Nemak runs die-cast trials at new US facility

Spanish Market: Metals
23/07/26

Mexican automotive components manufacturer Nemak produced its first structural castings on a trial basis at its new $184mn facility in Augusta, Georgia, from where the company expects to start commercial operations in the second half of 2026.

Construction of the "mega-casting" plant is "substantially completed", with the Monterrey, Mexico-based company beginning production and qualification tests after installing key equipment in the second quarter, it said on Wednesday in its latest earnings release. Nemak acquired the facility through its $336mn purchase of Georg Fischer's castings business, which closed in February.

The company anticipates ramping up output from the facility over the next two years starting in 2027, as Nemak seeks to support firm demand for high-pressure die-cast components made from aluminum and magnesium that are used in both internal combustion engine and electric vehicle applications.

Nemak said it does not expect any significant impact on its operations from recent developments with the US-Mexico-Canada free trade agreement (USMCA), calling the situation "quite fluid" after the White House declined to renew the deal in its current iteration to push for revised terms.

As part of its proposed changes, the US is seeking to tighten minimum US-origin content requirements in products covered under the pact, which would include automotive parts and may force companies to increase its procurement of domestically produced aluminum.

"We do have the means to support the current levels of regional content," chief financial officer Alberto Medina told analysts. "But to the extent that we need to source more, certainly we will move in that direction with the adequate commercial adjustments to our customers if that represents any type of incremental costs."

The company reiterated that it broadly was insulated from 50pc import duties the US levied under Section 232 authority of the 1974 Trade Act, noting that it sells on an ex-works basis under its contract structure, meaning customers are responsible for any costs — tariff or otherwise — related to bringing products into the US.

Nemak's losses in April-June narrowed to $13mn from $24mn a year earlier, while revenues increased by nearly 19pc to $1.5bn, both of which reflected costs and earnings related to the company's acquisition and integration of the Georg Fischer unit.

By Alex Nicoll

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06/11/26

Venezuela inflation eases for 3rd month in Oct

Caracas, 6 November (Argus) — Venezuela's inflation eased to a monthly 6.2pc in October, a third month of slowing price gains. The consumer price index (CPI) eased from 8.4pc in September and 8.9pc in August from 19.9pc in July, the highest since it reached 32.6pc in January, the central bank reported Thursday. On an annual basis, consumer prices rose by 377pc in October from a year earlier, compared with 466pc in September from a year earlier, down from about at 650pc in March, according to central bank data. The slowing inflation is the "result of coordination between the executive branch and the Venezuelan central bank, together with progress in reestablishing fiscal balance, supported by fiscal discipline and the normalization of external flows and increases in tax collections," the central bank said in a statement. "Inflation reported for October was the lowest in the last 24 months" acting President Delcy Rodriguez said on 3 November during a public event. Monthly inflation was running at 4pc in October 2024, according to the central bank data. Gasoline prices remain at subsidized prices of $0.50 per liter and diesel at $0.80 per liter. The bolivar continues to weaken though at a slower pace against the US dollar. The official exchange rate ended October at about Bs895 to the dollar, compared with about Bs298 to the dollar at the start of 2026. Meanwhile, in the parallel market the exchange rate still continues at about Bs1,000 to the dollar. Venezuela's inflation accelerated sharply in January 2026 as the US military operation on 3 January to capture then-president Nicolas Maduro added to existing economic and political uncertainty. Inflation had already been accelerating before the operation, amid persistent shortages of foreign currency and a widening gap between official and parallel exchange rates. Those currency distortions have remained an important driver of inflation, with changes in the bolivar closely reflected in domestic prices. The central bank and the Ministry of Economy signed on 27 October an agreement which aims to reduce inflation for 2027 to the double digits and boost economic growth to 6pc for the next year. By Jose Chalhoub Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

US adds 165,000 jobs in October, well above forecasts

06/11/26

US adds 165,000 jobs in October, well above forecasts

Houston, 6 November (Argus) — The US added 165,000 jobs in October, more than double the forecasts, and revisions for the prior two months put the labor market on a stronger trajectory than previously estimated. Job growth in October compared with an upwardly revised 60,000 for September, from a prior 29,000, while August was revised up to 186,000 from 133,000, the Bureau of Labor Statistics (BLS) reported. That puts the three-month average at about 137,000 jobs, compared with 28,000 for the three months through July. The stronger-than-expected jobs number could give the Federal Reserve more room to concentrate on bringing down inflation, with the labor market appearing more resilient than it did earlier this year. The Fed hiked its target rate by a quarter point to 3.75-4pc at its meeting in September, the first hike since mid-2023, and held it unchanged in October. "Labor demand has gained momentum recently, but tighter financial conditions suggest a renewed slowdown is likely in 2027," Pantheon Macroeconomics' chief US economist Samuel Tombs says in a note. "The drag on office-based employment will intensify in 2027, given the steady increase in the number of businesses using AI." Probability of a quarter point rate hike by the Federal Reserve in December rose to 79.4pc after the labor report compared with 67pc Thursday, according to the CME's FedWatch tool. The unemployment rate ticked down to 4.1pc from 4.2pc. Average hourly earnings rose by 0.4pc on the month and by an annual 3.1pc in October. Professional and business services added 70,000 jobs, compared with 8,000 in the prior month. Healthcare added 42,000 compared with 18,000 the prior month. Transport and warehousing added 25,000 jobs last month compared with 7,000 the prior month. Retail trade added 6,000 after a gain of 13,000 the prior month. Manufacturing added 19,000 jobs compared with 13,000 the prior month and has added 101,000 jobs since a recent low in December 2025. Computer and electronic product manufacturing added 7,000. Semiconductor, component and navigational instrument jobs together added about 5,500. Primary metal manufacturing added 4,000 jobs. Financial activities gained 7,000 after a loss of 14,000. Construction lost 3,000 jobs after gains of 16,000. Leisure and hospitality lost 13,000 job, reversing a similar gain. Mining lost 1,000 jobs. The Federal government lost 1,000 jobs following losses of 3,000 the prior month, while state and local government added 7,000 following losses of 15,000. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

ADI slab tolling fees unmanageable for buyers

06/11/26

ADI slab tolling fees unmanageable for buyers

London, 6 November (Argus) — Italian steelmaker Acciaierie d'Italia's (ADI) slab tolling fees of €160–170/t are proving unmanageable for some buyers, rendering conversion economics unviable compared with prevailing domestic hot-rolled coil (HRC) spot prices. ADI has pivoted toward offering toll rolling services at its Taranto facility following court orders to halt upstream hot-end operations. The Italian Supreme Court recently upheld a Milan Court of Appeal ruling ordering the suspension of hot-end production in Taranto over environmental infractions. With its own crude steel and slab-making capabilities restricted, the plant has been forced to look to rely on imported slab, pushing the company to market available rolling capacity to third parties in the second half of this year. However, market participants reported that ADI's quoted conversion fees of €160–170/t would not make commercial sense in the current pricing environment for all but the largest of buyers who can benefit from purchasing larger quantities of slab and perhaps a more preferential tolling agreement. One trader saw tolling contract prices at €190/t, a price which includes the delivery of the finished product at Ravenna port. It may make economical sense but it depends what you do with the material, the same source said, pointing out that any tolling material produced would have to see further transformation downstream to ensure some type of sales margin. One buyer noted that slab would need to be purchased with the intention of producing specific coils and would therefore be most suitable for commodity grades only. Heavy plate production lines were not in discussions for tolling, according to sources close to the matter. Some market participants calculate that with imported Chinese slab offered at around $590/t cfr, and at least a budgeted CBAM obligations of €30/t, the landed slab cost would be approximately €555/t. Adding ADI's tolling fee of around €160/t alongside an estimated 3pc yield loss incurred during rolling, lifts the base cost well above €700/t. Inland logistics, as well as CBAM deposit financing for next year, further erode margins. Freight from Taranto in southern Italy to northern Italian manufacturing hubs or key ports such as Ravenna and Marghera adds additional costs, resulting in an effective delivered cost close to current spot prices. Yesterday's daily Argus Italian domestic HRC index stood at €748.50/t ex-works, leaving little margin for buyers who must shoulder feedstock procurement and financing risks. Market participants pointed out that the negligible gap between effective ADI-rolled coil costs and prevailing market prices offers no discount or risk premium to justify booking capacity at Taranto. Given the company's operational and legal uncertainties, buyers argue that the spread is far too narrow to offset the threat to the operations. In addition, rolling from externally procured slab is energy intensive, while ADI has high fixed costs associated with employee levels, meaning the tolling model will unlikely be a workable long-term solution that can ease supply pressures on the EU market. By Lora Stoyanova & Carlo Da Cas Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Mexico central bank cuts target rate to 6.25pc

05/11/26

Mexico central bank cuts target rate to 6.25pc

Mexico City, 5 November (Argus) — Mexico's central bank (Banxico) on Thursday cut its benchmark interest rate by a quarter point to 6.25pc, its lowest level in more than four years. Banxico had held the rate unchanged over the past three decisions following a quarter-point cut to 6.5pc on 7 May — the last cut in a cycle that reduced the benchmark 450 basis points from a cyclical high of 11.25pc in March 2024. The board's 3-2 decision to lower the rate diverged from analysts' consensus, with only six of 36 respondents in Citi Research's 4 November analyst survey predicting the cut, whereas the median forecast was for a quarter point hike in September 2027. The bank statement noted inflation sped to 3.62pc in mid-October from 3.42pc a month earlier, the roughly 10pc depreciation of the Mexican peso against the dollar since September and 3.2pc GDP growth in the third quarter — its strongest performance in three years. "Environmental factors aside, nevertheless," said Banxico, "economic slack is still expected to persist throughout the forecast horizon along with downward risks to economic activity." The bank countered peso depreciation concerns by noting that under prevailing slack conditions, the pass-through of exchange rate fluctuations to consumer prices would be limited. The policy statement said members perceive "no demand-side pressures in the Mexican economy" at this time, and that maintaining the target interest rate at 6.25pc "will support the convergence of inflation to its [3pc] target", still expected to occur in the fourth quarter of 2027. Thursday's statement retained language from the 24 September decision concerning uncertainty in the Middle East and potential shifts in US economic and trade policies, but assured the current monetary policy level will "be adequate to face the challenges posed by the external macroeconomic environment." Mexican bank Banorte, in a note, said the statement "shifted toward a more neutral stance following the cut," due to Banxico's implication that no further cuts are expected. And in addition to reducing its end-2026 forecast for the benchmark to the current 6.25pc, Banorte now anticipates two quarter-point hikes in the second half of 2027, bringing the rate to 6.75pc. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

US blue wave renews prospect of Canada tariff relief

05/11/26

US blue wave renews prospect of Canada tariff relief

Houston, 5 November (Argus) — The Democrats' recapturing the majorities in the US House of Representatives and the Senate in the midterm elections on 3 November has raised market participants' expectations of a trade deal with Canada that could include tariff relief on aluminum imports. A carve-out for top primary aluminum supplier Canada could trigger a reduction in the Midwest premium, which has reached unprecedented heights as a result of tariffs and caused price disruptions in upstream and downstream markets. The Midwest premium, which encompasses all associated costs to deliver primary aluminum into the US Midwest, surged by 406pc from the start of 2025 to an all-time high of $1.19/lb in late May of this year before sliding back to $1.12/lb as of 4 November, according to Argus data. While ex-China supply risks from the US-Iran war accelerated the increase, tariffs have been the driving factor. Any US-Canada trade deal would remain up to the discretion of US president Donald Trump, who unilaterally enacted the 50pc import tariffs under section 232 authority of the 1974 Trade Act. While a Democrat-controlled Congress cannot supersede Trump in revoking the punitive duties, it could exert pressure on the White House to come to the negotiation table and ease trade tensions between the countries. Market participants said any decrease in the Midwest premium as a result of trade negotiations would likely be measured, through gradual declines over the course of weeks to months rather than through sharp, successive reductions. Even if negotiations brought some relief to tariffs that might not take the form of an instant cessation. And even if the tariff on Canadian material is reduced, the premium will retain strong support from tariff impacts on aluminum from other origins, altered trade flows and tighter global supply. The US remains overwhelmingly dependent on primary aluminum imports, which account for more than 80pc of domestic consumption, according to industry estimates. Canada, which accounted for 74pc of US imports from 2020-24, now comprises just 62pc of shipments into the US as Canadian smelters have begun to divert more metal to Europe because of the tariffs. Aluminum buyers and sellers got a preview of how the market potentially would react to a US-Canada trade deal in late August, when Trump floated an agreement that could have included a 25pc tariff-rate cut. Activity in upstream markets came to a standstill, while scrap brokers that were unhedged against the Midwest premium adjusted prices immediately to account for the perceived decline. But index-referenced premiums remained relatively steady in the ensuing days, as underlying supply constraints and no firm signals that a deal would come to pass prevented sizeable decreases. Traders have destocked significant amounts of primary aluminum and are hesitant to bring in additional metal out of concern of holding higher-priced inventories if a lower tariff rate for Canada does come to pass. And consumers continue to buy on an as-needed basis to avoid being caught with more expensive stockpiles by year end. Market participants also voiced skepticism about whether a trade deal would last, saying Trump could ultimately change his mind and either throw out an agreement or impose new tariffs through another mechanism at his disposal. By Alex Nicoll and Jenna Baer Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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