Articles on: Metal Prices

Windsor/Adobe Stock

This morning in metals news, the world’s top copper producer expects a moderate rise in the metal’s price going forward, the Aluminum Association announces new leadership and Kobe Steel continues to reel from its data falsification scandal.

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

Copper on the Rise

The price of copper is set to experience moderate increases, according to the mining minister of Chile, Reuters reported.

Aurora Williams, the mining minister of Chile (the world’s top copper producer), said Wednesday that there will be moderate increases in the metal’s price, but not enough to push it above $3/pound for the year.

According to the Reuters report, copper exports reached $3.18 billion in September, their highest level in nearly three years.

Changing of the Guard

The Aluminum Association announced new leadership on Wednesday.

Michelle O’Neill, senior vice president of senior vice president of global government affairs and sustainability at Alcoa, was elected as Aluminum Association Chair, becoming the first woman in the association’s 84-year history to hold the position. She replaced Garney Scott, president and CEO of Scepter, Inc., following a two-year term.

Kobe Steel Data Scandal Continues

It’s difficult to quantify lost trust, but it’s a problem Kobe Steel, Japan’s third-biggest steelmaker, is dealing with now on the heels of a data falsification scandal.

Now, the chief executive of the company is admitting the scandal is a serious hit on the company’s image, one that leaves it with “zero credibility,” The Guardian reported.

Free Sample Report: Our Annual Metal Buying Outlook

According to The Guardian’s report, General Motors is the latest manufacturer to check whether its cars contain falsely certified parts or components sourced from Kobe Steel.

There are reasons why miners — indeed, all producers across industries — seek to dominate market share.

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

The biggest reason? Being able to influence the market.

Yes, economies of scale come with size and in the case of mines to metal integrated trader Glencore that dominance in the zinc market gives them influence over not just mine output but concentrates, tolling and refining in a way that is not rivaled by any other firm.

Nor is the firm too kind to do things by halves — when they decide on an acquisition, on a market move, on a position, they do it decisively and with conviction.

In October 2015, Glencore sent shock waves through the market by cutting a third of its output, some half a million tons, to address what was widely seen as an oversupplied market and to stabilize prices. It worked — in just two years, the price has risen from $2,000/ton at the start of 2015 to $3,300/ton today.

LME zinc price, from October 2015 to October 2017. Source: LME

A Financial Times article states Glencore’s Australian Mount Isa and McArthur River operations took the brunt of the 2015 supply cuts, with output reduced by 380,000 tons. In total, the Glencore shutdowns removed 3.5% of global mine production, as the miner curtailed output from mines in Australia, Peru and Kazakhstan. In the meantime, end-of-life closures at Century in Australia and Lisheen in Ireland helped tighten the market.

Arguably Glenore’s action, while painful for zinc consumers, have in the long run done the zinc market a favor.

The rise in prices has supported the case for investment in new mines, such as Gamsberg and Duglad, due to come online towards the end of the decade. But even miners recognize you can have too much of a good thing, and limiting further price rises would not only help consumers but would help mitigate the demand destruction that comes from prices rising too fast and too far.

With that in mind, will Glencore look to bring back some, or all, of its idled capacity in 2018?

The firm continues to bet big on zinc, announcing last week its plans to increase its stake in Peru’s Volcan Cia Minera SAA, Bloomberg reports. With new mines due to come on stream in 2019 and 2020, supply constraints to the zinc market will eventually ease somewhat. Doubts remain, however, whether they will be enough to see the market in surplus.

Deshnee Naidoo, chief executive officer of Vedanta’s zinc unit, said a more sustainable zinc price would be $2,500-2,800 per metric ton. Others may argue with her, but Glencore has shown it can move markets and has the means — like Saudi Arabia did in the 1990s and 2000s with oil — be the swing producer, stabilizing a market for the benefit of both producers and consumers.

Traders often get a bad press for short-termism and the blind pursuit of profit, but Glencore has shown it acts in the longer term, too, and is capable of taking a strategic view of the market, of taking short-term losses in the pursuit of longer-term gains. The firm is uniquely positioned in the zinc market to act as a benign stabilizing element, keeping prices at a profitable but not demand-destructive level.

Free Sample Report: Our Annual Metal Buying Outlook

It is clearly not as simple to regulate mine supply as it was oil supply for Saudi Arabia. You cannot turn off a mine like you can the spigot of a pump.

But with so many diverse zinc resources, Glencore is in a better position that any to smooth out the dips and peaks, for the sake of its shareholders and for the market as a whole.

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

Here’s What Happened

  • MetalMiner’s Global Precious MMI, tracking a basket of precious metals from across the globe, cooled off considerably after a sharp rise last month. For October, the sub-index dropped 3.4% to hit 86. That’s nearly back to the August 2017 level.
  • Palladium held steady for a month, but still continues a measurable march upwards. The platinum group metal held above the $900 per ounce level for the second straight month.
  • Platinum did lose a bit of its luster, however, falling back toward the $900 per ounce level and receding from its most recent high of March 2017 (when it landed above $1,000 per ounce). What does that mean? Something quite historic (see the section below)
  • After breaking and holding above the $1,300 per ounce threshold at the beginning of September for the first time since October 2016, the U.S. gold price retraced its steps as well, diving back under that level for the beginning of October.

What’s Going On in the Background?

  • We have quite the record to report. ICYMI, my colleague Fouad Egbaria noted recently that the platinum-palladium relationship reached a milestone: “As of Oct. 1, palladium closed higher than platinum. The last time that happened? Sixteen years ago.”
  • According to a research note from commodities broker SP Angel quoted within a report by Kitco News, “Palladium is benefitting from its inclusion in catalytic converters in gasoline-powered vehicles, which is expecting robust growth from the shift from diesel engines following the 2015 Volkswagen emissions-rigging scandal, and hybrid electric vehicle demand.”

What Metal Buyers Should Look Out For

  • Other analysts have thoughts on platinum/palladium outlook as well. “In the short term, we think platinum is undervalued for a whole host of reasons. Therefore, we think there is scope for platinum to move back to a slight premium in the short to medium term,” Robin Bhar, metals analyst at Societe Generale, was quoted as saying in the Kitco News report. “We don’t see a sustainable premium of palladium over platinum…until about 2020 or 2021.”
  • Overall, however, investors have been seeing nice returns, according to International Banker. The article notes a Reuters poll “of 26 analysts and traders conducted in July, [in which] the average palladium price for 2017 [was] being predicted at $811 per ounce for this year, which is 5 percent above the previous poll conducted in April…[and] the highest annual average price on record, going back three decades.” Well, now we’ve broken $900 per ounce.
  • That makes Standard Chartered rosy as well. “We remain constructive on palladium’s outlook,” according to the bank’s analyst, Suki Cooper. “Not only is the market set to deliver a deficit this year, but it looks set to be undersupplied over the coming years.”

Free Sample Report: Our Annual Metal Buying Outlook

Key Price Movers and Shakers

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

The October GOES M3 moved up by one point to 194. Meanwhile, as MetalMiner reported last month, imports have increased throughout 2017, largely due to higher Japanese import levels.

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

This trend continued in September with a noted overall import increase of nearly 11.5% from August import levels while Japanese import levels increased by nearly 18%, according to the latest International Trade Administration data.

Last month, this publication noted that Japanese imports accounted for 55% of total monthly GOES imports. However, this number jumped in September to nearly 70% of total imports. Japanese mills primarily produce the higher grades of grain oriented electrical steel, including H1-B, as well as laser quality materials.

According to a recent TEX Report, Japanese mills will likely begin negotiations within the next week or two for 1H 2018 volumes. Many producers of these H1-B and laser quality materials have obtained price increases but at the same time, the price spread between conventional grades and high-grades has increased.

Whenever the market creates a spread wider than the historical average, buying (and selling) organizations can take advantage of arbitrage opportunities. Though we tend to see these types of trends more typically in other steel markets, such as hot-rolled coil or cold-rolled coil, market anomalies for GOES create buying opportunities.

Therefore, we could expect the Japanese mills to pay very careful attention to price levels so as not to exacerbate the current price spread between the two types of materials and to prevent buying organizations from considering alternatives.

From a U.S. import perspective, we can see that average prices from Japan have increased to the U.S.

Source: International Trade Administration

When ATI left the GOES market here in the U.S., the industry needed to reconfigure its supply chains for standard or conventional materials. Power equipment manufacturers moved production elsewhere and/or secured new sources of supply offshore.

Clearly, the demand for high-grade materials continues to rise.

Free Sample Report: Our Annual Metal Buying Outlook

Exact GOES Coil Price This Month

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

The Stainless Steel MMI dropped four points this month for an October reading of 63. The drop was driven by decreasing LME nickel prices, together with Chinese and Indian stainless steel prices trending downward.

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

However, stainless steel surcharges have increased this month. Buyers of stainless steel will see a new graphite surcharge starting in November. Outokumpu announced this new surcharge first and AK Steel shortly followed suit, explaining that production costs have risen. We expect to see other stainless mills announce similar surcharges.

This surcharge, a graphite electrode surcharge, came as a result of tighter global supply of graphite used in electrodes in the electric arc furnace (EAF) steelmaking process.

How is Graphite Used in the Steel Industry?

To better understand the impact this surcharge may have on stainless steel prices, let’s examine how graphite is used in the steelmaking process.

Graphite is a polymer of carbon that is used in the steel industry to produce steel (both stainless and carbon steel). Due to its heat and electric properties, graphite serves as the main component of the electrode, also known as a consumable. EAF production methods require the use of graphite electrodes, which require replacement every 8-10 hours.

Source: Industrial Efficiency Technology Database

Graphite prices, like other opaque markets, come as a result of direct negotiations between buyers and sellers.

Both the flake size and purity (large +80 mesh and XL flake +50 mesh) drive the negotiation process. Graphite prices have increased by 25-30% in the last couple of months on the back of improving steel demand. Prices are currently at $1,100/ton, still well below the 2012 peak of $2,800/ton.

Source: Northern Graphite pricing

Supply and Demand

China produces 70-80% of the world’s graphite supply; thus, the world depends, like it does for many metals, on China.

Back in the 1990s, China dumped graphite on the market to earn foreign exchange, which caused  graphite prices to decline.

Chinese mines remain small and seasonal, which means production appears lumpy and, in some cases, not guaranteed throughout the year.

However, recent environmental policies have impacted graphite mines.

This modernization and consolidation of the mining industry has translated to increased costs and lower production, caused by the closure of illegal miners and the elimination of marginal producers.

Moreover, China has imposed a 20% export duty on graphite and a 17% VAT to help protect its own industry. This has created supply concerns all over the world.

Both the European Union and the United States have declared graphite a strategic material. Furthermore, Hurricane Harvey impacted the domestic supply of needle coke (the primary raw material used to make graphite electrodes). This led to the  an increase in graphite electrodes spot prices up to seven times the previous contracted price.

In terms of demand, growth for flake graphite increased by 7.5% each year from 2004-2011. The steel industries rely on the flake graphite and therefore saw a price lift from increased steel demand. Graphite prices peaked in 2012, then fell for the next five years until 2017.


Recently, graphite demand increased again due to battery demand (such as lithium ion batteries or vanadium redox batteries, among others).

In fact, graphite demand from lithium ion batteries has grown in six years from essentially nothing to around 130,000 tons per annum, which represents about 30% of the flake market. This battery demand will also support rising graphite demand (and prices).

What is Behind the New Surcharge?

The introduction of a new surcharge for stainless steel came as a surprise to MetalMiner.

Even an increase in graphite prices doesn’t explain the new surcharge, since prices in 2012 were much higher than they are now.

Here are the relevant questions to ask when considering the new surcharge:

  • What percent cost of an electrode is the graphite content? And what is the cost of that graphite per metric ton of steel produced?
  • What percent of the total cost to produce one metric ton of steel does the electrode represent?
  • How does the new surcharge reflect the actual underlying increased costs to produce steel?

To answer the first part of the first question — what percent cost of an electrode stems from the graphite content — we examined data from Graftech, the largest graphite electrode producer. We discovered the following cost breakdown to produce an electrode:

Source: Graftech

Please note the 44% coke represents the graphite portion of the electrode. So, the answer to our question is 44% — that is, the graphite content is 44% of the electrode cost structure.

Now, when we consider the average consumption of graphite in the steelmaking process and the current average price of graphite, we can create a back-of-the-napkin model of the cost of graphite per metric ton of steel produced:

Source: ENTEC. EU Emissions Trading Scheme (ETS)

The average amount of graphite consumed in electrodes on a per-metric-ton basis ranges between 1-5 kg/mt of steel. Our model, therefore, uses an average consumption of 2.5 kg/mt steel for purposes of this cost build-up. The total cost of the graphite per metric ton of steel is $2.75.

Now we need to address the second question: how much of the total cost to produce one metric ton of steel do electrodes represent?

The answer, according to the table below, is $43.22/mt — or 9% of the total cost.


So, Does the Surcharge Amount Make Sense?

Outokumpu published an electrode surcharge at 30 Euro/mt. Our “should-cost” model results in quite a different number.

Perhaps a bold buying organization will take this into their next mill negotiation to have the mill explain its model in detail.

Are we missing something? Drop us a line at 

Actual Stainless Steel Prices and Trends

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

Have you set your 2018 metals budget?

Make sure your purchasing strategy is sound with MetalMiner’s free 2018 Annual Metals Outlook!

Arriving just in time for budgeting season, this report contains the unique insight, analysis and tools you need as a metal buyer or manufacturer to know when and how to make the buying decision – including expected average prices, support and resistance levels.

This free, downloadable PDF is one of MetalMiner’s most valuable pieces of content and includes coverage of commodities markets, industrial metals markets and key price drivers for aluminum, copper, nickel, lead, zinc, tin and steel (HRC, CRC, HDG, Plate).

By understanding these price drivers, you can pinpoint exact price levels and make the appropriate changes to your sourcing strategy for that particular metal. You will be also be able to react when the market gives clear signs that a new trend is developing, and stay hedged as long as that trend lasts.

The Annual Outlook Report continues to examine three variables which have underpinned metal markets for the past two years:

  • Demand from China (and China’s overall economic outlook)
  • The strength of the U.S. Dollar
  • Oil prices and trends

While the 2018 Annual Metals Outlook report is free of charge, we do recommend you pair it with a subscription to our Monthly Metal Buying Outlook report in order to get the most valuable, up-to-date information and analysis of market conditions.

Download your report today!

This morning in metals news, the Environmental Protection Agency (EPA) announced it will take steps to repeal the Obama-era Clean Power Plan, copper hit a four-week high and two Russian tycoons are selling a 3% stake in aluminum giant Rusal.

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

Obama Initiative to Curb Emissions to be Rolled Back: EPA

The EPA announced Monday that it would begin to take steps to roll back the Obama-era Clean Power Plan, which sought to bring down emissions from power plants, The New York Times reported.

While constituting a loss for the environment, the measure marks a win for industry. (For a review of the costs associated with the plan, our Taras Berezowsky delved into the issue in this 2015 post.)

Scott Pruitt, head of the EPA, made the announcement in Kentucky yesterday.

“The war on coal is over,” Pruitt said, as quoted by The New York Times. “Tomorrow in Washington, D.C., I will be signing a proposed rule to roll back the Clean Power Plan. No better place to make that announcement than Hazard, Ky.”

The repeal proposal will be filed with the Federal Register today. The EPA announced its launch of a review of the plan on April 4.

Copper Bounces Back

After a cooling down in September, copper has hit a four-week high, Reuters reported.

The uptick comes as a function of expected supply shortages in China, according to the report.

Rusal Stake to Be Sold Off

Russian tycoons Mikhail Prokhorov (who also owns the NBA’s Brooklyn Nets) and Viktor Vekselberg are selling a 3% stake in aluminum giant Rusal, Reuters reported.

Free Sample Report: Our Annual Metal Buying Outlook

The value of the 3% stake is worth $341 million based on Rusal’s closing price Tuesday, Reuters reported.

The Renewables MMI saw a one-point drop for the month, as a number of the metals in the basket trended slightly downward.

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

Among the metals dropping throughout the month, Japanese and Chinese steel plate fell. U.S. steel plate dropped as well, falling back 1.1%. U.S. GOES coil also posted a small drop.

Korean steel plate, however, posted a solid increase.

In rare and minor metals, Chinese neodymium fell 4.3%. Chinese silicon also fell, as did cobalt (both by 1.0%).

Rising Renewables

The growth of renewable energy is undeniable — the question continues to be not “if,” but “when.”

Renewable energy is expected to grow significantly in the coming five years.

According to the International Energy Agency, renewable electricity will grow from 23% in 2015 to 30% in 2022. Renewable heat, meanwhile, will rise to 11% from 9%, and biofuels in road transport will grow by a percentage point to 5%.

Pushing Forward

Already, the public and private sectors are being transformed by a push for cleaner energy.

From the government side, a number of nations have made pledges to phase out or eliminate vehicles powered by fossil fuels. The U.K. and France have set a 2040 target date for that goal, while India has set an even more ambitious goal of 2030 (our Sohrab Darabshaw wrote about that last Monday).

As the largest automotive market in the world, China’s recent announcement that it too would consider pursuing similar goals could have a serious impact on the drive toward electric vehicles (EVs), as our Stuart Burns expanded upon last month.

The Courier Mail reported late last month on an energy revolution happening in Queensland, Australia, where farming fields are making way for solar energy stations, in addition to wind farms and pumped storage projects.

According to the report, there were 17 projects under construction that will collectively see $2.3 billion invested (as of the end of June of this year). Now, investment is just investment — those projects, and others like them around the world, have to prove viable for that investment to mean anything. With that said, innovation and implementation can’t happen without investment in the first place, so it’s a good sign for the industry that money is being put into its development (even if it might not have big short-term returns).

Elsewhere, Platts reported on the rise of renewable electricity in the European Union. For example, prices for wind energy have fallen dramatically as competition has intensified — by 50% compared with the previous two years, Platts reported.

The green wave isn’t coming — it’s already here.

China’s Green Goals

China’s recent announcement regarding its own green-energy ambitions has significant implications for the global energy scene, particularly the automotive market. As the world’s largest automotive market, China’s governmental directives have a powerful hand in directing a large share of global demand.

So, by announcing intentions to possibly put a ban on gas and diesel vehicles — as a way to alleviate pollution throughout China — the competition within the EVs industry will further intensify.

As with capacity cuts to production of aluminum and steel, however, many around the world will be taking a wait-and-see approach with respect to Beijing’s recent announcement. Whether China’s words on this matter will translate into action remains to be seen, and a concrete timetable for implementation of this new plan hasn’t been announced yet.

But catering to that forthcoming demand is already underway. As The Guardian reported, Volvo will introduce its first all-electric vehicle in China in 2019.

Free Sample Report: Our Annual Metal Buying Outlook

Actual Metal Prices and Trends

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

The Rare Earths MMI dropped two points for our October reading, falling from 24 to 22.

The heavier hitters in this basket of metals — which is dominated by China — posted price drops.

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

Yttrium, terbium oxide, terbium metal, neodymium oxide, europium oxide and dysprosium oxide all fell on the month.

Supply Squeeze

The rare earths sector is already a volatile market — they are rare materials, after all — but Chinese efforts to curb illegal mining have also introduced a supply-side effect on those prices.

China, which overwhelming dominates the global rare earths market, has worked to cut down on supply, which has had a supporting effect on prices.

According to the Nikkei Asian Review, neodymium hovered around $95 per kilogram as of mid-September, a 90% increase from a year earlier and up 80% from the start of the year. Terbium was around $600, up 36% from November last year.

Rare earths, which are used in things like cellphones and computers, are also needed for the production of electric vehicles (EVs). As demand grows for EVs, so too will demand for rare earths. This drive comes governments around the world have set long-terms goals to phase out vehicles powered by fossil fuels, with Beijing’s recent announcement about its own goals potentially presenting a significant impact on the global automotive and energy sectors.

Rare Earths and EVs

Speaking of EVs, one rare earth miner hope to play a big role in their rise.

Martin Eales, chief executive of Rainbow Rare Earths, said the mining company hopes to start producing concentrate by January in Burundi, according to a report in The Telegraph last week.

The company is counting on the rise of EVs to fuel demand for metals like neodymium and praseodymium, which the company mines, according to the report.

Coal Mines to ‘Gold’ Mines

Elsewhere, some are pondering the role old coal mines might have to play in the mining of rare earths.

U.S. Energy Secretary Rick Perry, during a visit to a Pennsylvania mine, talked about anthracite coal as a source for rare earth materials, according to a report by the Pittsburgh Post-Gazette.

As the article states, if researchers can find a way to extract the rare earths contained in the waste rock of coal mines like the one Perry visited, that could be a veritable gold mine — pun intended — for the industry.

Furthermore, if U.S. coal mines can be effectively repurposed in this way, China’s dominance of the rare earths market could possibly be challenged, to an extent.

Actual Metal Prices and Trends

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

gui yong nian/Adobe Stock

This morning in metals news, a Japanese steelmaker is mired in scandal after admitting to falsifying inspection data, copper exports by Sicomines have been halted by the Congolese government and Shanghai zinc hits a 9 1/2-year high.

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

Kobe Steel Hit by Scandal

The third-largest steelmaker in Japan, Kobe Steel, admitted to falsifying inspection data, according to the Financial Times.

The falsified data was for about 20,000 tons of metals used in aircraft and automobiles.

Copper Exports Halted for Sicomines

Export of copper by Sicomines in the Congo have been halted by the Congolese government, according to a Bloomberg report.

The Congolese government order Sinohydro Corp. and China Railway Construction Corp.’s local mining venture to stop exporting unprocessed copper and instead exporting “high-value products.”

Shanghai Zinc Hits 9.5-Year High

Zinc on the Shanghai Futures Exchange jumped 4% on Monday, reaching its highest point in 9 1/2 years, according to Reuters.

Free Sample Report: Our Annual Metal Buying Outlook

According to Reuters, the metal rose on both supply concerns and “expectations for improved liquidity in markets in China.”