data,
please contact us - lreisman@metalminer.com.
Monthly Precious Metals MMI® Hits '17 High

100
Global Precious

95 Metals MMI®
90
85
August 2017
80
85
September
75 89
Up 4.7%
Index Value
70
October 2017
TBD
65
2016 2017
Here’s What Happened

• MetalMiner’s Global Precious MMI, tracking a basket of precious metals from across the
globe, tore itself away from a one-month downward trend to rise 4.7% for a reading of 89. That
value was up from 85 at the beginning of August.
• Palladium continues its steady yet undeniable march upward. The platinum-group metal
(PGM) crushed it with yet another recent high, ending up above the $900 per ounce level as of
Sept. 1. As of this writing, palladium is holding on to that increase, still hovering near that level.
Platinum is no slouch either, creeping upward even closer to its recent high of March 2017,
when it landed above $1,000 per ounce.
• The U.S. gold price broke — and held above — the $1,300 per ounce threshold at the
beginning of the month for the first time since October 2016.
What’s Going On in the Background?

•Unless you’ve been living in a cave, you would’ve been hard-pressed to miss the hurricane
and tropical storm news of the past couple weeks. No sooner did Hurricane Harvey slam into
the Texas Gulf Coast region, Hurricane Irma made her way up into the center of Florida soon
after.
• Aside from natural disasters, other price drivers, such as political uncertainty surrounding
North Korea and the U.S. Congress’ tussle over how to deal with the debt ceiling — and
potential government shutdown — certainly have taken their toll on investor sentiment.
What Metal Buyers Should Look Out For

How will the recent storm disasters affect precious metals prices? It could hit gold and silver
refiners especially hard, as South Florida is home to one of the biggest precious refiners in the
country and is also a hub for “assaying, refining, logistics and financing operations,” according
to this article citing, ultimately, reporting done by the Miami Herald. [Continued...]
The Global Precious Metals MMI® collects and weights 14 global precious metal price points to
provide a unique view into precious metal price trends over a 30-day period.
A Note on MetalMiner's Price Outlooks and Benchmarking

MetalMiner's custom offerings help companies:
- Improve purchase timing

- Gauge expected volatility
- Create more competitive bids to customers
- Develop risk mitigation strategies
Our Monthly Buying Outlook reports include: HRC, CRC, HDG, steel plate, aluminum, copper,
nickel, tin, lead and zinc.
Our MetalMiner Benchmark allows you to see exactly how your price stacks up historically and in
today’s rapidly changing price environment.

The Monthly MMI®: September 2017: Metals Across The Board Ride Late Summer Growth

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MMI | © MetalMinerTM. All rights reserved.

The Monthly MMI®:

2. Aluminum MMI® - September 2017

3. Copper MMI® - September 2017

4. Stainless MMI® - September 2017

5. Raw Steels MMI® - September 2017

6. Rare Earths MMI® - September 2017

7. Automotive MMI® - September 2017

8. Construction MMI® - September 2017

9. Renewables MMI® - September 2017

10. Grain-Oriented Electrical Steel (GOES) MMI® - September 2017

11. Global Precious Metals MMI® - September 2017

12. A Note on MetalMiner's Price Outlooks and Benchmarking Capability

Introduction and Overview

Readers can use these MMIs for a range of activities:

1. To better understand underlying month-to-month metal price trends across industries

Executive Commentary on This Month’s MMIs

MMI Index Value (Jan. 2012 baseline = 100)

Monthly Aluminum MMI® Jumps to 97

Jan 2012 Baseline = 100

© MetalMinerTM. All rights reserved.

Source: MetalMiner IndXSM.

However, Morningstar forecasts a decrease in Chinese demand. Meanwhile, Indian demand

Monthly Copper MMI® Surges Again

Jan 2012 Baseline = 100

© MetalMinerTM. All rights reserved.

Source: MetalMiner IndXSM.

What About China?

Monthly Stainless MMI® Rises 8 Points

Jan 2012 Baseline = 100

© MetalMinerTM. All rights reserved.

Source: MetalMiner IndXSM.

In early September, the U.S. Department of Commerce launched anti-dumping and

Monthly Raw Steels MMI® Jumps 9.3%

Jan 2012 Baseline = 100

© MetalMinerTM. All rights reserved.

Source: MetalMiner IndX.

China Data Creates Uncertainty

China remains the dominant player in steel market.

Monthly Rare Earths MMI® Gains Point

Jan 2012 Baseline = 100

© MetalMinerTM. All rights reserved. MetalMiner.com

Monthly Automotive MMI® Hits the Gas

Jan 2012 Baseline = 100

© MetalMinerTM. All rights reserved.

Source: MetalMiner IndXSM.

The Automotive MMI jumped four points to 94, up from 90.

U.S. Auto Sales

However, the news hasn’t been all bad.

Monthly Construction MMI® Builds to 91

Jan 2012 Baseline = 100

© MetalMinerTM. All rights reserved.

Source: MetalMiner IndXSM.

ABI Shows Continued Upward Trend

Monthly Renewables MMI® Rises 7 Points

Jan 2012 Baseline = 100

Source: MetalMiner IndXSM.

Charged Up for Cobalt

Monthly GOES MMI® Bounces Back

Jan 2004 Baseline = 100

© MetalMinerTM. All rights reserved.

Source: MetalMiner IndXSM.

*MetalMiner is currently recruiting buyers of GOES to participate in a price benchmarking