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Aluminum exports from Qatar hit a roadblock, and it could be some time before the situation is resolved.

According to a recent Reuters report, Egypt, Saudi Arabia, Bahrain and the United Arab Emirates cut ties with Qatar, leading to an aluminum manufacturing plant, partly owned by Norway’s Norsk Hydro, to seek other routes for export.

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The reason for top Arab nations breaking ties with Qatar? Alleged support of Islamic militants, which Qatar denies.

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European steelmakers are coming together to fight a common enemy: EU carbon reforms.

According to a recent report from Reuters, steelmakers across the continent are writing EU leaders, emphasizing they not burden the industry with what they feel are superfluous carbon emission regulation costs. Such costs, they argue, would put them at a competitive disadvantage with their global peers as well as increase the risk of job cuts and plant closures.

“You can avoid burdening the sector with high costs that will constrict investment, or that will increase the risk of job losses and plant closures in the EU,” the CEOs say in an open letter, obtained by Reuters, dated May 28, to EU heads of state and government.

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Nickel, along with zinc, could see a boost on the heels of the Chinese government cracking down on the steel industry.

According to a recent report from Reuters, nickel and zinc prices reached their highest point in more than two weeks with China cutting down on production of both metals.

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“The Chinese government is becoming quite aggressive in targeting environmental problems,” Oxford Economics commodities analyst Dan Smith told Reuters.

With supply in China in question, industrial demand for nickel continues to gain momentum, pushing prices for the metal up, along with prices of aluminum and zinc, according to a recent report from the Economic Times.

On the Multi Commodity Exchange, nickel for delivery in May rose by 0.6%, the Economic Times report stated.

Nickel Price Forecast for 2017

Nickel prices at future trade are also being supported by a boost in demand from alloy producers in the spot market, according to the news source.

How will nickel and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:

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The International Lead and Zinc Study Group released its Spring 2017 meetings/forecasts report, which found global demand for refined zinc metal is expected to increase 2.6% to 14.30 million tons this year.

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The ILZSG report stated: “There has been little change in European zinc demand over the past five years and further stability is anticipated in 2017 with increases in Belgium, Italy and the Russian Federation being partially offset by a decline in France resulting in an overall rise for the region of a modest 0.7%.”

Furthermore, the ILZSG report found that a significant decrease in apparent demand in the United States last year was most likely influenced “by a drawdown in unreported stocks,” and it’s expected that apparent usage will recover this year to a level similar to what was seen in 2015.

Zinc Supply to Increase with Demand

After experiencing a decline of 5.5% last year, worldwide zinc mine production is expected to grow 6.7% to 13.70 million tons this year. Read more

Macro photo of a piece of lead ore

The International Lead and Zinc Study Group released its Spring 2017 Meetings/Forecasts, which found that global demand for refined lead metal will increase 2.3% this year to 11.39 million tons.

The main reason? Further development in Chinese usage, which is projected to grow 4.3%.

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The ILZSG report states: “After increasing by a robust 9.8% in 2016, usage of lead metal in Europe is expected to remain unchanged in 2017. A stable outlook is also foreseen in Japan and the Republic of Korea. In both India and the United States modest growth of 1.5% is predicted.”

Lead Supply Update

Furthermore, the ILZSG report states that global lead mine production is projected to increase 4.3% to 4.92 million tons this year, due in part to growth in China and increases in Canada, Mexico, India, Greece and Kazakhstan. Read more

Tin supply is tight on the London Metal Exchange, but is this an isolated issue or just one example of a more far-reaching dilemma?

Writing for Reuters, Andy Home cites LME tin at its lowest level in 20 years, but it’s important to look closer as any comparison to two decades in the past is null and void as the global metals market and LME’s place in it are so different now.

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Home writes: “Unsurprisingly, low inventory is once again generating tightness across short-dated time-spreads, extending a pattern that has been running for a couple of years now.”

He adds that tin price is underperforming as well, currently trading just under $20,000 per ton. This is a 5% decrease when compared to the start of the year, placing it with nickel as the worst performer among significant LME metals.

However, Home writes that there is now more tin inventory in Shanghai Futures Exchange warehouses than in the LME system. Read more

Aluminum Rod

Goldman Sachs is bullish on aluminum, projecting it to rise following China’s supply-side reforms.

According to a recent report from CNBC, Goldman expects aluminum prices to hit the $2,000 per metric ton point in six months and $2,100 per ton in a year.

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Year-to-date, aluminum prices have outperformed other industrial metals, climbing roughly 15% compared to steel and 3% compared to copper, the news source stated.

“In our view, this strong performance has reflected an increase in the potential for aluminum to be the next target of supply-side reform in China, a tightening ex-China balance, and rising costs of production,” wrote the bank’s analysts. “Further, global political developments may also be supportive of capacity and production cuts, given the two leaders of the U.S. and China launched a 100-day (trade) plan on April 7. These developments support our existing view that aluminum is the next target for supply-side reform in China,” they added. Read more

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Pittsburgh-based U.S. Steel saw its market value reduced by 27% from investors following a surprising first quarter loss.

According to a recent report from the Pittsburgh Post-Gazette, U.S. Steel also announced plans to spend more than $1 billion in upgrades to plants in Mon Valley and beyond.

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“This is not a quarter-to-quarter play,” David Burritt, president and chief operating officer, told investors, concerning investment in the mills. “We’re in this for the long haul. It takes more than a little bit of courage to take this action right now.”

Analysts are encouraged by the investment, but they are also concerned the time frame for the project will prevent U.S. Steel from taking advantage of the surging demand in steel that many are expecting on the heels of President Donald Trump’s promises to support the steel industry.

Chinese Demand for Steel Growing?

Our own Raul de Frutos recently wrote about the current industrial metals bull market and whether or not he still sees an upside. Pertaining to steel specifically, de Frutos wrote that China’s government recently announced plans to build a new urban metropolis from the ground up, which would significantly boost the demand for steel and other metals.

De Frutos wrote: “This growth translates into solid demand for industrial metals at the same time as China applies stricter anti-pollution rules and supply-side reforms designed to cut capacity in energy-intensive sectors like steel and aluminum. Overall, while we continue to see strength in Chinese markets, we are not ready to call peak in this industrial metals bull market.”

How will steel and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:

Nickel prices reached a 10-month low this week due in part to concern over demand from China, a top consumer of the metal.

According to a report from Reuters, these concerns were supported by Chinese trade data, indicating falling imports on the alloying material used to make stainless steel.

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Nickel traded on the London Metal Exchange ended Wednesday at $9,225 per metric ton, its lowest mark since June of last year.

John Meyer, SP Angel analyst, told the news source he anticipates nickel to be supported by concern over supplies of ore from the Philippines, which recently announced the ordered closure of more than half its mines in order to protect water sources.

“There is still a lot of stock for the market to burn,” Meyer told Reuters.

Nickel Trailing Other Industrial Metals

Our own Raul de Frutos wrote earlier this month of the downward pressure seen on nickel prices during Q1, which is in stark contrast to other industrial metals that have rallied during that same time.

Wrote de Frutos: “Nickel prices are struggling to make headway this year. Nickel’s supply narrative is rather complex and it’s exposed to significant changes depending on what policy makers in Indonesia and The Philippines do next. On the other hand, stainless buyers should continue to monitor their price risk exposure. Investors’ sentiment on industrial metals remains bullish and that could still trigger unexpected prices swings on the upside.”

How will nickel and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:

The MetalMiner analyst team alerted subscribers and trialers last week to significant movement on the zinc front. Prices for the non-ferrous metal have pulled back over the past several weeks, and are now trading near key support levels.

Wrote our own Raul de Frutos: “The price weakness seems to come from longs exiting their positions rather than shorts coming to the market. This suggests that sentiment hasn’t shifted to bearish for now. This could be a good opportunity to time purchases (3-5 months’ worth of demand) while prices trade near $2,500/mt.”

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While many may panic and see this price decline as the end of zinc’s bull run, de Frutos sees this movement as an ideal opportunity to make purchases at an attractive price.

de Frutos added: “After doubling in price since the beginning of 2016, prices are now struggling in the $3,000 per metric ton level. However, the price weakness seems to come from long position buyers exiting those positions rather than shorts coming to the market. This suggests that sentiment hasn’t shifted to bearish for now. At the same time, we see strong support near $2,500/mt, which could provide a good opportunity to time purchases.”

How will zinc and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds: