Author Archives: Irene Martinez Canorea

Charles/Adobe Stock

In August, the Copper Monthly Metals Index (MMI) fell by four points. The Copper MMI has continued to slide, mainly driven by weaker LME copper prices in July. The current Copper MMI stands at 77 points.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

The recent slide in copper prices has been driven by concerns over Chinese growth. Analysts commonly call the base metal “Dr. Copper” because of its strong correlation with the Chinese stock markets. Therefore, Dr. Copper serves as a reflection of the Chinese economy.

However, copper prices appear to have begun to stabilize and are currently trading more sideways. Prices appear to be in a buying dip.

Source: MetalMiner analysis of Fastmarkets

However, fundamental supply issues may add support to copper prices.

The world’s largest copper mine, the Chilean Escondida mine, may get shut down due to a strike. The strike comes as a result of failed negotiations between BHP Billiton and the labor union representing the workers at the mine. The labor union gave the company an ultimatum with a deadline to go on strike. The company could improve the contract offer before Aug. 6.

According to a Reuters report, BHP requested government mediation in the talks with the union, temporarily delaying a potential strike.

Last year, the Escondida mine workers went on a 44-day strike that reduced copper output by 200,000 tons.

Supply disruptions remain a concern elsewhere, as well.

Other mines, such as the Chilean Caserones mine, failed to conclude contract negotiations. Codelco’s Chuquicamata copper mine, the state-owned miner’s second-largest in the country, blocked access to the mine in early August.

Chinese Scrap Copper

LME copper prices and Chinese copper scrap prices tend to follow the same trend. Both appear in a long-term uptrend. However, both LME copper and scrap copper prices fell again this month. In July,copper scrap prices fell  less than LME copper prices.

Despite both following the same short-term downtrend, the spread has widened. The wider the spread, the higher the copper scrap consumption — and, therefore, the price.

Source: MetalMiner data from MetalMiner IndX(™)

The spread seems to have tightened again.

What This Means for Industrial Buyers

Despite the recent dip, LME copper prices remain in a long-term uptrend.

Buying organizations will want to be prepared to understand how to react to the latest copper price movements. For those who want to understand how to reduce risks, take a free trial now to the MetalMiner Monthly Outlook.

Actual Copper Prices and Trends

In August, most of the prices comprising the Copper MMI basket decreased.

LME copper fell by 6% this month. Indian copper prices decreased by 5%, while Chinese primary copper prices also fell by 5%.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

Prices of U.S. copper producer grades 110 and 122 decreased by 3.76%. Meanwhile, the price of U.S. copper producer grade 102 fell by 3.58%, down to $3.77/pound.

The Raw Steels Monthly Metals Index (MMI) fell one point further this month, dropping to 89 from the previous 90 reading.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

The Raw Steel MMI has returned to May 2018 levels. The slight drop came as a result of slower domestic steel price momentum.

Domestic steel prices still remain at a more than seven-year high. However, the pace of the increases seems to have slowed recently. Domestic steel prices — with some exceptions — are mostly trading sideways, and some steel forms have started to drop slightly.

Source: MetalMiner data from MetalMiner IndX(™)

Plate and HRC ended higher last month, while CRC and HDG prices dropped. Long lead times in Q2 and Q3 combined with supply shortages have supported domestic steel prices. However, lead times seem to be shortening now, which may causes prices to drift lower.

Historical steel price cyclicality could cause prices to move lower at some point. Domestic steel prices have stayed in a sharp uptrend since January 2018. Prices may begin to come off slightly at some point this year.

Chinese Steel Prices

So far in August, Chinese steel prices have increased. Chinese steel prices appear to be in recovery and have started an uptrend, after a slight downtrend, since the beginning of the year.

Source: MetalMiner data from MetalMiner IndX(™)

Chinese steel prices tend to drive U.S. domestic steel prices. Therefore, buying organizations may want to keep a close eye on pricing.

Domestic Shredded Scrap

Shredded scrap prices traded sideways this month. Scrap prices commonly follow the same trend of domestic steel prices.

Scrap prices have been in an uptrend since the beginning of the year (along with steel prices). The pace of the increases appears to be less sharp, but scrap price movements this year appear to be less volatile than steel prices.

Source: MetalMiner data from MetalMiner IndX(™)

What This Means for Industrial Buyers

Since steel prices remain high, buying organizations may want to closely follow price movements to decide when to commit mid- and long-term purchases.

Buying organizations looking for more clarity on when to buy and how much to buy may want to take a free trial now to our Monthly Metal Buying Outlook.

Actual Raw Steel Prices and Trends

The U.S. Midwest HRC 3-month futures price fell this month by 4.34%, falling to $815/st.

Chinese steel billet prices decreased again this month by 4.05%, while Chinese slab prices fell 2.1% moving to $626/mt.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

The U.S. shredded scrap price closed the month at $371/st, trading flat from last month.

The Stainless Steel Monthly Metals Index (MMI) fell slightly this month, down to 82 from 84.

Despite the fall in the Stainless Steel MMI, the index remains at February 2015 highs.

The index dropped due to a slight decrease in LME nickel prices in June. However, stainless steel surcharges inched higher again this month, remaining in a strong uptrend.

LME Nickel

In June, nickel price momentum slowed down slightly. However, the short-term slide in June came as a result of a general downtrend in base metals. LME nickel prices remain in a long-term uptrend since June 2017.

Nickel long-term prices. Source: MetalMiner analysis of FastMarkets

Buying organizations can expect higher prices in the coming months.

MetalMiner previously recommended buying some volume forward. Given the current uncertainty in the steel and stainless industries, nickel prices remain supported for the short term.

A fundamental tightness in the nickel market has also added support to the latest nickel price increases.

President Rodrigo Duterte of the Philippines announced a possible halt to mining in the country due to environmental damage. In June, 23 out of 27 mines passed an environmental review, easing the uncertainty of supply. However, nickel supply uncertainty still remains as a result of environmental measures.

Domestic Stainless Steel Market

Following the recovery in stainless steel momentum, domestic stainless steel surcharges increased again this month.

The 316/316L-coil NAS surcharge reached $1.06/pound, while the 304/304L went up to $0.7698.

Source: MetalMiner data from MetalMiner IndX(™)

The pace of stainless steel surcharge increases appears to have recovered its previous level again this month. Stainless steel surcharges remain in a clear uptrend and appear well above 2015-2017 lows.

What This Means for Industrial Buyers

Stainless steel momentum slowed down slightly this month. However, both steel and nickel remain in a bull market. Therefore, 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, take a free trial to our Monthly Outlook now.

Actual Stainless Steel Prices and Trends

Chinese 304 stainless steel coil prices fell this month by 5.91%, while Chinese 316 stainless steel coil prices fell by 4.98%.

Chinese Ferrochrome prices decreased this month by 1% to $1,970/mt. Nickel prices fell 1.38% to $15,000/mt.

The Raw Steels Monthly Metals Index (MMI) fell two points this month, dropping to 90 from the previous 92 reading.

Domestic steel price momentum continued, as domestic steel prices increased again. Chinese steel prices also increased in June, adding support to domestic steel prices.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

Domestic steel prices remain at a more than seven-year high.

Source: MetalMiner data from MetalMiner IndX(™)

Steel prices also increased at the beginning of July (except for HDG, which dropped slightly). The pace of the increases seems to have slowed, but prices remain in an uptrend. Therefore, buying organizations can expect high steel prices.

However, the historical cyclicality may move prices lower at some point.

Domestic steel prices have stayed in a sharp uptrend since January 2018. Current prices have started to trade more sideways. Despite the increase in prices, prices may begin to come off slightly at some point this year. Buying organizations may want to identify that moment to commit to purchases and reduce risks.

The Spread

The CRC-HRC domestic spread appears to be back at its historical level.

The domestic spread should be around $100/st. However, in 2016 the spread started to increase, reaching more than $200/st. The spread currently stands at $111/st.

Source: MetalMiner data from MetalMiner IndX(™)

Chinese Steel Prices

Chinese steel prices recovered from a previous downtrend and increased again in June.

Early July price indications show slightly lower prices. However, Chinese steel prices appear to be in a recovery uptrend.

All Chinese forms of steel have dropped slightly so far in July (except HDG prices, which inched higher).

Source: MetalMiner data from MetalMiner IndX(™)

Chinese steel output increased again in May, despite steel product exports dropping around 20% during the first four months of the year. Strong Chinese domestic demand has kept mills running at full capacity.

However, Chinese steelmakers are currently seeking alternative markets, such as Africa and South America.

What This Means for Industrial Buyers

Since steel prices remain high, buying organizations may want to closely follow price movements to decide when to commit to mid- and long-term purchases.

Buying organizations looking for more clarity on when to buy and how much to buy may want to take a free trial now to our Monthly Metal Buying Outlook.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

Actual Raw Steel Prices and Trends

The U.S. Midwest HRC 3-month futures price fell this month by 5.86%, falling to $852/st.

Chinese steel billet prices decreased again this month by 0.17%, while Chinese slab prices fell further by 3.72%, moving to $640/mt.

The U.S. shredded scrap price closed the month at $371/st, trading flat from last month’s reading.

The July Aluminum Monthly Metals Index (MMI) fell six points, falling to April 2018 levels. The Aluminum MMI now stands at 95 points.

Buying Aluminum in 2018? Download MetalMiner’s free annual price outlook

LME aluminum prices fell in June and have continued to slide so far in July.

However, the rate of the declines has slowed.

Price changes do not appear sharp and selling trading volume remains weak. The price decrease looks like a retracement after the peak in April due to Russian sanctions.

Source: MetalMiner analysis of FastMarkets

LME aluminum prices have fallen toward December 2017 and April 2018 lows. These levels served  as a support to aluminum prices both times, and could cause aluminum prices to bounce back after reaching support.

Global Aluminum

At least for the short term, it appears as though trade policies will impact the global aluminum market.

After the U.S. tariffs on steel and aluminum in March, plus additional sanctions on Russia, aluminum now waits for its next cue.

Canada announced punitive measures on C$16.6 billion ($12.63 billion) worth of American goods in response to U.S. tariffs. The measures will stand until Washington changes the current aluminum and steel tariffs on Canada. Europe also responded to the U.S., approving provisional measures.

Russia became the seventh complainant to ask for a consultation with WTO members against the U.S. duties on steel and aluminum. China, India, the E.U., Canada, Mexico and Norway previously filed similar complaints.

SHFE Aluminum

Chinese SHFE aluminum prices decreased slightly in June, following the LME aluminum trend.

The slide appears less sharp than for LME aluminum prices, but still follows the main short-term downtrend.

Source: MetalMiner analysis of FastMarkets

U.S. Domestic Aluminum

As a result of ongoing uncertainty in the aluminum market, U.S. Midwest aluminum premiums have skyrocketed this year.

July’s premiums, however, have held flat since last month at $0.20/pound. Current levels remain  at more than four-year highs.

Source: MetalMiner data from MetalMiner IndX(™)

What This Means for Industrial Buyers

Despite the recent downtrend, the LME aluminum price trend suggests a continuation of the bull market that started last year.

Tariffs, sanctions and the latest tariff non-exemptions to Canada, Mexico and the E.U. may add support to rising prices, both for LME aluminum and the U.S. Midwest premium. Adapting the right buying strategy becomes crucial to reducing risks.

Buying organizations that want to start doing so now may want to take a free trial now to our Monthly Metal Buying Outlook.

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

Actual Aluminum Prices and Trends

The Aluminum MMI basket generally fell this month. LME aluminum prices decreased this month by 5.51%, with a closing price in June of $2,160/mt.

Meanwhile, Korean Commercial 1050 sheet fell by 1.38%. Chinese aluminum primary cash prices decreased by 7.21%, while Chinese aluminum bar just fell 5.22%. Chinese aluminum billet prices also decreased 5.30% this month, down to $2,323/mt.

The Indian primary cash price fell by 7.36% to $2.14/kilogram.

In July, the Copper Monthly Metals Index (MMI) fell by three points, falling to its lowest value since October 2017. The Copper MMI currently stands at 81 points. The decrease came as a result of falling LME copper prices as well as other elements that make up the Copper MMI.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

Source: MetalMiner analysis of FastMarkets

So far, LME copper prices have followed last month’s downtrend.

LME copper prices have remained in a short-term downtrend since prices peaked in June at $7,316/mt. Since then, LME copper prices have fallen by more than 12%.

The downtrend appears sharp, as copper prices have fallen to October 2017 levels. However, trading volumes do not appear in the same sharp downtrend, instead looking flat. Therefore, copper prices may just be seeing a bigger buying dip, caused by weaker summer demand and trade tensions.

Trade Tensions Also Affecting Copper

Copper prices have also struggled this month due to trade tensions between China and the U.S.

China accounts for almost half of global copper consumption, estimated at around 24 million tons. Fewer Chinese exports also affect copper prices.

Copper investors seek to reduce risk until the trade tension abates. This, together with weaker demand in China, have supported the downtrend.

Chinese Scrap Copper

Since the announcement of the ban on copper scrap in China last summer, MetalMiner has followed Chinese copper scrap prices closely.

Source: MetalMiner data from MetalMiner IndX(™)

LME copper prices and Chinese copper scrap prices tend to follow the same trend. Both appear to be in a long-term uptrend. However, both LME copper and scrap copper prices fell again this month. Despite both following the same short-term downtrend, the spread has widened. The wider the spread, the higher the copper scrap consumption, and therefore, the price.

However, Chinese the copper scrap ban has boosted copper production in other forms.

In May, Chinese copper imports reached their highest levels in 17 months, with imports totaling 475,000 tons of unwrought copper and copper products. Strong manufacturing and construction sectors have led Chinese demand.

What This Means for Industrial Buyers

Despite the recent dip, LME copper prices remain in a long-term uptrend.

Buying organizations reading the Metal Monthly Outlook had the opportunity to identify a buying signal at the beginning of April and reduce price risk by purchasing some volume. For those who want to understand how to reduce risks, take a free trial now to the MetalMiner Monthly Outlook.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

Actual Copper Prices and Trends

In July, most of the prices comprising the Copper MMI basket decreased.

LME copper fell by 2.77% this month. Indian copper prices decreased by 2.81%, while Chinese primary copper prices fell further by 3.40%.

Prices of U.S. copper producer grades 110 and 122 decreased by 2.62%. Meanwhile, the price of U.S. copper producer grade 102 fell by 2.49%, to $3.91/pound.

So far in June, base metal prices have increased. Copper, zinc and tin increased sharply. Meanwhile, aluminum and nickel also increased, but a little less dramatically.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

Copper Rally

Copper prices breached the $7,300/mt level. Prices trading over this resistance level signals strength for the metal.

Source: MetalMiner analysis of FastMarkets

Copper has also outperformed in China, which may support copper prices longer.

Chinese copper imports have surged since the beginning of the year. According to Chinese customs data released at the beginning of this month, copper imports increased to 475,000 tons. The 22% increase compared to April imports marks the highest total in more than 17 months.

A strong copper appetite for the biggest world consumer, China, adds support to the current copper uptrend.

Zinc Price Rise

Zinc prices also increased this month. Zinc prices started a short-term downtrend in February. However, prices started to increase again this month.

Trading volumes seem strong, which could signal additional price strength.

Source: MetalMiner analysis of FastMarkets

Zinc prices remain in a long-term rally, which started at the beginning of 2016. During this rally, zinc prices have reached more than 10-year highs.

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

What This Means for Industrial Buyers

Buying organizations should remember that industrial metals remain in a bullish market. Commodities increased, while the U.S. dollar showed weakness again. Therefore, base metals could continue to increase in the medium term.

Buying organizations reading the Metal Monthly Outlook had the opportunity to identify some buying signals at the beginning of April to reduce price risk by purchasing some volume.

For those who want to understand how to reduce risks, take a free trial now to the MetalMiner Monthly Outlook.

The Raw Steels Monthly Metals Index (MMI) increased three points this month, moving up for a June reading of 92.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

Domestic steel price momentum seems to keep going, with domestic steel prices increasing again. Chinese steel prices also increased in May, adding support to higher domestic steel prices.

Domestic steel prices remain at more than seven-year highs.

Source: MetalMiner data from MetalMiner IndX(™)

Steel prices also increased at the beginning of June. The pace of the increases seems to have slowed down, but prices remain in an uptrend.

Tariffs

June 1 served as the latest steel and aluminum tariff exemption deadline. However, on May 31 President Trump announced that no country exemptions will continue. Therefore, Canada, Mexico and the E.U. became subject to the steel and aluminum tariffs of 25% and 10%, respectively.

MetalMiner considered different policy scenarios with regard to tariffs. All of them — except a continued exemption of the steel tariffs — supported the U.S. domestic steel price increase. The current situation will support steel prices further.

Mexico has already hit back with trade tariffs on some other products (such as pork and bourbon) from the U.S.

Chinese Steel Prices

Chinese steel prices recovered from a  previous downtrend and increased again in May. Early June price indications also show higher prices and a recovery in Chinese steel prices.

Source: MetalMiner data from MetalMiner IndX(™)

Chinese steel prices fell in conjunction with their historical seasonal cycle, which appeared stronger due to the overcapacity closures and higher-than-expected production during the winter season in China. However, prices usually start to increase again around April-May, signaling the start of the construction season, when steel demand is high.

Despite recent price increases, Chinese steel remains cheaper than U.S. domestic steel (even with a  25% steel tariff). This comes down to the price run-up of U.S. domestic steel prices, which have moved toward 2012 highs.

Scrap Steel

Contrary to domestic steel price movements, domestic shredded scrap traded more sideways at the beginning of June. Price increases have slowed down, as shredded scrap prices moved toward 2014 levels.

Source: MetalMiner data from MetalMiner IndX(™)

However, given the current domestic steel price movements, buying organizations can expect higher shredded scrap prices in the coming months.

What This Means for Industrial Buyers

As steel prices remain high, buying organizations may want to follow price movements closely to decide when to commit to mid- and long-term purchases.

Buying organizations looking for more clarity on when to buy and how much to buy may want to take a free trial now to our Monthly Metal Buying Outlook.

Actual Raw Steel Prices and Trends

The U.S. Midwest HRC 3-month futures price increased this month by 12.4%, going up to $905/st.

Chinese steel billet prices decreased by 0.2%, while Chinese slab prices rose by 1.2%, moving to $665/mt.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

The U.S. shredded scrap price closed the month at $370/st, trading flat from last month’s reading.

The Stainless Steel Monthly Metals Index (MMI) skyrocketed this month, increasing by seven points. The current reading stands at 84.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

The index inched higher driven by the increase in stainless steel surcharges and a sharp increase in LME nickel prices in May. Other related metals in the stainless steel basket also increased.

LME Nickel

Nickel price momentum seems to have recovered again.

LME nickel prices increased at a quicker pace in May. The increases continued through the beginning of June, driving prices to 2014 highs. 

Source: MetalMiner analysis of FastMarkets

LME nickel prices keep moving away from 2017 lows.

MetalMiner previously recommended buying some volume forward. Given the current uncertainty in the steel and stainless industries, nickel prices remain supported for the short term.

In addition, a fundamental tightness in the nickel market has added support to the latest nickel price increases.

Domestic Stainless Steel Market

Following the recovery in stainless steel momentum, domestic stainless steel surcharges increased again this month. The 316/316L-coil NAS surcharge reached $1.02/pound.

Source: MetalMiner data from MetalMiner IndX(™)

The pace of stainless steel surcharge increases, however, appears to have slowed again this month. Yet stainless steel surcharges remain in a clear uptrend and rest well above 2015-2017 lows.

What This Means for Industrial Buyers

Stainless steel momentum appears stronger this month, as steel prices are skyrocketing. As both steel and nickel remain in a bull market, 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, take a free trial of our Monthly Outlook now.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

Actual Stainless Steel Prices and Trends

Chinese 304 stainless steel coil prices increased again this month by 2.02%, while Chinese 316 stainless steel coil prices rose further by 6.61%. Chinese Ferrochrome prices increased this month by 2.9%, to $1,990/mt.

Nickel prices increased by 10.5% to $15,210/mt.

The June Aluminum Monthly Metals Index (MMI) increased one point. The current Aluminum MMI index now stands at 101 points.

Buying Aluminum in 2018? Download MetalMiner’s free annual price outlook

LME aluminum prices showed strength in May, and are continuing to increase this month.

Aluminum has led the base metals complex due to U.S. tariffs and sanctions. These actions, in turn, create all sorts of ripple effects that impact global supply.

Source: MetalMiner analysis of FastMarkets

LME aluminum prices have reached 2012 levels. The base metal began its long-term uptrend in early 2016. Buying organizations need to identify buying dips to avoid costs and mitigate aluminum price risk.

Global Aluminum Industry

U.S. sanctions on some Russian aluminum companies raised concerns regarding global aluminum supply.

The sanctions increased volatility and moved LME aluminum prices to $2,716/mt (maximum value reached during a trading day). Sanctions eased, as the time frame moved out to October. Prices retraced, but remain high.

Other countries suspended aluminum buys from Russian companies, to supply aluminum products to the U.S. As an example, Japan’s UACJ Corporation, a major manufacturer of rolled aluminum products, suspended all of its aluminum purchases from Russia’s Rusal. The company claimed it found alternative supplies, but has not declared the sources.

Aluminum smelters have scheduled restarts, taking advantage of higher LME aluminum prices and supply concerns.

A Rio Tinto aluminum smelter in New Zealand will expand output this year after securing a new energy deal. The restart will take around six months, and will add 85 tons of daily production. This results in a 9% increase of annual output. Aluminum products will include aluminum ingot, billet and rolling block. Alumina comes from Australian refineries, and around 90% of the production in this region goes toward exports.

SHFE Aluminum

Last month, MetalMiner reported a possible increase in aluminum and aluminum product Chinese exports due to the shortages outside China.

Semi-finished Chinese aluminum exports increased by 20.5% in Q1 2018 and, if they maintain this pace, could hit a record. Therefore, SHFE aluminum prices may see some price increases in the short term.

Source: MetalMiner data from MetalMiner IndX(™)

Chinese SHFE prices rose by 4.8% in May. The increase appears higher than LME aluminum prices, but still follows the main long-term uptrend. SHFE aluminum prices have also increased this month.

U.S. Domestic Aluminum

As a result of the ongoing uncertainty in the aluminum market, U.S. aluminum Midwest Premiums increased again in June to $0.20/pound, climbing to a more than four-year high. Last month, the U.S. Midwest Premium fell for the first time since November 2017.

Source: MetalMiner data from MetalMiner IndX(™)

What This Means for Industrial Buyers

LME aluminum price trends suggest a continuation of the bull market that started last year.

Tariffs, sanctions and the latest tariff non-exemptions to Canada, Mexico and the E.U. add support to increasing prices, both for LME aluminum and the U.S. Midwest Premium.

Adapting the right buying strategy becomes crucial to reducing risks. Buying organizations that want to start doing so now may want to take 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

The Aluminum MMI basket generally increased this month.

LME aluminum prices rose this month by 2.7%, with a closing price in May of $2,286/mt. Meanwhile, Korean Commercial 1050 sheet increased by 3.72%.

Chinese aluminum primary cash prices fell by 0.7%, while China aluminum bar remained flat. Chinese aluminum billet prices also traded flat this month, at $2,453/mt.

The Indian primary cash price rose by 1.76% to $2.31/kilogram.