Copper

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This afternoon in metals news, black cabs in London will be moving toward electric power, production of copper and steel is up in Kazakhstan, and Dr. Copper appears to be backsliding after its previously torrid pace.

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Electric Cabs?

Further adding momentum to the electric vehicle industry, black cabs in London will soon be powered by electricity.

Sapa SA’s aluminum plant in Wales will reopen this week and supply parts for automakers like London Electric Vehicle Co., the maker of black cabs, Bloomberg reported.

The move is part of the overall comeback for aluminum, which works in tandem with the rise of the electric vehicle, particularly the U.K.’s effort to phase out vehicles powered by fossil fuels by 2040.

Copper, Steel Output Up in Kazakhstan

Cooper and steel production have surged in Kazakhstan through the first seven months of the year, according to a Reuters report.

For January-August, copper production is up 5.5% and crude steel production is up 9.7% in Kazakhstan, according to Statistics Committee data.

Copper Price Begins to Slide

The metal often referred to as “Dr. Copper” boasted a healthy diagnosis as late as last month, when the metal hit a three-year high.

But political tensions on the Korean peninsula, among other things, have seen the metal’s price begin to backslide.

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The copper price has dipped 6% since Sept. 8, when President Donald Trump said the U.S. would not rule out a military option vis-a-vis North Korea’s latest nuclear test, according to Reuters.

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This morning in metals news, Chinese steel production once again hit a record last month, copper took a dip, and the gap between high-grade and low-grade iron ore grew larger as China attempts to combat its smog problem.

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Steel Output Hits New Record in China

Steel mills in China cranked up production levels en route to hitting a new monthly production record, according to Bloomberg.

According to the report, Chinese crude steel output hit 74.59 million metric tons in August, surpassing the previous peak of 74.02 million in July.

Copper Falls Back

Copper has been having a good year, but it fell to a four-week low Thursday as a result of what Reuters calls lackluster Chinese economic data.

What appears to be slowing demand from China, the world’s top metals consumer, contributed to the metal’s drop, according to the report.

Premiums Soar for High-Grade Iron Ore

Sticking with the China theme, Reuters reported the gap between high-grade and low-grade iron ore in China grew as a result of the country’s efforts to fight pollution.

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The trading gap between the two forms of ore was at its highest since August 2011, according to the report.

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This afternoon in metals news, steel imports are up 21.4% through the first eight months of the year, a report considers whether copper’s run will last and China has agreed to loan Guinea $20 billion in exchange for concessions on the country’s bauxite reserves.

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Steel Imports Up 21.4% This Year

The American Iron and Steel Institute (AISI) released steel import data earlier this week showing that total steel imports have risen 21.4% through the first eight months of this year compared with the same time frame in 2016.

According to the report, steel import permit applications in August totaled 3,572,000 net tons (NT).

The largest finished steel import permit applications for offshore countries in August were for: South Korea (418,000 NT, up 24% from July preliminary), Germany (141,000 NT, down 5%), Turkey (132,000 NT, down 48%), Taiwan (115,000 NT, down 4%) and Japan (107,000 NT, down 22%).  Through the first eight months of 2017, the largest offshore suppliers were South Korea (2,683,000 NT, down 1% from the same period in 2016), Turkey (1,855,000 NT, up 9%) and Japan (1,044,000 NT, down 18%).

Can Copper Keep Up the Pace?

Copper has been on a tear, earlier this week hitting a three-year high.

But can it last? Is the metal due for a market correction?

A report on nasdaq.com speculated about the future of the metal.

“While copper has lately been enjoying a stellar run, analysts are skeptical about the sustainability of the recent price rally,” the report states. “Many believe that prices of the metal will come under pressure as the market remains adequately supplied and demand is not strong enough.”

China Makes Deal on West African Nation’s Aluminum Ore

On Wednesday, China agreed to loan Guinea $20 billion over 20 years in exchange for concessions on the country’s bauxite reserves, Reuters reported.

Guinea is Africa’s leading bauxite producer.

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According to Guinean Mines Minister Abdoulaye Magassouba, the revenues generated from the mines would be used to pay for infrastructure in the country.

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This morning in metals news, U.S. steel production is up for the year, copper backed off its three-year high and a U.S. firm extended its merger deal with a Chinese company.

Steel Production Up 3.2%

According to data released by the American Iron and Steel Institute (AISI), U.S. raw steel production is up 3.2% in the year to date (through Sept. 2) compared with the same time frame in 2016.

Adjusted production through Sept. 2 amounted to 60,900,000 net tons, up from the 59,025,000 net tons last year to the same point last year.

For the week ending Sept. 2, domestic raw steel production was 1,747,000 net tons, up 8.6% for the same week in 2016 and up 0.4% from the previous week (ending Aug. 26).

Copper Falls Back

After hitting a three-year high, copper fell back slightly from that Wednesday.

LME copper fell 0.3% to $6,880 a ton by 0155 GMT, according to Reuters.

Staying Together

Aluminum and rolled products producer Aleris International extended a merger agreement with Chinese firm Zhongwang USA LLC, according to Platts.

The deal was extended to Sept. 15, according to the report. The deal was previously set to expire Aug. 31.

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This morning in metals news, positive Chinese economic data means good things for metals found in steel, a former Alcoa aluminum plant site in Tennessee is being redeveloped for a new purpose and copper demand from electric carmakers is set to surge in a big way over the next two decades.

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China Industrial Outlook Offers Boost

Postive indicators for Chinese industrial activity are yielding good news for steel-related metals, according to Reuters.

The official Purchasing Managers’ Index (PMI) jumped to 51.7 in August (from 51.4 the previous month), according to the report.

Alcoa Redevelops Old Plant Site

A former Alcoa aluminum plant site will soon be used for a new purpose.

According to a Knoxville News Sentinel report, the former Alcoa West Plant site in Tennessee will be lined with retail and office space.

Copper Cars

Certain metals will see their stocks soar as electric cars build momentum.

One of those metals, according to a report in The Street, is copper.

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Quoting a Bloomberg Intelligence analyst, the report says demand from electric carmakers could grow 6,100% by 2040.

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This morning in metals news, August was a huge month for aluminum, zinc, and nickel; copper hit a three-year high on Thursday; and a South Korean company announced it will produce lithium-ion batteries with a greater percentage of nickel than before.

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An Anything But Dreary Month

August is typically a quiet month for many, as people take vacations before the end of the summer.

It was not a quiet month for metals, though.

In August, aluminum, zinc and nickel all posted significant price increases (10%, 12% and 15%, respectively).

Copper Hits Three-Year High

Copper kept rolling Thursday, hitting a peak not seen since 2014.

The metal thus closes a strong August  — during which its price rose 7.5% — on a record note.

From Cobalt to Nickel

As automakers look to meet growing demand for electric vehicles, some battery makers are turning to more nickel and less cobalt in the construction of lithium-ion batteries.

For South Korean company SK Innovation, that means using more nickel. The company announced Thursday that it has begun commercial production of batteries using an increased portion of nickel (as opposed to the expensive, and scarce, cobalt).

“The batteries will help extend a driving range of electric vehicles up to 500 kms, and we will also develop new batteries by 2020 that can provide a range of more than 700 kms,” Lee Jon-ha, principal researcher of the company’s battery R&D center, said in a statement quoted by Reuters.

Free Download: The August 2017 MMI Report

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This morning in metals news, LME copper had a quieter Wednesday, Mexico looks to formulate a backup plan for a potential life after NAFTA and steelmakers are looking to maintain their market share in the world of skyscrapers.

LME Copper Hangs Near Three-Year High

LME copper didn’t have as big of a day on Wednesday as it did on Tuesday — nonetheless, the metal is still close to its three-year high.

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According to Reuters, a bounceback in the dollar slowed momentum gained from growth in China’s housing and manufacturing sectors.

Life After NAFTA? Mexico Considers It

As President Donald Trump in recent weeks has resumed threats of terminating the North American Free Trade Agreement (NAFTA), Mexico is looking to formulate a backup plan.

Mexican Economy Minister Ildefonso Guajardo called the talks to renegotiate the deal a “roller coaster,” according to Reuters.

With the rhetoric from Trump picking up, it’s not surprising that Mexico is planning for a situation in which Trump pulls the plug on the 23-year-old trade deal.

Steelmakers with Eyes to the Skies

Concrete is becoming increasingly popular as a building material — so much so that steelmakers are  working hard to preserve their construction market share.

Free Download: The August 2017 MMI Report

According to a Bloomberg report: “Since 2000, steelmakers outside China expanded output of structural beams and columns at only about half the pace of rods, or rebar, used to reinforce concrete, the World Steel Association says.”

Aluminum, copper and zinc have moved in a solid bullish manner. While nickel has joined these three base metals, tin and lead seems to be more reticent to join the bull party. 

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Tin showed some weakness at the beginning of August, contrary to the other four base metals. In August, prices fell sharply. The tin price soon recovered, but still lacked the bullish sentiment. Trading volumes are not heavy, nor are prices breaking key resistance levels.

Source: MetalMiner analysis of FastMarkets

Lead has also showed some weaknesses during August, as prices fell with heavy selling volume. 

Source: MetalMiner analysis of FastMarkets

What Does This Mean for Buying Organizations?

For its forecast subscribers, MetalMiner defines different buying strategies for all of the base metals, as well as four forms of steel, depending on the price dynamics, together with trading volumes.

Even though the industrial metal outlook remains bullish, lead and tin seem to be behaving on their own terms. Buying organizations will want to pay careful attention to trading volumes in the coming month.

Free Download: The August 2017 MMI Report

Knowing when to buy forward and when to hold off on purchases can be a challenging activity for any procurement professional. MetalMiner’s Monthly Metal Buying Outlooks provide buying organizations with a clearer picture as to when to make purchasing decisions.

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This morning in metals news, production of raw steel in the U.S. is up for the year, President Donald Trump reportedly rejected a Chinese proposal to cut its steel excess capacity and copper approached a three-year high.

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Steel Production Up 3% Year-Over-Year: AISI

According to data released by the American Iron and Steel Institute on Monday, U.S. raw steel production for the week ending Aug. 26 was down 1.3% from the previous week.

However, compared to the same week in 2016, production was up 5.1%.

In the year to date, production through Aug. 26 amounted to 59,153,000 net tons, up 3% from the 57,416,000 net tons during the same period last year.

Trump Reportedly Rejects China’s Capacity Cut Proposal

Given how much ink has been spilled and time spent talking about Chinese excess steel capacity and its effect on the global market, one would think any proposals from China aimed at cutting capacity would be welcomed.

Apparently not.

According to reporting from the Financial Times, President Trump rejected a Chinese proposal to cut its excess capacity. China proposed cutting 150 million tons by 2022, but Trump instead directed advisors to find ways to impose tariffs on imports, according to the report.

As has been discussed ad nauseam, China’s overcapacity has been the focal point of the Trump administration’s Section 232 investigations into steel and aluminum imports.

Copper Continues Rise

Copper rose nearly to a three-hear high Tuesday on falling inventories and a dropping dollar, Reuters reported.

The metal reached $6,825 per ton, its highest since October 2014, according to the report.

Free Download: The August 2017 MMI Report

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This morning in metals news, it was a mixed Monday for base metals in China; in Arizona, the copper industry, environmentalists and recreation groups are at odds; and a Washington State aluminum smelter’s future remains uncertain.

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Nickel, Zinc, Lead All Fall

It was not a great Monday for Chinese base metals linked with the steel markets, Reuters reported.

According to the report, nickel, zinc and lead posted the biggest drops, while copper gained by 0.9%.

Multinational Company Wants to Mine in Ironwood Forest National Monument

Mining firm Asarco wants permission to set aside 11,000 acres of the Ironwood Forest National Monument for it to mine copper, according to an Associated Press report.

That request has received some pushback. U.S. Rep. Raul Grijalva, whose district includes much of Ironwood, emphasized the importance of preserving public land.

“The reason Ironwood was designated was to protect its habitat and protect its land in perpetuity,”  Grijalva told the AP. “There are no private rights to public property.”

On Again, Off Again

The Alcoa aluminum plant in Wenatchee, Wash., has had a wobbly existence since the turn of the century.

The plant first shut down in 2001, reopened in 2004 and shut down again in 2015, affecting the local working population.

With prices of aluminum ingots rising, could it mean the return of jobs there? The Seattle Times reported on the plant, its future and the locals whose livelihoods are linked with the plant’s future.

Free Download: The August 2017 MMI Report

Given that the total number of U.S. aluminum smelters in operation has declined from 23 in 1993 to six today, Wenatchee is just one example of a town hit by the decline of the U.S. aluminum smelting industry. Whether it, and other plants like it, can come back on stream remains to be seen. Of course, how the Trump administration concludes its Section 232 investigations of steel and aluminum imports will have a significant impact.