The April Aluminum MMI (Monthly Metals Index) fell three points. A weaker LME aluminum price led to the price retracement. The current Aluminum MMI index stands at 94 points, 3% lower than in March.
LME aluminum price momentum slowed again this month. LME aluminum prices remain in a current two-month downtrend.
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[caption id="attachment_91252" align="aligncenter" width="580"]
Source: MetalMiner analysis of FastMarkets[/caption]
Though some may want to declare a bearish market for aluminum, prices are still over the $1,975 level, when MetalMiner recommended buying organizations buy forward. Prices may retrace back toward that level. However, if prices fall below the blue-dotted line, aluminum prices could shift toward bearish territory.
SHFE Aluminum
SHFE aluminum spot prices also fell this month. The degree of the decline appears less sharp than for LME prices. However, SHFE aluminum spot prices started to fall in October 2017.
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Source: MetalMiner data from MetalMiner IndX(™)[/caption]
Shanghai Futures Exchange (SHFE) aluminum stocks fell in March for the first time in more than nine months. Decreasing stocks sometimes point to falling inventories of aluminum in China, the world’s biggest aluminum producer and consumer. SHFE stocks dropped by 154 tons in March, according to exchange data released at the beginning of April. However, SHFE aluminum stocks still stand at 970,233 tons.
MW Aluminum Premiums
Meanwhile, U.S. Midwest aluminum premiums fell for the first time since November 2017. The $0.01/pound drop at the beginning of April comes after a sharp uptrend in the premium. Despite the lower premium this month, the pace of the increases may continue for some time.
What This Means for Industrial Buyers
LME aluminum price retracement may give buying organizations a good opportunity to buy, as prices may increase again.
However, as prices are currently trading lower, buying organizations may want to wait until the market shows a clearer direction. Therefore, adapting the “right” buying strategy becomes crucial to reducing risks.
Given the ongoing uncertainty around aluminum and aluminum products, buying organizations may want to take a free trial now to our Monthly Metal Buying Outlook.
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Actual Aluminum Prices and Trends
Category: Metal Prices
Copper MMI: LME Copper Prices Fall
The Copper MMI (Monthly Metals Index) traded lower again this month, falling two points to 85. The Copper MMI dropped to December 2017 levels, driven by falling LME copper prices.
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When looking at the long-term trend, copper prices have held above the dotted blue line since September 2016. Although prices dipped a bit below the blue dotted line at the end of March, the line represents the current copper floor. Prices falling below the dotted line could suggest a short-term price correction.
[caption id="attachment_91215" align="aligncenter" width="580"]
Source: MetalMiner analysis of FastMarkets[/caption]
Meanwhile, trading volume appears to be about the same as last month, when selling volume appeared weak. As the selling volume remains weak, the downtrend seems more like a short-term price correction than a change of trend.
Buying organizations may want to closely follow copper prices in the coming month or read our Monthly Metal Outlook in order to anticipate copper price movements.
Copper Stocks and Supply
LME copper stocks currently stand at 324,900 tons, up by 13,075 tons since the start of 2017 and 85,500 tons since the start of 2016.
According to the International Copper Study Group (ICSG), the provisional 2017 refined copper deficit was 163,000 tons. The situation for 2018 will also depend on the supply side, as many of the largest copper mines have upcoming labor contract negotiations still pending.
On top of that, the Caserones copper mine in Chile announced a shutdown this month in order to replace a leaking pipe. However, this shutdown is only partial and may not have a big effect on copper production.
Copper Scrap
Both Chinese copper scrap prices and LME copper prices typically trade together. In March, Chinese copper scrap prices fell to $6,035/mt. LME prices also fell but remain in a long-term uptrend. The same is true for copper scrap.
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Source: MetalMiner data from MetalMiner IndX(™)[/caption]
The spread between Chinese scrap copper prices and LME copper seems to be wider than it was back in 2016 and 2017. A wider spread may boost scrap copper demand for the applications that it are suitable due to its lower price.
What This Means for Industrial Buyers
Copper prices are currently approaching December support (at $6,530/mt) levels, when prices last dipped during the bullish rally.
Buying organizations bought some volume then. As long as copper prices remain bullish, buying organizations may want to buy on the dips. For those who want to understand how to reduce risks, take a free trial now to the MetalMiner Monthly Outlook.
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Actual Copper Prices and Trends
Week in Review: DRC Mining Charter, Hong Kong Housing and MMI Week
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Rare Earths MMI: Metals Prices Move Up, Demand for Neodymium Grows
The Rare Earths Monthly Metals Index (MMI) picked up a point this month, rising from 20 for an April reading of 21.
The basket of metals posted price gains across the board this past month.
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Yttrium rose 1.2%, while terbium oxide rose 1.6%. Neodymium oxide rose 0.2%, europium oxide was up 1.3% and dysprosium oxide was up 0.8%.
Growing Demand for Neodymium
A move by Tesla to a magnetic motor for its Model 3 Long Range car, Reuters reported last month, will add pressure on an already constrained neodymium market.
According to the research group imarc, the market for the neodymium-iron-boron magnet used for the magnetic motors is now worth more than $11.3 billion, Reuters reported.
Global demand for neodymium exceeded supply by 3,300 tons, according to the report.
With the demand for electric vehicles growing more and more, so too will the demand for rare-earth metals like neodymium. Complicating the supply landscape, however, is China’s total dominance in the rare earths market. Given rising trade tensions, stemming from the Trump administration’s recent Section 232 steel and aluminum tariffs, plus the recent Section 301 announcement — the Office of the United States Trade Representative yesterday posted a proposed list of Chinese products that could be subject to tariffs — the neodymium supply market is something to be monitored.
As Reuters notes, China previously instituted a neodymium export ban, which was lifted in 2015 — could it happen again? That remans to be seen, but increasingly inflamed global trade relations certainly don’t do anything to tamp down the possibility.
Speaking of Trade Tensions…
Bloomberg speculated last month on ways China could retaliate against the U.S. should the latter eventually impose tariffs on Chinese goods amounting to potentially $50-$60 billion.
The article notes that in 2010, China stopped giving Japan export licenses for rare earth metals used in cars and electronics, as a result of tensions related to islands in the East China Sea.
Again, it remains to be seen what the rising tensions mean for the rare-earths market, but it is certainly worth monitoring going forward.
Searching from Above
In the search for new deposits of rare earths (and metals, in general), scientists are looking from a bird’s eye view — or, rather, a drone’s eye view.
According to a report in The Guardian, German scientists are using drones to scout out potential new sources of metals. The scientists are using drones, equipped with special cameras and sensors, to identify potential deposits based on the unique reflections of light various minerals produce, according to the report.
As noted above, the demand for rare earth materials is only going to increase, not just for application in electric vehicles, but also in other high-tech products.
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Actual Metal Prices and Trends
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