Articles in Category: Non-ferrous Metals

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Standing in for Fouad Egbaria, here is your morning in metals, folks.

Aluminum Highlights

Feeling behind on aluminum industry activity and economic drivers? Look no further than the Aluminum Association’s latest comprehensive rundown, including import trends and key raw material inputs such as energy.

According to their highlights, the majority of aluminum imports into the U.S. are in ingot form. “After three consecutive months of declining volumes, ingot imports increased 1.8 percent month-over-month in July,” the report states, citing U.S. Census Bureau figures. “Nevertheless, imports of ingot increased 19.0 percent year-over-year in July, and are up 22.7 percent year-to-date over the same period in 2016. While the growth has occurred across the spectrum of ingot importing countries, the largest year-to-date increases have originated from South Africa, India, and Australia.”

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EPA Clean Power Plan: Trump Takes Over Obama’s ‘Fuzzy Math’

President Trump made quick moves to ax the Clean Power Plan, whose benefits the previous administration said would dwarf its costs (of which, MetalMiner speculated, there would be many).

Now, Trump and his EPA chief, Scott Pruitt, are trying to massage the numbers behind those costs and benefits — and it may be a tough proposition to get things right.

Electric Cars All the Rage?

Arnoud Balhuizen, chief commercial officer at BHP, was quoted by Reuters as saying on Tuesday that 2017 will be a “tipping point” for electric cars, adding that “the impact for raw materials producers would be felt first in the metals markets and only later in oil,” according to the news service.

“In September 2016 we published a blog and we set the question – could 2017 be the year of the electric vehicle revolution?” Balhuizen said in an interview, Reuters reported.

Free Download: The September 2017 MMI Report

MetalMiner’s correspondent in India, Sohrab Darabshaw, will have an upcoming piece later this week about how that very revolution is shaping up in the world’s second-most populous country – stay tuned!

India has bucked the global trend where non-ferrous metals are concerned.3

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A recent report by professional services agency KPMG has said demand for non-ferrous metals, including aluminum and copper was likely to grow around 8% over the next five years.

Titled “India Non-ferrous metals industry: Building the future,” the report added that the expected demand growth in the non-ferrous metals industry would be even better than the “healthy trend” observed in the last five years.

“Over 2016-17 to 2021-22, the demand for these metals is expected to grow by around 8% in line with strong economic prospects, thrust on manufacturing sector, healthy growth in key end-use segments further aided by rising usage intensity,” the report states.

What’s more, the report said India had also registered strong growth in recycling of metals, a major step forward for an otherwise unregulated sector. It said over time, the share of recycled metals had increased considerably and was almost equivalent to the global level.

But KPMG added a note of caution, saying legislative intervention was required to contain the level of scrap imports that still dominated the globe.

It’s no secret that globally, the non-ferrous metal industry faced a turbulent time owing to a number of factors, including the global economic growth slowdown at large, as well as the slowdown of the Chinese economy, in particular, along with the high raw material prices.

But India went the other way.

The KPMG report added that “strong resilience in the Indian economy” had resulted in its non-ferrous metal industry outpacing the global trend. Apart from a strong demand base and future potential, India was rich in terms of raw material reserves coupled with a relatively low-cost structure of production, thereby providing huge opportunity for the development of non-ferrous metals industry in India.

That said, downstream products, such as copper wire and aluminum foils, were still being dominated by imports, as the downstream industry is relatively undeveloped in India.

China, with its sheer population as well as advancement of manufacturing, was the largest consumer of non-ferrous metals and majorly influences the dynamics of the industry. But the recent slowdown in that country has significantly impacted the global industry in terms of supply and demand, trade, prices and profitability. The country accounts for 52% of the global aluminum consumption. In Asia, consumption showed a declining trend in Japan, but was counteracted by higher demand from India and the Middle East. The report said North America had also firmed up since the global financial crisis. Prices had recovered because of supply cuts in China and a healthy demand growth.

In India, with steady growth in demand, non-ferrous metals were being consumed in several emerging applications offered by defense, aerospace, hybrid and electric vehicles, railways, and more, requiring complex design (be it large aerostructure parts or miniature structural components). However, lately there has been technological disruption in multiple industries, including metals, such as metal additive manufacturing or 3D printing, which offered the possibility of complex parts production at a faster pace and lower cost, the report observed. There were a number of industries which were increasingly using these technologies to revolutionize the manufacturing process.

A well-developed non-ferrous metals industry is vital for any developing country, as it provides important raw material to many industries that are the pillars of economic development. With the increasing usage of these metals in several existing and emerging applications, coupled with new technologies, there is a paradigm shift that can change the way non-ferrous metals are consumed in the future.

The KPMG report provides a glimpse of opportunities that are available for the development of the non-ferrous metals industry in India, which is riding strong economic growth momentum.

With a slew of reforms undertaken by the government, the end-use sectors of non-ferrous metals —automotive, electricals, packaging, consumer durables, railways, ports and inland waterways, roadways and renewable energy  — were expected to experience a strong growth trajectory.

However, certain metals were characterized by import, especially downstream products such as copper wire and aluminum foils, because of various reasons, including the undeveloped downstream industry, global competition and quality availability.

Aluminum

During 2011-12 to 2016-17, the demand for aluminum posted a CAGR of 5.4% led by a healthy growth recorded by the electrical and automotive sectors, which constitutes 60-65% of the total consumption of aluminum.

Primary aluminum demand was generally met through domestic supply, but there was considerable import of downstream products from China and the Middle East. Many players in the aluminum downstream industry were suffering from a lack of proper infrastructure and technology to efficiently process the raw material into high-quality products.

Significant capacity addition has taken place over the past five years due to implementation of various capacity addition plans by the major players. During 2011-12 to 2016-17, capacity has increased from 1.9 million tons per annum to 4.1 million tons per annum.

Copper

Demand for primary copper grew at a CAGR of 14% over the past five years, owing to the robust growth in the electrical sector and consumer durables.

Although India was a net exporter of copper, there was a significant proportion of import of downstream products. Many players in the copper downstream industry faced challenges such as outdated technology, improper infrastructure, high set-up cost, high funding cost and lack of skilled professionals.

During 2011-12 to 2016-17 copper imports, constituting mainly downstream products and alloys, grew at a CAGR of 15.4%.

Zinc

Demand for primary zinc in India was based on the growth of the steel market, which accounts for 70% of the total demand. It was mainly used in galvanizing and coatings of iron and steel to protect it from corrosion.

Free Download: The September 2017 MMI Report

During 2011-12 to 2016-17, demand for zinc grew at a CAGR of only 3%, mainly because of a surge in imports of galvanized steel.

In order to control imports, the government imposed a minimum import duty on certain steel products, in addition to a safeguard duty and anti-dumping duty.

In 2016-17, India’s imports of galvanized and coated steel fell by 47% compared to the previous year as a result of these supportive government policies.

Other government initiatives, such as the Smart Cities Mission, modernization of railways and the construction of highways were expected to boost the infrastructure industry, which uses galvanized steel for durability and endurance.

This morning in metals news, a new European steel giant could be coming on the scene, that giant could result in the loss of thousands of jobs and aluminum hits a five-year high ahead of further Chinese supply cuts.

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Tata Steel, ThyssenKrupp Agree to Merge European Operations

The New York Times reported Wednesday that Tata Steel and ThyssenKrupp had agreed to a deal to merge their European steel operations — a merger that has been in the news for more than a year.

According to the report, while there are still some obstacles to completion of the merger, if it goes through the merged operation would make the second-largest steelmaker in Europe, behind only ArcelorMittal.

Merger Could Yield Loss of 4K Jobs

While the potential merger of the Indian steel giant Tata and German firm ThyssenKrupp’s European operations might be cause for celebration for some, it won’t be for a considerable number of workers, according to one report.

The merger of the two firms’ European operations could lead to the loss of 4,000 jobs, according to CNNMoney.

The merger is expected to cut costs by between €400 million and €600 million ($720 million) a year, according to the report.

Aluminum Soars to Five-Year High

Aluminum continued its strong 2017, hitting a five-year high, Reuters reported.

Not surprisingly, news from China has much to do with the rise, as supply cuts are forthcoming from Chinese producer Chinalco, according to the report.

Free Download: The September 2017 MMI Report

LME aluminum traded at $2,191 per ton, its highest since September 2012, according to Reuters.

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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.

Free Download: The September 2017 MMI Report

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.

Our September MMI report is in the books — overall, it was another strong month for metals.

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For our latest batch of readings, all 10 of the MMI sub-indexes posted upward movement.

It was a big month for aluminum, as the Aluminum MMI rose 8.2% and LME aluminum jumped 10.73% through the month. The Construction and Automotive MMIs also had solid months, while the Copper MMI shot up 7.7% in what was another good month for Dr. Copper.

Meanwhile, in policy news, last week the U.S. Department of Commerce launched an anti-dumping and countervailing duty investigation into stainless steel flanges from China and India. As our Irene Martinez Canorea wrote in her Stainless MMI report, a preliminary determination in the case is coming Oct. 2.

In addition, today the DOC announced it had launched an investigation into imports of titanium sponge from Japan and Kazakhstan.

More broadly, the Section 232 investigations into aluminum and steel imports are still ongoing. It’s unclear when exactly a ruling will be made, but Secretary of Commerce Wilbur Ross has January deadlines to meet, as he is required to present President Donald Trump with a report and policy recommendations vis-a-vis the probes.

Free Sample Report: Our Annual Metal Buying Outlook

You can read about all of the aforementioned — and much more — by downloading the September MMI report below.

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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.

Free Sample Report: Our Annual Metal Buying Outlook

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 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.

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India’s aluminum production is expected to grow at a compound annual growth rate (CAGR) of 3.5% in the next 2-3 years to cater to a rise in domestic demand, according to a new report.

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CARE Ratings’ report titled “Aluminium Industry: The Silver Knight of the Economy,” said that what would propel this growth are the various initiatives taken up by the Indian government, and the ramping up of smelter capacities. Surplus stock will continue to be exported, owing to its low-cost advantage.

So what will drive the growth? According to CARE, the growth in consumption is likely to be driven by the growth in power transmission and the automobile sector. While the demand from the building and construction and consumer durable segment is likely to remain subdued, demand from the packaging sector is likely to support the domestic demand.

CARE has estimated the prices of LME aluminum to range around $1,800/ton to $2,000/ton in the short- to medium-terms.

India is among the lowest cost producers of aluminum in the world, owing to easy availability of raw materials and comparatively low labor costs. The growing demand for aluminum in the last decade, driven by India’s underlying growth story, has resulted in expansion of smelting capacities of the major domestic players.

With the addition of new aluminum capacities, India aims at not only satisfying domestic demand, but also playing a major role in the global aluminum market.

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Bizarrely, although zinc prices have soared this year on the back of demand for galvanized steel for construction, further strength this week may have been heightened by a loss of investor appetite for those same steel products.

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Following booming steel prices this year, the Shanghai exchange increased trading charges last week in an effort to curb speculative activity. Steel prices have consequently slumped by 3.5% as investors got out of steel and into steelmaking raw materials with lower transaction charges, such as zinc.

Surging Shanghai zinc prices have in turn encouraged a rise in the London Metal Exchange price, hitting a peak of $2,994 per metric ton — not seen since October 2007, Reuters reports.

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