Author Archives: Irene Martinez Canorea

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Domestic steel prices have been in a downtrend since August, when prices started to show the first signs of weakness.

All forms of steel, except plate, have showed downward price momentum.

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Source: MetalMiner data from MetalMiner IndX(™)

Historically, steel prices move lower during Q3 and part of Q4. When the budgeting season starts, mills begin to raise steel prices.

For the past three years, steel prices have increased at the end of Q1, just a little delayed from the general Q4 increase.

However, this year the price increase remains in hibernation.

Steel prices continue to move lower and lead times have not increased. In fact, lead times remain the shortest in a year.

Therefore, steel price increases do not seem justified for HRC, CRC and HDG.

Plate Prices — Why Are They Moving Differently?

Meanwhile, plate prices have followed their own trend.

Plate prices have remained well-supported so far. While other forms of steel have seen price declines since August, plate prices continue to trade sideways.

In fact, plate prices have increased during this time.

Source: MetalMiner data from MetalMiner IndX(™)

Plate prices in general have less volatility than other forms of steel. Plate prices often trade sideways in one direction for a long time, then suddenly shift and move into a different trend.

Lead times combined with strong demand have supported plate prices. Most steel producers see lower automotive numbers, but demand from plate-consuming industries remains stronger.

While all the other steel forms have had shorter lead times during the year, with increasing domestic capacity utilization, plate lead times continue to lengthen.

Chinese Steel Prices

The 800-pound gorilla, China, offers a window into what may happen to domestic prices.

Chinese steel prices have fallen since September 2018. Steel prices have been softer in China this year, driven by signals of weaker demand and a slower manufacturing index.

Source: MetalMiner data from MetalMiner IndX(™)

What This Means for Industrial Buyers

Current domestic steel prices appear to be in a downtrend.

Adapting the right buying strategy becomes crucial to reducing risks. Only the MetalMiner monthly outlooks provides a continually updated snapshot of the market from which buying organizations can determine when and how much of the underlying metal to buy.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

Base metals traded higher at the beginning of January. However, momentum appears to be weaker once again.

The DBB index has shown weakness since June 2018, when it started this short-term downtrend. MetalMiner has recently revised its market outlook, advising buying organizations to closely follow how the index develops.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

DBB index. Source: MetalMiner analysis of Yahoo Finance

Since 2016, the DBB base metals complex has remained in a long-term trend (see the chart below). Base metal prices have skyrocketed since then but moved lower in 2018, when concerns about the Chinese economy started to appear.

DBB index long-term trend. Source: MetalMiner analysis of Yahoo Finance

A weaker Chinese economy will move demand lower. However, 2018 closed with the six base metals in global deficit. Supply and demand has not moved; therefore prices, mostly economic expectations and trading changes have driven base metal markets.

The Drivers

The DBB index comprises three base metals: aluminum, copper and zinc.

LME aluminum prices moved higher at the beginning of January, but prices did not breach the $1,970/mt level that acted as a support for most 2018. Prices being unable to breach that support level signals weakness for the base metal complex.

LME Aluminum prices. Source: MetalMiner analysis of FastMarkets

Both LME copper and LME zinc prices started to increase slightly at the beginning of January. Similar to aluminum, prices of both base metals fell. LME copper remains below the $6,000/mt level, which has served as the psychological ceiling for copper prices.

What This Means for Industrial Buyers

The base metals complex seems seems weaker. MetalMiner recently switched the long-term uptrend to a sideways trend.

Buying organizations may want to follow price dynamics closely, as well as each specific base metal price. Adapting the right buying strategy becomes crucial to reducing risks.

Only the MetalMiner Monthly Outlook reports provide a continually updated snapshot of the market from which buying organizations can determine when and how much of the underlying metal to buy.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

The Stainless Steel Monthly Metals Index (MMI) dropped five points this month, losing 7.6% and currently standing at a value of 61. The current index sits just above the August 2017 level of 59 points, when LME nickel prices touched support and rebounded. The drop came as a result of lower LME nickel prices and lower U.S. stainless steel surcharges.

Need buying strategies for steel in 2019? MetalMiner’s Annual Outlook has what you need

LME Nickel

LME nickel prices decreased in December, following a short-term downtrend that started in June 2018. Nickel prices have increased slightly so far in January, showing some recovered momentum along with other LME base metals. However, given the current commodity outlook, price increases need careful monitoring.

Source: MetalMiner analysis of Fastmarkets

Domestic Stainless Steel Market

Domestic stainless steel surcharges fell again. This is the sixth consecutive monthly drop in stainless steel surcharges this year, starting in July 2018, after surcharges peaked. The 316/316L-coil NAS surcharge fell to $0.80/pound, while the 304/304L surcharge fell to $0.53/pound.

Source: MetalMiner data from MetalMiner IndX(™). Note: Y-axis values represent $/lb.

The stainless steel surcharge has started a short-term downtrend, driven by the general price slowdown for steel and stainless steel markets. Stainless steel surcharges now appear to be moving toward 2015/2016 lows.

What This Means for Industrial Buyers

Stainless steel price momentum slowed down again this month, similar to carbon steel. Nickel prices also appear weaker, following slower momentum in commodities markets and in industrial metals markets. Buying organizations may want to follow the market closely for opportunities to buy on the dips.

To understand how to adapt buying strategies to your specific needs on a monthly basis, sign up for a free trial of our Monthly Outlook now.

Actual Stainless Steel Prices and Trends

Chinese 304 stainless steel coil decreased by 1.9%, while Chinese 316 stainless steel coil prices slid this month by 10.8%. Meanwhile, Chinese Ferrochrome prices fell by 3.9%, to $1,780/mt. Meanwhile, FerroMolybdenum lumps prices fell 13%, moving to $16,282/mt. Nickel prices also fell this month by 4.9% to $10,725/mt.

The January Aluminum Monthly Metals Index (MMI) fell 3.4% this month, coming in at a value of 85. The index fell 3 points from December’s reading and has returned to a low not seen since February 2017 when the index hit a value of 84.

Buying Aluminum in 2019? Download MetalMiner’s free annual price outlook

So far in January, LME aluminum prices have increased. LME aluminum prices fell below the $1,970/mt level, which has acted as support for most of 2018.

Source: MetalMiner analysis of Fastmarkets

LME aluminum prices seem to have found a new support at $1,795/mt. Prices have rebounded from that level and seem to have gained some momentum. The politics of trade and financial uncertainty in China, rather than supply and demand in the aluminum market have moved LME price levels in 2018.

Chinese Aluminum Scrap

The Chinese environment ministry announced restrictions of imports of scrap steel and aluminum starting July 1 of this year. Scrap steel and aluminum will be moved from an unrestricted import list of solid waste products used as raw materials, to a restricted import list.

SHFE aluminum prices also increased this month, following LME aluminum price dynamics. SHFE aluminum prices however, remain a short-term downtrend since August 2018.

Source: MetalMiner analysis of Fastmarkets

China’s Chalco (Aluminum Corporation of China Ltd.), the largest state-owned aluminum producer in the country, announced at the end of December that it would cut output as a result of falling aluminum prices. In 2017, China’s Chalco shut 470,000 tons of aluminum capacity, or 12% of their 3.93 million tons of primary aluminum capacity.

Production cuts come as a result of falling aluminum prices, ample supply in the country and weaker local demand. Chalco did not cut aluminum production due to environmental concerns, as their smelters remain outside the 28 northern Chinese cities that face special restrictions during the heating season. 

U.S. Domestic Aluminum

The current U.S. aluminum Midwest Premium has also traded sideways in January. The current price stands at $0.18/lb, the third straight month at that level. Despite the sideways trend for the premium, the current premium remains high.

Source: MetalMiner data from MetalMiner IndX(™)

Canada and the U.S. discussed tariffs on Canadian steel and aluminum this week. However, it does not seem that sanctions will be lifted for now. While the sanctions remain in place, domestic aluminum prices remain supported.

What This Means for Industrial Buyers

Despite the recent price increases, LME aluminum prices appear weaker. Tariffs, sanctions and supply concerns may act as a support to aluminum prices, both for LME aluminum and the U.S. Midwest Premium. However, the current base metals complex appears to have lost momentum. Therefore, adapting the “right” buying strategy becomes crucial to reduce risks. Only the MetalMiner Monthly Outlook reports provide a continuously updated snapshot of the market from which buying organizations can determine when and how much of the underlying metal to buy.

Click here for more info on how to mitigate price risk all year round — take a free trial of our Monthly Metal Buying Outlook.

Actual Aluminum Prices and Trends

LME aluminum prices fell this month, with a closing price in December of $1,849/mt. Meanwhile, Korean commercial grade 1050 sheet fell by 3.8% to $3.28/kilogram. Chinese aluminum primary cash prices fell by 2.5%, while Chinese aluminum bar prices fell by 2.4%. Chinese aluminum billet prices rose 2.2% this month, to $2,087/mt. The Indian primary cash price decreased by 6.6% to $1.85/kilogram.

The Raw Steels Monthly Metals Index (MMI) fell again this month, dropping to 79 points. The current MMI index has fallen toward October 2017 levels of 79, before global steel prices started to rise sharply.

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The recent slowdown in domestic steel price momentum led to the decline. Domestic steel prices recently fell fairly sharply, driven by slower Chinese demand and ample steel availability.

Domestic steel prices have showed slowing momentum since June 2018. They increased sharply at the beginning of the year, driven by a bullish market in commodities and industrial metals, as well as by the Section 232 tariffs. During most of 2018, domestic steel prices remained at seven-year highs.

Source: MetalMiner data from MetalMiner IndX(™)

However, steel prices have showed slower momentum recently and prices appear to have started a sharp downtrend. MetalMiner does not expect prices to increase in the short term, although mills may try to shore up prices with price increase announcements.

Meanwhile, plate prices have decreased at a slower pace. Plate price movements are commonly sharper. In other words, plate prices tend to move in one direction and then change sharply. Lower availability has kept domestic plate prices from falling too far, but domestic prices fell in December.

Source: MetalMiner data from MetalMiner IndX(™)

Historically, steel prices in general tend to drift lower during the beginning of Q4 and then rise. In 2017, HRC domestic prices started to increase in December, then skyrocketed during the first quarter of 2018. In 2018, prices did not increase in Q4. MetalMiner does not expect domestic steel prices to increase in the short term.

Chinese Steel Prices

So far in January, prices for all forms of Chinese steel have also fallen. Chinese domestic steel prices started to decrease at the end of October, driven by the start of the winter season.

Source: MetalMiner data from MetalMiner IndX(™)

Chinese steel domestic demand appears weaker, and a slower Chinese economy has driven the recent price decline.

The yuan traded sideways this month. However, current levels are back at 2016 levels, or 0.14 U.S. dollar/yuan. A weaker yuan makes Chinese goods more appealing, despite the U.S. tariffs. Meanwhile, the Chinese stock market (FXI Shares) fell again this month. The Chinese stock market has fallen during most of 2018 after reaching a peak at the beginning of the year. The new downtrend comes as a result of a slowdown in China.

What This Means for Industrial Buyers

Current domestic steel prices appear in a downtrend. Adapting the “right” buying strategy becomes crucial to reduce risks. Only the MetalMiner monthly outlooks provide a continuously updated snapshot of the market from which buying organizations can determine when and how much of the underlying metal to buy.

Click here for more info on how to mitigate price risk all year round – and take a free trial of our Monthly Metal Buying Outlook.

Actual Raw Steel Prices and Trends

The U.S. Midwest HRC 3-month futures price fell again this month by 6.31%, moving to $712/st. Chinese steel billet prices fell this month by 3%, while Chinese slab prices fell by 1.27% to $529/mt. The U.S. shredded scrap price closed the month at $353/st, dropping by 1.4% from last month.

In January, the Copper Monthly Metals Index (MMI) dropped 3.9%, falling back 3 points to the November 2018 level of 74. Lower LME copper prices drove the index lower.

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Similar to other base metals, LME copper prices fell in December. LME copper prices fell below the $6,000/mt level, which served as a stiff resistance level for most of 2017. Prices over this level indicate a bullish copper market, while prices below that level signal a more bearish trend. This level has represented a psychological signal for “Doctor Copper” since 2017.  

LME Copper prices. Source: MetalMiner analysis of Fastmarkets

So far in January, LME copper prices have increased. However, current levels remain below that $6,000/mt psychological ceiling. Trading volume also appears weaker, which does not support a sharp uptrend.

Global Copper Outlook

According to data released in January, Chilean copper production reached 540,720 tons in November, the highest level in 13 years. The increase was driven by higher ore grades and more efficient processes. As reported by Chile’s national statistics agency INE, copper production increased 7% in November versus October. Production reached its highest levels  since December 2005.

Anglo American announced that overall production will increase more than expected between 2018-2021. Forecasts suggest 2018 production increased by 2%, driven by increases in copper output. 2019 production could increase by another 3%, and 2020-2021 production by an additional 5%.

Despite this forecast by Anglo American, the International Copper Study Group (ICSG) announced a wider deficit in September. The global refined copper deficit increased to 168,000 tons in September from the previous 43,000 tons in August. For the first nine months of 2018, the market saw a 595,000-ton deficit versus the previous year’s deficit of 226,000 tons.

Chinese Scrap Copper

LME copper prices and Chinese copper scrap prices tend to follow the same trend. However, this month they traded differently. LME copper prices fell while Chinese copper scrap prices increased. The divergence between LME copper prices and Chinese copper scrap has become more notable recently, driven by lower scrap availability in China.

Source: MetalMiner data from MetalMiner IndX(™)

The spread has become smaller this month. The wider the spread, the higher the copper scrap consumption, and therefore, the price.

What This Means for Industrial Buyers

LME copper prices fell this month, moving below the $6,000/mt level. Buying organizations will want to understand how to react to the latest copper price movements. Adapting the “right” buying strategy becomes crucial to reduce risks. Only MetalMiner’s Monthly Outlook reports provide a continuously updated snapshot of the market from which buying organizations can determine when and how much of the underlying metal to buy.

Click here for more info on how to mitigate price risk all year round — and get a free 2-month trial to our Monthly Metal Buying Outlook.

Actual Copper Prices and Trends

In December, most of the prices that comprise the Copper MMI basket fell. LME copper decreased by 4.87% this month. Indian copper prices also fell by 5.91%, while Chinese cash primary copper prices decreased by 3.83%. Prices of U.S. copper producer grades 110 and 122 fell by 3.36%. Meanwhile, the price of U.S. copper producer grade 102 decreased by 3.2%, to $3.64/pound.

The Stainless Steel Monthly Metals Index (MMI) dropped two points, bringing the index value to 66 points.

The drop came as a result of lower LME nickel prices, while U.S. stainless steel surcharges held steady this month.

Need buying strategies for steel in 2019? MetalMiner’s Annual Outlook has what you need

LME Nickel

LME nickel prices traded lower in November, continuing the six-month downtrend that started back in June 2018.

LME nickel prices started to rise slightly at the end of November, and have risen so far this month. Current trading volumes appear weaker, which usually supports a downtrend.

Source: MetalMiner analysis of FastMarkets

Nickel Global Tightness

Forecasts suggest nickel will see increased availability in 2019.

Indonesia plans to increase capacity further, adding to nickel supply. Moreover, U.S.-China trade tensions over steel and stainless steel have driven LME nickel prices lower.

Despite the expectation of a nickel supply increase, current stock numbers do not indicate that yet. Nickel stocks at LME warehouses sit at 215,000 tons, 40% lower than at the beginning of 2018.

In December, Indonesia granted permission for two commodity companies to restart exports of nickel ore. In August, the mining ministry revoked export permits for around 4,222,119 tons of nickel ore shipments from PT Surya Saga Utama, PT Modern Cahaya Makmur and PT Integra Mining Nusantara, as they were not showing any smelter development.

Brazilian miner Vale SA, the world’s top nickel producer, plans to invest $500 million in its New Caledonia nickel mine, reflecting the recent boost in electric vehicle (EV) sales.

Miner BHP received approval from the Australian government to develop a nickel mine that would primarily feed its Nickel West battery chemicals business. The Venus deposit is one of the most relevant nickel deposits for the company, as it is looking to produce nickel sulphate (primarily used for electric vehicle batteries).

Domestic Stainless Steel Market

Domestic stainless steel surcharges fell again. This is the fifth consecutive drop in stainless steel surcharges this year.

The 316/316L-coil NAS surcharge fell to $0.87/pound, while the 304/304L surcharge fell to $0.60/pound.

Source: MetalMiner data from MetalMiner IndX(™)

The stainless steel surcharge has started a short-term downtrend, driven by the general slowdown in the steel and stainless steel markets.

However, stainless steel surcharges still remain well above 2015/2016 lows.

What This Means for Industrial Buyers

Stainless steel price momentum slowed down again this month, similar to carbon steel.

Nickel prices also appear weaker, following slower momentum in commodities markets.

Buying organizations may want to follow the market closely for opportunities to buy on the dips.

To understand how to adapt buying strategies to your specific needs on a monthly basis, request a free trial of our Monthly Outlook now.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

Actual Stainless Steel Prices and Trends

Chinese 304 stainless steel coil decreased by 2.07%, while Chinese 316 stainless steel coil prices fell this month by 3.34%.

Meanwhile, Chinese Ferrochrome prices fell by 0.25%, down to $1,852/mt. FerroMolybdenum lumps prices fell 8.6%, moving to  $18,739/mt.

Nickel prices fell by 3.38% to $11,280/mt.

The Raw Steels Monthly Metals Index (MMI) fell again this month, dropping to 83 points. The Raw Steels MMI held at 89 points since August for four consecutive months, but started decreasing in November.

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The recent slowdown in domestic steel price momentum led to the decline. Domestic steel prices recently decreased sharply on the back of slower demand and softer Chinese prices.

Domestic steel prices have showed slowing momentum since June 2018. Domestic steel prices increased sharply at the beginning of the year, driven by a bullish market in commodities and industrial metals and Section 232 tariffs. During most of 2018, domestic steel prices have remained at seven-year highs.

Source: MetalMiner data from MetalMiner IndX(™)

All forms of steel decreased in November except plate, which increased (driven by tight supply). Domestic plate has longer lead times than other forms of steel.

Hot-rolled coil (HRC), and hot-dip galvanized (HDG) prices also fell in December, while cold-rolled coil (CRC) prices increased slightly.

However, domestic steel prices remain in a downtrend that may last until the Chinese steel sector shows some strength again.

Historically, prices tend to drift lower during the beginning of Q4 and then rise. Last year, HRC domestic prices started to increase in December, then skyrocketed during the first quarter of 2018. However, MetalMiner does not see this increase happening during this year’s Q4 cycle.

Chinese Steel Prices

So far in December, prices of all forms of Chinese steel have decreased.

Chinese domestic steel prices started to decrease at the end of October, driven by the start of the winter season.

Source: MetalMiner data from MetalMiner IndX(™)

Chinese steel domestic demand appears weaker; fears around the Chinese economy and manufacturing growth have sent prices down.

HRC prices have declined by 5% in December already, while CRC prices have fallen by 7%.

Lower prices in China come as a result of weaker demand and increasing production. October Chinese steel output increased for a third straight month, as mills boosted output ahead of production cuts.

Chinese stock market (FXI Shares). Source: MetalMiner analysis from SeekingAlpha

The yuan continues to weaken, and the yuan/USD exchange rate is falling. U.S. importing organizations might want to remember that a weaker yuan makes Chinese goods more appealing, despite the tariffs.

Meanwhile, the Chinese stock market (FXI Shares) has fallen during most of 2018 after reaching a peak at the beginning of the year. The new downtrend comes as a result of a slowdown in China.

What This Means for Industrial Buyers

Current domestic steel prices seem to have started a downtrend.

Adapting the right buying strategy becomes crucial to reducing risks.

Only the MetalMiner monthly outlooks provide a continually updated snapshot of the market from which buying organizations can determine when and how much to buy of the underlying metal.

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

Actual Raw Steel Prices and Trends

The U.S. Midwest HRC 3-month futures price fell this month by 6.86%, moving to $760/st.

Chinese steel billet prices fell this month by 12.81%, while Chinese slab prices fell by 10.78% to $536/mt. The U.S. shredded scrap price closed the month at $358/st, increasing by 4.6% month over month.

In December, the Copper Monthly Metals Index (MMI) rose three points, returning to October 2018 levels. Higher LME copper prices drove the index. The current Copper MMI stands at 77 points.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Contrary to other base metals, LME copper prices increased in November.

LME copper prices have maintained momentum that started back in September. LME copper prices still trade over the $6,000/mt level, which served as a stiff resistance level for most of 2017. Prices over this level indicate a bullish copper market, while prices below that level signal a more bearish trend. Trading volume remains heavier on the buys, which also supports prices.

LME Copper prices. Source: MetalMiner analysis of Fastmarkets

LME copper prices, however, have fallen so far in December. However, this slight decrease does not seem to be relevant.

Buying organizations can expect LME copper price momentum to remain strong in the short term.

Global Copper Outlook

Chile, the world’s top copper producer, reported a 7.3% increase in copper output in the January- September time frame compared with the same period in 2017, boosted by a sharp increase from BHP’s Escondida copper mine.

The Escondida mine reached 950,000 tons of copper output, 57.8% higher from the same period in 2017 (due to the 40-day strike last year).

Meanwhile, Codelco’s production came in at  1.29 million tons, down 2% from last year. The Collahuasi mine, owned by Anglo American Plc and Glencore Plc, currently the second-largest mine in the country, reached 401,8000 tons of copper output during this period, 5.8% higher than last year.

Delegates at the Asia Copper Conference in Shanghai forecasted a strong and healthy outlook for copper demand in the mid- to long term. According to Jerry Jiao, vice president of China Minmetals Corp., the renewable energy revolution will boost copper demand in the future, with an expected increase of 2.4 million tons by 2030. That demand, together with the increase of the Chinese car fleet replaced by 20% electric vehicles by 2030 will result in 2.8 million tons of incremental copper demand (based on 60 kilogram per car and 47 million cars in the country, as reported by Reuters).

Current copper Chinese demand goes toward air conditioning, automobiles (for which demand has weakened) and infrastructure investment. In fact, copper used for infrastructure investment will serve as the biggest contributor to Chinese copper demand in 2019.

Indian copper demand will likely double by 2026, due to increasing demand in power, auto and consumer sectors. Demand in the country could reach 1.433 million tons by 2026 from 650,000 tons in 2018. Different projects have boosted investments, but this projection does not include copper usage in electric vehicles, which would increase demand up to 2.5 million tons.

Indian smelter capability utilization came in at 80%, or 843,000 tons of refined copper versus the projected 642,000 tons of projected demand. However, the recent shutdown of Vedanta (400,000 tons per year) may lower the refined copper number in 2018.

Chinese Scrap Copper

LME copper prices and Chinese copper scrap prices tend to follow the same trend. Both increased this month.

However, the pace of the increases seems to differ.

Chinese scrap prices increased softly, while LME copper prices showed stronger momentum.

Source: MetalMiner data from MetalMiner IndX(™)

The spread has become wider again. The wider the spread, the higher the copper scrap consumption, and therefore, the price.

What This Means for Industrial Buyers

LME copper prices increased this month, following a two-month uptrend. Buying organizations will want to understand how to react to the latest copper price movements.

Adapting the right buying strategy is crucial to reducing risks. Only the MetalMiner monthly outlooks provide a continually updated snapshot of the market from which buying organizations can determine when and how much to buy of the underlying metal.

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

Actual Copper Prices and Trends

In November, most of the prices comprising the Copper MMI basket rose.

LME copper increased by 4.48% this month. Indian copper prices rose by 6.82%, while Chinese primary copper prices jumped 3.92%.

Prices of U.S. copper producer grades 110 and 122 increased by 4.08%. Meanwhile, the price of U.S. copper producer grade 102 rose 3.86%, up to $3.76/pound.

The December Aluminum Monthly Metals Index (MMI) held steady this month at 88.

Buying Aluminum in 2019? Download MetalMiner’s free annual price outlook

LME aluminum prices also fell in November. Aluminum prices appear weaker this month. However, prices have increased so far in December.

Source: MetalMiner analysis of FastMarkets

From last July until November, LME aluminum prices traded in the $1,970-$2,170/mt level. However, prices moved slightly below the $1,970/mt floor in November.

The politics of trade and financial uncertainty in China, rather than supply and demand in the aluminum market, have moved LME price levels.

Rusal Aluminum Market

Russian aluminum giant Rusal’s aluminum profits continue to rise while sanctions continue to get postponed, this time from Dec. 12 to Jan. 7.

Rusal primary aluminum production reached 940,000 tons in Q3, 1% higher year on year. Primary aluminum and alloys sales increased by 8.1% year on year to 1.05 million tons. Rusal aluminum exports increased by 4% in October compared to September.

China Alumina Market

According to the president of Aluminum Corp of China Ltd, alumina exports held steady in October. Chinese aluminum makers have exported unusually high alumina volumes in 2018 due to supply constraints.

Alumina tightness came as a result of the strike at Alcoa’s operations in Western Australia, the outage at the Norsk Hydro Alunorte alumina refinery and U.S. sanctions on Russia’s United Company Rusal.

September alumina exports were five time higher than August, rising to over 165,000 tons. The higher numbers come on the heels of advanced production in September-October before the winter cuts (Nov. 15-March 15).

However, unlike last year, Chinese production in 2018 will not have blanket requirements for 30% output cuts.

SHFE aluminum prices also fell this month, hitting their lowest level since October 2016. Current prices have fallen 13% from the beginning of 2018. SHFE trading volumes fell 37% from this time last year, which means buyer sentiment — and, therefore, prices — have fallen.

Source: MetalMiner analysis of FastMarkets

However, SHFE aluminum prices traded similarly to LME aluminum prices and increased so far in December.

U.S. Domestic Aluminum

The U.S. aluminum Midwest Premium has traded sideways in December.

The current price stands at $0.18/pound, the same level as November, and lower than the $0.20/pound level in April-May 2018. Despite the sideways trend, the current premium remains high.

Source: MetalMiner data from MetalMiner IndX(™)

What This Means for Industrial Buyers

LME aluminum prices appear weaker at this point. Tariffs, sanctions and supply concerns may act as a support to aluminum prices, both for LME aluminum and the U.S. Midwest Premium.

Adapting the right buying strategy becomes crucial to reducing risks.

Only the MetalMiner monthly outlooks provide a continually updated snapshot of the market from which buying organizations can determine when and how much to buy of the underlying metal.

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

Want to see an Aluminum Price forecast? Take a free trial!

Actual Aluminum Prices and Trends

Aluminum prices fell this month, with a closing price in November of $1,950/mt.

Meanwhile, Korean commercial grade 1050 sheet increased by 3.96% to $3.41/kilogram after last month’s downtrend.

Chinese aluminum primary cash prices increased by just 0.28%, while Chinese aluminum bar fell by 1.63%. Chinese aluminum billet prices also decreased, down 3.13% this month to $2,042/mt.

The Indian primary cash price rose by 1.02% to $1.98/kilogram.