“It’s a very dynamic market that we’ve been in for the past two years; we’re just dealing with crises at this point,” Chairman Charles J Bernard told Fastmarkets in an interview at the company’s headquarters and main facility in Leesport, Pennsylvania. “We could be in for a tough race over the next year, in terms of supply.”
Eagle Metals – which manufactures custom light gauge strips from copper-based alloys, stainless steel, nickel-based alloys and low carbon steel – hosted the inaugural event of the Precision Metalforming Association’s new Mid-Atlantic District on Wednesday, September 21.
About 60% of the company’s volume purchases are copper-based and 35% are stainless steel, with nickel and carbon making up the rest, according to Bernard. Eagle Metals operates the rolling mill in Leesport and has a service center in El Paso, Texas.
It installed its fifth rolling mill this year, a Sendzimir ZR-24, which will be operational by the end of the year, Bernard said. The new plant will add around 35% more rolling capacity to the Leesport plant, he said, although he declined to specify exactly how many units. This will help Eagle Metals meet increased demand for copper and stainless steel strip in particular, he said.
Most copper and stainless steel plants have had customers in allocation, capped at 2019 levels, since the start of the Covid-19 pandemic, according to Bernard.
Regarding the copper plants specifically, Bernard said: “I won’t say it’s as tight as before — a bit of flexibility has opened up — but it’s still the guidelines they like. follow. Since the factories are still in allocation, we do not negotiate for [annual contracts for 2023]. They tell us what our price is and we are happy to have it.
Domestic stainless steel plants, on the other hand, pulled customers a few months ago and are “looking for orders,” according to Bernard.
However, if copper and stainless steel plants in Europe stop production due to high energy prices, it could have effects similar to the floods in Germany in 2021, according to Bernard. After that flood, some US factories started sending inventory to Europe, which tightened the market here, he said.
“Whether [European mills’] the cost of energy is going up dramatically, and it’s a choice between heating homes this winter or running a bronze factory, they’ll shut down heavy industry,” he said. “Even if they could work, they’d have to raise their prices so much that they wouldn’t be competitive.”
“We buy stainless steel and copper alloys from Europe, so that’s going to be problematic,” he added.
Phosphor bronze, for example, is made primarily in Germany and not at all in the United States, according to Bernard.
“If they close, it will directly affect the US market in a dramatic way,” he said. “Now I have to look at China, India and Turkey… The supply chain is deteriorating, it’s more fractured.”
Eagle Metals also faced three hydrogen-related force majeure events this year that limited the amount of hydrogen it can purchase, Bernard said. The company uses hydrogen to produce annealed products, he said.
Meanwhile, demand for copper is generally increasing, especially from electric vehicles (EVs), which will likely lead to a significant supply shortfall, according to Bernard.
“Copper is going into automotive, electrical, electronics and industrial, and all of those sectors are still pretty strong,” he said. But there’s not enough copper to meet the needs automakers have indicated they’ll need to make more electric vehicles, he said.
“This will weigh on basic industrial needs for all existing applications,” added Bernard. “It’s a real problem, and it’s not solved… There’s not enough copper for today’s demand, or for the need for EVs and electrification in general.”
Metals and mining executives are growing increasingly frustrated with continued delays, impediments and reluctance by regulatory authorities to approve their projects around the world. This is in contradiction with an increasingly strong light on the development of supplies of minerals critical for the energy transition.
The three-month copper price on the London Metal Exchange closed at $7,737 a tonne ($3.51 a pound) on Thursday, September 22, down 16.37% from $9,251 a tonne. one year ago. Fastmarkets priced the grade 1 copper cathode premium, ddp Midwest US at 10-13 cents per pound on Tuesday, September 20. The premium increased by 35.29% over one year, from 8 to 9 cents.
Fastmarkets monthly valuation for 304 stainless steel cold-rolled sheet, fob US plant was $205 per cwt ($4,100 per short ton) on Monday, September 12, up 10.96% from 184 $.75 per quintal on September 10, 2021.