Global Stainless Crude Steel production rises 5.5% in Jan-Sept 2013: ISSF

International Stainless Steel Forum (ISSF) reports that global stainless crude steel production increased by 5.5% for the first 9 months of 2013 y–o–y. Production for the 3rd quarter 2013 was at 9.3 mmt.

International Stainless Steel Forum (ISSF), in its preliminary report, shows that global stainless crude steel production increased by 5.5% for the first 9 months of 2013 y–o–y. Production for the first nine months of 2013 totalled 28 million metric tons (mmt), up 1.4 mmt in comparison to the same period of 2012. Production for the 3rd quarter 2013 was at 9.3 mmt, a new all–time 3rd quarter high. However significant differences in regional development prevail.

Asia excluding China recorded a stainless crude steel production of 6.5 mmt during quarters 1–3 of 2013 corresponding to a y–o–y decrease of -1.4%. The development of this region shows a mixed picture ranging from +5% (India) to -6% (Taiwan, China). In the PR of China stainless steel production increased by 1.9 mmt or +15.7% to 13.7 mmt during the first nine months in comparison to 2012. China now accounts for roughly half of global production.

The development of Western Europe/Africa was distinctly different with a y–o–y decrease of -5.6% (-0.336 mmt) and a total stainless steel production of 5.7 mmt for the first 9 months of 2013. Here too the development is heterogeneous fluctuating from +1 to +3% in Belgium and France to double digit negative values in Italy and Germany with the UK trailing behind at -15%.

Stainless steel production in the Americas for the first 3 quarters of 2013 is stable in comparison to last year at 1.8 mmt with an upward trend during this period. Central and Eastern Europe display a strong growth at +8% and 0.30 mmt, up from 0.27 mmt.

Q3 of 2013 was stronger than Q2 thus not following the usual seasonal pattern. In the face of regional economic developments which in general show a strong Q2 and weaker Q3 this is most likely a singular quarter on quarter compensational effect. Western Europe/Africa and Central and Eastern Europe are the exceptions displaying the usual seasonal downturn.

Natgas prices recover after profit booking, Nymex volumes surge in Jan

Nymex Henry Hub natural gas futures prices slumped to $4.7 per MMBTU on profit booking and moderating US cold conditions but has now recovered to above $5.279 per MMBTU in electronic trading on Wednesday. At India's Multi Commodity Exchange (MCX) Nat gas futures have traded in 298.60-335.40 range with bullish trend still intact on global cues, analysts said.

Natural gas futures were likely to find support at USD4.769 per million British thermal units, Monday's low, and resistance at USD5.481, Wednesday's high.Updated weather forecasting models called for bitter cold weather across the U.S. during the next three-to-five days, with heavy snow expected in the Northeast and Midwest, edging out previous forecasts for a thawing trend

Tech view
US heating demand is expected to rise in February as below normal temperaturs could grip much of the lower 48 states- this is turn is keeping the market bullish, analysts said.Investing.com is neutral on Natgas futures but an RSI of 63.961 indicates buying while stochastics indicates oversold position. MACD in negative territory indicates selling.

Nymex volumes surge 

Meanwhile record volumes were witnessed in natural gas futures at New York Mercantile Exchange (Nymex), according to CME Group. It said average daily volume for its natural gas futures and options complex increased by 30 percent last month compared to January 2013. This provided strong support for the launch of natural gas basis markets on CME Direct, CME Group's electronic trading platform for listed and OTC energy markets.

Average daily volume (ADV) for all natural gas contracts trading on the New York Mercantile Exchange (NYMEX), including the benchmark Henry Hub Natural Gas futures contract, was 736,238 contracts a day, compared to 564,791 in January 2013, a 30 percent increase year-over-year. This is the second month of strong growth for natural gas. ADV in December 2013 was 655,121 contracts, compared to 468,186 in December 2012, an increase of 40 percent.

NYMEX natural gas options ADV in January was 210,127 contracts, an increase of 73 percent since January 2013 and 25 percent since December 2013. Natural gas options traded electronically set a single day volume record on January 24, when 75,778 lots traded over CME Globex. The last record was 56,447, which was set on January 17, 2013.

January also saw the launch of natural gas basis markets on CME Direct. In response to strong customer demand, CME Group now offers market participants the ability to trade the natural gas Basis suite on the same exchange that settles the benchmark Henry Hub Natural Gas (NG) contact. As part of this, CME Group has added over 40 new regional contracts to compliment the basis complex, and has launched more functionality on CME Direct to match the way customers prefer to trade.

"Since the launch, we have seen active market making on the screen, with a diverse group of participants across several points in all four regions and trading activity in the prompt month, calendars and some long-dated activity," said Gary Morsches, Managing Director, Global Energy. "With the increase in volatility in the energy markets and strong trading activity across our natural gas complex, we think this new suite of products is well positioned to meet all the hedging needs of our customers."

The NYMEX suite of natural gas futures and options contracts are listed by and subject to the rules of NYMEX.

US Natgas withdrawals rise to new record for lower-48 output

Gross withdrawals of natural gas in the Lower-48 rose 1.13 Bcf/d, to 75.95 Bcf/d, in November 2013, according to the latest EIA Monthly Natural Gas Gross Production Report. This sets a new record for lower-48 output. The reported production growth fell slightly short of pipeline flow estimates, which had pointed to a 1.5 Bcf/d increase, according to a Barclays report.

The bulk of the growth came from Other States, where production had an equivalent 1.13 Bcf/d rise from October levels. Other States include the Marcellus shale in Pennsylvania, where producers connected numerous recently completed wells to several newly constructed pipelines that started operation in November.

Elsewhere, production was nenaturarly unchanged in Louisiana, which is a sign of strength compared with 200-300 MMcf/d m/m declines in August-October. Texas output dropped 250 MMcf/d, largely as a result of weather-related issues and maintenance outages during November. Similar factors dragged New Mexico production 110 MMcf/d lower than in the previous month. Production jumped 250 MMcf/d in the Gulf of Mexico, mainly as a result of production returning to normal levels following Tropical Storm Karen in the previous month.

In aggregate, onshore lower-48 production maintains a robust growth trend. In November 2013, gross withdrawals were 72.38 Bcf/d, up 3.79 Bcf/d from November 2012 levels.

October 2013 production was revised higher by 220 MMcf/d, largely as a result of a 210 MMcf/d upwards revision to Texas production.

"While we expect production to remain in growth mode for the foreseeable future, the next several reports are likely to show m/m declines, as numerous wells were affected by widespread freeze-offs across the country. Pipeline flow reports point to a 1 Bcf/d m/m drop in production in December," Barclays said.

Ford 150 to change demand dynamics for Aluminium in automobiles

Barclays in a report pointed out that aluminium could face the biggest market deficit in 2014 and aluminium substitution in automobiles is also gaining momentum. Automotive industry accounts for 40% of the end demand

Aluminium use was so far restricted to use in low-volume luxury and sports car models but with the F-150, Ford is taking it to bringing it to mainstream, Automotive News commented. F-150 has 450 kg of aluminium, nearly three times the current average aluminium vehicle content.

Barclays in a report pointed out that aluminium could face the biggest market deficit in 2014 and aluminium substitution in automobiles is also gaining momentum. Automotive industry accounts for 40% of the end demand for aluminium.

"Far from a one-off or publicity stunt, this can seen as part of a serious and sustained sectoral trend geared toward meeting CAFE standards and associated fuel efficiency targets," Barclays said.

Global primary aluminium market in 2014-potentially the tighest annual balance since the early 1980's.