Articles on: Metal Prices

A once abandoned U.K. mine with a rich tin mining history may get another shot at resurrection thanks to a Canadian company.

The South Crofty tin mine in Cornwall has been shut down for nearly two decades, but Canada-based Strongbow Exploration is well on its way to reopening the mine still rich in tin.

Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Subscribe to our monthly buying outlook reports!

According to a report from The Telegraph, the South Crofty mine didn’t shut down because its tin bounty depleted — in fact, it shut down because of falling tin prices.

The news source states that if all things go according to plan, the mine could be reopened by 2020. The hope is that the continual recovery of tin prices will buoy the mine’s resurgence.

“It’s going to be a modern mine in the location of an old mine,” Richard Williams, Strongbow Exploration’s chief executive officer, told The Telegraph.

Once operational, the mine could employ as many as 300 individuals, not counting suppliers.

“We know there’s a resource there, we can identify it with new technology and make the project economic,” Peter Wale, its director, told the The Telegraph.

Once it opens again, the South Crofty mine will be one of just several functioning mines in the U.K., joining Wolf Minerals and ICL, the news source stated.

Tin Price Movement in 2017

How will tin and base metals fare in 2017? You can find a more in-depth tin price forecast and outlook in our brand-new Monthly Metal Buying Outlook report.

For a short- and long-term buying strategy with specific price thresholds:

Gold prices rallied during the first three months of 2017 on the heels of the presidential election and a weaker U.S. dollar.

However, gold prices showed some weakness during March and have traded sideways since then, with an average price of $1,250/ounce.

Source: MetalMiner analysis of FastMarkets

Gold prices have not been able to surpass the resistance level of $1,300/ounce, which would ensure the metal retain its bull market status.

In July, however, gold prices increased together with other base metals and commodities.

The U.S. Dollar

The U.S. Dollar weakness in 2017. Source: MetalMiner analysis of TradingEconomics

Gold prices received a lift from a weaker U.S. dollar.

A bearish U.S. dollar contributes to rising gold prices. The U.S. dollar is currently at its lowest level in a year and is close to its support level.

Source: MetalMiner analysis of TradingEconomics

The U.S. dollar could rebound from this support level and recover — or it may continue its sharp downtrend and show weakness. Gold prices could remain supported by a weaker dollar.

Stock markets

The S&P 500 has continued its uptrend since 2016. The index has reached an all-time high. The rising stock market may have kept a lid on gold prices this year.

However, the increase in stock markets has shown low volatility.

Low volatility periods (calm periods) are commonly followed by high volatility periods (storm periods).

We may be in the calm before the storm.

S&P 500. Source: MetalMiner analysis of TradingEconomics

What this means for metal buyers

Gold prices have lost steam and have traded sideways since March (with the exception of July’s bullish move).

A stronger U.S. dollar could drive gold prices down again. The opposite also remains a real possibility.

Buying organizations may want to watch the U.S. dollar closely.

gui yong nian/Adobe Stock

This morning in metals news, steel prices in China are up and the government is looking to strike a balance, German company Thyssenkrupp isn’t in a rush to forge a merger with the European business of India’s Tata Steel and China responds to the U.S. Department of Commerce’s ruling this week regarding Chinese aluminum foil, which the DOC determined was being unfairly subsidized by the government.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Steel Prices On the Way Up in China

Rising steel prices have Beijing looking for ways to adapt, according to a CNBC report.

On the heels of efforts to cut excess Chinese steel production, prices are rising — but the government is looking to strike a balance.

“For Beijing, it’s a tough situation: tackle steel overcapacity, rebalance economic growth, control environmental pollution and also manage market stability — especially in advance of a leadership shuffle due in the fall,” CNBC’s Sophia Yan writes.

No Rush to Merge, Thyssenkrupp CFO Says

Talks of a merger between the European businesses of Thyssenkrupp and India’s Tata Steel have hung around since last year.

They even seemed to get a boost in light of news reported yesterday about Tata’s plans to separate its British pension scheme from its businesses.

Despite that step, Thyssenkrupp CFO Guido Kerkhoff says not so fast.

Kerkhoff told reporters Thursday that while they prefer a “fast solution” in potential merger talks, quality comes first.

China Warns U.S. After DOC’s Aluminum Foil Ruling

Unsurprisingly, the U.S. aluminum industry applauded the Department of Commerce’s preliminary determination Tuesday regarding Chinese aluminum foil.

Also unsurprisingly, China had something to say about it, too.

The Chinese Ministry of Commerce wrote in a statement on its website that the DOC’s claims were “without foundation” and urged the U.S. to “act cautiously and make a fair decision to avoid any negative impact on the normal economic and trade exchanges between China and the U.S.”

On Tuesday, Secretary of Commerce Wilbur Ross announced the findings of the countervailing duties investigation, declaring that Chinese exporters of aluminum foil received countervailing subsidies of 16.56 to 80.97 percent. As a result, the U.S. could impose duties of up to 81 percent on Chinese foil in return.

Free Sample Report: Our Annual Metal Buying Outlook

Meanwhile, the outcome of the Section 232 investigation into aluminum imports, however, remains pending.

An interesting report by Reuters explores the vagaries of supply from Indonesia and the Philippines, the world’s two largest nickel producers — and, unfortunately for the nickel price, it would seem two of the least reliable suppliers.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Source: Reuters

By far and away the most volatile supplier has been the Philippines.

Former Secretary of Environment and Natural Resources Regina Lopez’s mining crusade and resulting export ban last year had a cataclysmic effect on output from which the country has not recovered, despite her replacement in May by Roy Cimatu, Reuters reports.

The latest assessment by the International Nickel Study Group (INSG) notes the country’s nickel production fell by 15% to 101,000 metric tons in the first five months of this year. Shipments of nickel ore to China have also been flowing at a reduced pace. Chinese imports from the Philippines slid by 6% over the first half of the year, according to Reuters.

Indonesia’s supply constraint, on the other hand, was driven by a policy to achieve greater value add in-country, started by a 2014 export ban on unprocessed ore which has only recently seen a partial rollback, as progress has been made in setting up nickel pig iron plants in the country. There are now multiple nickel “smelters” producing nickel pig iron or equivalent intermediate product in Indonesia, Reuters reports, quoting INSG estimates that mined production has surged 89% to 122,000 tons in the January-May period.

Meanwhile, the market has been responding to these political proclamations and about-turns with dramatic changes in short and long positions.

Reuters quotes LME Commitment of Traders figures to support price movements and investor position taking. The 18% nickel price rally over the last month to $10,445, a five-month high, followed investors flocking back to the market driving net long positions to 32,363 lots, compared with a net short of 887 lots on May 15. The return to the market seems to have been on the back of the nickel price’s fall to a year’s low of $8,680 and the widespread belief — supported by the closure of half of Indonesia’s processing plants — that refining becomes uneconomic below a nickel price of $9,000 per metric ton.

If $9,000 is the price floor based on current technology, what is the upside, stainless consumers will be asking?

In part, that depends on the potential for constraints to supply.

Demand remains solid. Reuters states Chinese imports of Indonesian “ferronickel” (nickel pig iron) broke through the 100,000-ton barrier in May and stayed there in June, while cumulative imports in those two months were 270,000 tons (bulk weight), exceeding total imports in 2015.

Demand, therefore, remains solid, but so too does supply. Netted between them, the two countries produced 223,000 tons of nickel in the first half of this year, up from 184,000 tons in the  same  period of 2016, according to the INSG. China’s imports of nickel raw materials, ore and concentrates, were also up in the first half of this year by 4% (not counting the separate flow of Indonesian ferronickel).

Free Sample Report: Our Annual Metal Buying Outlook

Providing Cimatu continues with his conciliatory approach to miners, the market is likely to conclude exports are going to continue. The market has a floor at $9,000 per ton, but according to Reuters it could also be capped by rising supply as both countries ease restrictions and supply remains adequate.

Here’s What Happened

  • MetalMiner’s Global Precious MMI rose 2.4% to a value of 85, breaking into a new high for 2017.
  • Our sub-index tracking gold, silver, platinum and palladium prices from around the globe last hit this level in October 2016, when it reached a value of 86.
  • That makes two straight Augusts (2016 and 2017) of strong performance for precious metals. After a lackadaisical second half of 2015 and first half of 2016, the Global Precious MMI hit a scorching 89 in August 2016 — the index’s highest peak since February 2015.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

What’s Going On in the Background?

  • Since we tend to keep a closer eye on the platinum group metals (PGMs) due to their automotive applications, the U.S. platinum price tracked by the MetalMiner IndX ticked back up 2.3%, while the U.S. palladium price continued steamrolling, rising 3.4% on the month.
  • These PGM prices increases, in addition to marginal upticks for gold and silver in the U.S., are the main drivers of the index’s gain.
  • As we reported in June, platinum companies continue to battle for profitability — one such firm being South Africa’s Lonmin. After the company reopened shafts and expanded its biggest operation a couple months ago, it’s now planning to sell excess processing capacity “of up to 500,000 platinum ounces per year, to maximize cash from processing operations and preserve cash,” according to Reuters. The tough economic environment in South Africa, as well as inflationary pressures on platinum mining in general, are to blame.

What Metal Buyers Should Look Out For

  • Certainly keep an eye on the global automotive sector, which has been motoring along lately in China especially, as the longer-term driver (HA!) here.
  • Certain rosy outlooks from firms such as Research and Markets indicate a bullishness that refuses to let up on the gas (it’s August, y’all, we’re getting those all out of our system before the fall revs up — see?!). According to my colleague Fouad Egbaria’s coverage, “advances in automobile technology and pharmaceutical applications will see a rise in demand for this subset of metals, according to the research report.”
  • The dog days of summer have shown life with a last gasp, perhaps setting the stage for a continued rise into autumn, especially if political turmoil gets any worse and any looming stock market corrections set the tone.

Free Sample Report: Our Annual Metal Buying Outlook

Key Price Movers and Shakers

    For full access to this MetalMiner membership content:
    Log In |

The Renewables MMI jumped 6.9% to 77 for our August reading, as prices jumped for nearly every metal in the renewables basket sub-index.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Of eight metals listed in this sub-index, seven posted price jumps last month. Steel plate from Japan, Korea, China and the U.S. jumped up, as did Chinese neodymium, silicon and cobalt.

The lone metal to fall this past month was U.S. grain-oriented electrical steel (GOES) coil, which fell  2.8%.

It was a much stronger July for this basket of metals than June was, when only four of the seven metals moved up in price (Chinese steel plate, neodymium, cobalt cathodes and silicon).

Cobalt Prices Have Asian Battery Makers Looking Elsewhere

As mentioned earlier this week, Reuters reported rising cobalt prices have forced battery makers in Asia to consider alternatives — namely, nickel.

According to the report, makers of lithium-ion batteries are looking to add more nickel to their battery formulas instead of the increasingly costly cobalt.

As the report notes, electric vehicle demand is set to grow significantly in the coming years. As such, automakers will be looking to cut their production costs. According to Reuters, the price of cobalt has doubled over the last year, a product of high demand and supply shortage.

Political Instability, Violence in Congo

Speaking of supply, most of the world’s cobalt is mined in the Democratic Republic of Congo, according to the United States Geological Survey (USGS). According to USGS data, an estimated 66,000 metric tons of cobalt were mined in Congo in 2016 — or 54% of the 123,000 metric tons mined worldwide. China came in second last year of cobalt mined (7,700 metric tons), followed by Canada (7,300 metric tons).

However, the unstable political situation in Congo could continue to affect supply, making the metal even pricier. Political unrest recently led to a wave of bloodshed in the country, sparking fear of a return to the civil wars of the 1990s, The Guardian reported.

This is all without even getting to the ethical concerns present in the Congolese cobalt mining world. As noted by numerous media reports, significant chunks of mining revenue tend to go missing via corruption linked to President Joseph Kabila. All in all, the rising demand in cobalt has not benefited the Congolese people. A 2015 IMF report showed the country was experiencing significant economic growth, but poverty reduction lagged behind.

On top of all this, the conditions for Congolese cobalt miners add another ethical concern to the mix, one which big multinational brands will have to answer to with respect to their supply chains. For example, a Sky News report revealed workers as young as 4 working in the Congolese cobalt mines in deplorable conditions.

Free Sample Report: Our Annual Metal Buying Outlook

While the status of cobalt on the marketplace is obviously not the most important takeaway from the grim situation in the DRC, cobalt production has fallen this year amid the unrest, The Guardian reported, leading to a 90% rise in the price of the metal and a peak of $61,000/ton in July.

Actual Metal Prices and Trends

For full access to this MetalMiner membership content:
Log In |

TTstudio/Adobe Stock

Copper prices are on the ascent, thanks in part to the latest Chinese trade data and genuine excitement among investors over worldwide growth and capacity cuts.

According to a recent report from The Wall Street Journal, China’s debt crackdown earlier this year led to an adverse effect on metal prices and general worry from investors.

That worry has turned to elation, with copper prices up 7% due to capacity cuts in China. Meanwhile, iron ore prices are up more than 20% since the end of June.

Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Subscribe to our monthly buying outlook reports!

The most recent Chinese trade data, representing July, painted a different picture with year-over-year growth of Chinese imports of copper concentrate slowing from June’s growth.

Nathaniel Taplin wrote for the Wall Street Journal: “Overall import and export growth also slowed, hinting that the lift to China from rebounding global trade may be close to its peak.”

The takeaway for copper investors impressed with Q2 Chinese growth? Not to get too excited until the whole story is revealed as China’s demand for metals, specifically copper, is weaker than expected.

Copper Prices Still Experiencing a Stellar 2017

Our own Irene Martinez Canorea wrote earlier this week that copper is outperforming all other base metals this month with copper traded on the London Metal Exchange up 7.8% in July.

She wrote: “The sharp increase in copper prices came after an announcement of a possible ban of copper scrap in China by the end of the year. The increase in copper prices was accompanied by heavy volume, which may signal a stronger uptrend.”

How will copper and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand-new Monthly Metal Buying Outlook report.

For a short- and long-term buying strategy with specific price thresholds:

Global trade developments with a dose of healthy demand appear to be setting the stage for grain-oriented electrical steel (GOES) price movements for H2.

Although the big story in the U.S. involves Section 232 developments, GOES prices globally are increasing because of several measures in both China and Europe.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

According to a recent TEX Report, Japanese mills received a $100/metric ton increase for GOES shipments to India and Southeast Asia. And, because of an anti-dumping order in China, Baoshan has raised its prices six times this year.

Curiously, the European Union implemented a system by which a “price floor” has been established for GOES. This price, according to TEX Report, is higher than the international GOES price. Europe can expect to see higher-priced imports as a result.

Meanwhile, the U.S. Department of Commerce has not released any recommendations on the Section 232 investigation. Although GOES producer AK Steel — along with other steel producers —  has lobbied hard for some sort of import curb, the fact that no recommendations have been made suggests the DOC acknowledges that the Section 232 investigation contains a number of complexities across a broad range of stakeholders that have all weighed in on the findings.

The Section 232 investigation, to some extent, has slowed down annual negotiating cycles for manufacturing organizations, as several recently told MetalMiner at our 2018 Budgeting and Forecasting workshop.

Producers had likely hoped for the release of the findings to take their price cues. MetalMiner believes that without the release of the report, producers will start considering 2018 contracts in September, similar to normal annual contract cycles.

Free Sample Report: Our Annual Metal Buying Outlook

Exact GOES Coil Price This Month

For full access to this MetalMiner membership content:
Log In |

China’s continued regulation of its bloated aluminum industry is having a far-reaching impact on the growing share price of its major producers, thus adding to a tighter global market and rising prices.

According to a recent report from Reuters, China represents nearly 60% of worldwide aluminum output with analysts estimating up to 4 million tons of capacity closing this year, accounting for one-tenth of the Far East nation’s total, putting added pressure on the global aluminum market.

Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Subscribe to our monthly buying outlook reports!

Aluminum Corp of China (Chalco) shares, a state-run entity, increased 47% since the start of last month.

“Chalco is the market leader, so if (competitors) are closing down their capacity, they are able to expand their production,” analyst Helen Lau, of Argonaut Securities in Hong Kong, told Reuters.

Aluminum Prices on the Run

While aluminum prices are on the rise, they may have further to go, analysts tell Reuters. Shanghai aluminum is up around 11% so far this year while benchmark aluminum on the London Metal Exchange is up 14%.

“The trend is definitely towards a much tighter market balance – there is an upshot to prices here definitely,” London-based WoodMackenzie analyst Ami Shivka, told Reuters. “The China market is in a surplus so any closures in China will whittle away the little bit of surplus that we have in China, and put the global market in a deficit.”

How will aluminum and base metals fare in 2017? You can find a more in-depth aluminum price forecast and outlook in our brand-new Monthly Metal Buying Outlook report.

For a short- and long-term buying strategy with specific price thresholds:

The U.S. Department of Commerce. qingwa/Adobe Stock

This morning in metals news, the still-pending Section 232 investigations into steel and aluminum imports, raw steel production is up 2.7% in the U.S. year-over-year and aluminum has reached its highest point in 2.5 years.

Uncertainty Growing in Aluminum Market

It’s not exactly surprising that some in the aluminum and steel industries are feeling anxious about the Section 232 investigations, still unresolved, initiated by the Trump administration in April.

According to a report in Platts, that’s exactly how some are feeling on the aluminum side. Not only that, the uncertainty is making what was already considered a volatile aluminum market even more volatile.

Another potential consequence of the investigation? The cost of downstream products could go up, according to industry sources cited by Platts.

Raw Steel Production Down From Previous Week, Up For the Year

The American Iron and Steel Institute released its weekly raw steel production data on Monday, and the numbers are both up and down.

For the week ending Aug. 5, production was down 0.4% from the previous week ending July 29. Production for the week ending Aug. 5 amounted to 1,762,000 tons.

Production for the year to date, however, was up 2.7%, with 53,870,000 tons produced through Aug. 5 this year.

Aluminum Heats Up

The durable metal reached a 2.5-year high Tuesday on news of Chinese supply cuts and signs of strong Chinese demand, Reuters reported.

According to the report, 3.21 million tons of production will be shut down in China’s Shandong province.

LME aluminum eclipsed the $2,000/ton mark on Tuesday, reaching as high as $2,007 — the highest since December 2014, according to Reuters.