Articles in Category: Non-ferrous Metals

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This morning in metals news, China’s aluminum production dipped in August compared with the previous month, China plans to bring its first domestically developed sources of medical cobalt-60 to the market and copper prices are down.

China Aluminum Production Falls

China’s August aluminum production fell compared with the previous month, Reuters reported.

The country saw its aluminum production fall 0.5% compared with July production, down to approximately 2.97 million tons, according to Reuters.

Sources of Cobalt-60 to Go to Market

China plans on bringing its first domestically developed sources of medical cobalt-60 to the market, state news agency Xinhua reported.

According to Xinhua, the cobalt-60 will be used to produce gamma knives used for cancer treatment.

Copper Prices Fall

Impacted by a slowdown in Chinese industrial activity, copper prices fell to start the week, Reuters reported.

Three-month LME copper slipped 1.5% down to $5,887 per ton.

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The Copper Monthly Metals Index (MMI) dropped three points in August down to 71, with all prices in the index losing value.

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LME copper prices traded lower in August following the precipitous price drop early in the month.

Source: MetalMiner analysis of London Metal Exchange (LME) and FastMarkets

The price dropped again in early September to new lows for 2019, prior to moving back to the $5,800/mt price level during the past week.

SHFE Prices Trade Sideways

Source: MetalMiner analysis of FastMarkets

Since June, SHFE prices have traded in a narrow band in the CNY 46,000/mt to CNY 48,000/mt price range, indicating a lack of demand recovery.

Global Demand Still Looks Weak

Demand concerns continue to weigh on copper prices. Meanwhile, trade issues also continue to impact the metal’s price volatility.

Demand in China, the world’s largest copper consumer, still looks weak as the government continues to implement measures to bolster the economy.

The China Association of Automobile Manufacturers (CAM) released poor automotive sales numbers for August. Like copper, the automotive industry may serve as a good barometer of consumer demand, given its overall weight in total consumer spending.

Total sales dropped by 6.9% in August compared to July. Further, the organization warned the sales outlook looks weak, Reuters reported. Refined copper cathode production dropped by 0.5% compared with July, according to the same report.

What This Means for Industrial Buyers

In last month’s Copper MMI, we provided a list of copper products included on the list to be impacted by the U.S. implementation of 301 WTO tariffs of up to 100% on imports from Europe. As a result of these proposed tariffs, copper product imports, as well as domestically produced copper semis, may face serious price increases.

As of now, copper appears to remain on that list. Industrial buyers will want to continue to track developments in the case.

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Buying organizations seeking more insight into longer-term steel price trends should read MetalMiner’s Annual Metal Buying Outlook.

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Actual Copper Prices and Trends
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Copper prices dropped more significantly this month, with all prices showing declines.

The LME primary three-month price dropped by 5.3% to $5,637/mt.

Korean copper strip dropped by 4.7% to $7.79/kilogram.

Chinese prices decreased by more than 4%. China’s copper wire price dropped most, by 4.7%, to $6,484/mt. The primary cash and copper bar prices dropped by 4.3% to $6,488/mt and $6,479/mt, respectively.

The Indian copper cash price dropped by 4.4% to $6.14/kilogram.

U.S. prices in the index decreased more mildly. U.S. producer copper grade 110 and grade 122 decreased by 2.6% to $3.34/pound for both grades, while grade 102 dropped by 1.7% to $3.56/pound.

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner:

Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.

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This morning in metals news, China spared U.S. soybeans and pork imports from tariffs, copper prices gained on the current tenor of trade news and Chinese iron ore rose to a five-week high.

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China Exempts Pork, Soybeans from Tariffs

China announced it will exempt imports of U.S. soybeans and pork from tariffs, MarketWatch reported, as the two countries aim to move toward a resolution to their long-simmering trade differences.

Trade talks between the countries are scheduled to resume in early October.

Copper Prices Rise

Copper prices made gains to close the week amid the latest seemingly positive news coming out of the ongoing U.S.-China trade saga.

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LME three-month copper was bid up 1.1% on Friday, reaching $5,895 per ton, Reuters reported.

Iron Ore Rises to 5-Week High

Chinese iron ore prices surged to a five-week high, the Hellenic Shipping News reported, supported by restocking demand ahead of holidays in the country.

Iron ore futures on the Dalian Commodity Exchange rose as much as 3.9% on Thursday, up to 681 yuan ($96.08) per ton, according to the report.

The Aluminum Monthly Metals Index (MMI) dropped again this month, falling by one point to 83.

All but one of the prices tracked for the index dropped this month, with India’s primary cash price showing the biggest drop at 4.4%, followed by the LME primary 3-month price (down by 3.4%).

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LME aluminum prices weakened into early August and moved sideways until early September, when prices moved toward the $1,800/mt range.

Source: MetalMiner analysis of London Metal Exchange (LME) and FastMarkets.

SHFE Aluminum Prices Gained Recently, But Momentum Looks Weak

Source: MetalMiner analysis of Fastmarkets

SHFE aluminum prices increased recently, but upward momentum still looks weak, comparatively speaking.

Overall, the price is still moving in a sideways band below the CNY 14,500/mt level where it has traded during the past year or so; however, it looks set to break through this resistance price soon.

As reported by MetalMiner’s Stuart Burns, China’s top state primary aluminum producer, Chalco, reported an 8% drop in output for the first half of the year, compared with the same period of 2018. Primary aluminum production totaled 1.89 million tons, compared to 2.06 million tons during the first six months of 2018.

Additionally, outages brought output down temporarily, including flooding at Hongqiao. As a result of the outages, exports dropped to the lowest level since February. According to Reuters, exports dropped to 466,000 tons in August, down around 10% when compared with August 2018.

Global Demand Weakness Continues

While demand in the United States remained relatively stable, demand in other regions looks weaker.

Norsk Hydro recently announced plans to close some aluminum foil production in Germany as part of restructuring efforts aimed at increasing the profitability of its rolled products business.

Novelis’ Acquisition of Aleris Under Scrutiny

The U.S. Justice Department filed a lawsuit objecting to Novelis Inc.’s purchase of Aleris Corporation on Sept. 4 due to concerns over higher future prices for automotive aluminum sheet.

According to an issued statement, competition would be hindered, with Novelis controlling 60% of projected domestic capacity.

U.S. Aluminum Premiums

The U.S. Midwest Premium remains at around $0.18/pound.

What This Means for Industrial Buyers

The sideways to bearish market for aluminum led to the index decline. Buying organizations will need to pay careful attention to short-, medium- and long-term buying signals.

Buying organizations interested in tracking industrial metals prices with ease should request a demo of the MetalMiner Insights platform.

Buying organizations seeking more insight into longer-term steel price trends should read MetalMiner’s Annual Metal Buying Outlook.

Free Partial Sample Report: 2020 MetalMiner Annual Metals Outlook

Actual Metal Prices and Trends

European commercial 1050 sheet increased by 1.3% to $2393/mt. European 5083 plate dropped by 2.1% to $2,729/mt.

India’s primary cash price dropped by 4.4% to $1.94/kilogram.

The LME primary 3-month price dropped by 3.4% to $1,746/mt.

Korean commercial 1050 sheet, 5052 coil premium over 1050, and 3003 coil premium over 1050 all decreased by less than 1%, to $2.96, $3.12 and $3.00 per kilogram, respectively.

Chinese prices all declined by under 1%. Aluminum billet priced at $2,061/mt, while bar priced at $2,729/mt. China’s aluminum scrap price dropped the most, by 0.9%, to $1,813/mt. The primary cash price stayed essentially flat at $2,015/mt.

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This morning in metals news, China announced some U.S. goods would be exempted from tariffs, steel production is down in the Great Lakes region and copper falls amid declining Chinese auto sales.

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China Announces Tariff Exemptions

The Chinese government announced Wednesday that it will exempt 16 types of U.S. goods from tariffs for one year as of Sept. 17, CNBC reported.

Among the products included in the list of exemptions are food for livestock, lubricants and cancer drugs, CNBC reported.

Steel Production Down in Great Lakes

Steel production in the U.S.’s Great Lakes region in the last week of August declined for the fifth straight week, the Times of Northwest Indiana reported.

Production for the week declined 1.17% from the previous week.

Copper Price Falls

Amid falling Chinese auto sales, the copper price approached a two-year low reached earlier this month, Reuters reported.

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LME copper was bid down 0.6% on Wednesday down to $5,793 per ton, Reuters reported.

The China Association of Automobile Manufacturers reported August automotive sales dropped 6.9% on a year-over-year basis.

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GDP figures may be holding up well, but metal consumption in China suggests the global slowdown and the ongoing trade war with the U.S. are taking their toll on China’s manufacturing sector.

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Reuters reported top state primary aluminum producer Chalco is quoted as filing an 8% fall in output, with primary aluminum output of 1.89 million tonnes in the first half of the year, down from 2.06 million tons compared with the first half of 2018.

Overall, revenue actually rose 15% to 94.9 billion yuan, despite a 10% drop in the primary aluminum segment, helped by rising alumina output. Alumina output increased 3.2% year-on-year to 6.82 million tons, fueling a trading revenue increase of 23%.

But higher primary metal costs and weak prices in the primary sector hit profits. In the second quarter alone, Chalco’s net profit dropped 52.7% from a year earlier, while revenue was up 11.3% year on year.

In a separate Reuters article, the news source reported exports have also been hit, falling 4.3% in August from the previous month despite a weaker yuan. Unexpected production outages at two key smelters meant there was less metal available for overseas shipments following flooding at Hongqiao’s premises earlier last month and a separate outage in Xinjiang.

Last month, China exported 466,000 tons of unwrought aluminum, including primary metal, alloy and semi-finished products. The total was the lowest since February and was also down 9.9% from August 2018.

Supporting the aluminum picture, imports of unwrought copper — including anode, refined and semi-finished copper — products into China stood at 404,000 tons last month, Reuters reported, down 3.8% from the 420,000 tonnes in July and also down 3.8% year on year. The article went on to state the decline came despite copper prices in China being mostly high enough in August for traders to make a profit by buying on the London Metal Exchange, the global price benchmark, and selling on China’s Shanghai Futures Exchange (encouraging bookings of physical copper imports into China).

The blame for the drop in demand is laid at China’s bruising trade war with the United States, driving a fourth straight month of contraction in factory output in August, according to an official survey.

China is not alone, of course.

U.S. manufacturing output has remained positive, albeit slower than a year earlier. However, early indicators, like the Institute for Supply Management survey, showed a contraction in August — the first since 2016, according to Bloomberg. That suggests at least parts of the manufacturing landscape are facing rising headwinds; we would be complacent to think the consequences of the trade war are falling solely on China.

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Western Europe is also slowing fast. German manufacturing is arguably already flirting with recession as a consequence of a slowing Chinese economy.

Just as a rising tide lifts all boats, falling global GDP correspondingly depresses prospects for all.

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This morning in metals news, China’s trade activity with respect to aluminum and copper slowed in August, Nucor announced Chairman and CEO John Ferriola will be retiring at the end of the calendar year and residents of an Arizona town expressed staunch opposition to a proposed aluminum recycling plant.

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China’s Aluminum Exports, Copper Imports Fall

China’s imports of copper and exports of aluminum fell in August as the trade war with the U.S. escalated with the most recent exchange of tariffs.

China’s copper imports fell 3.8% in August compared with the previous month, Reuters reported, while aluminum exports fell 4.3% compared with July totals.

Nucor CEO to Retire

Nucor Chairman and CEO John Ferriola will retire at the end of this year, the company reported.

Ferriola has served as chairman since 2014 and CEO since 2013.

Nucor’s Board of Directors elected Leon J. Topalian, 51, to be president and chief operating officer, effective Sept. 5, 2019. Topalian will succeed Ferriola as CEO on Jan. 1, 2020.

Residents Oppose Proposed Arizona Aluminum Recycling Plant

Locals in the Arizona farming town of Wenden have come out in opposition to an aluminum recycling plant proposed for the town, azcentral.com reported.

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According to the report, residents urged officials from the Arizona Department of Environmental Quality not to grant an air-quality permit for the proposed Alliance Metals plant.

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This morning in metals news, Bank Of America cut its steel price forecast, copper prices dropped and gold lost some of its safe haven luster.

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Gloomy Steel Forecast

Bank of America has cut its steel price forecast and is less than optimistic about steel stocks going forward, Yahoo Finance reported.

According to the report, Bank of America analyst Timna Tanners cut her U.S. HRC price target for the second half of the year from $628 per short ton to $572 per short ton.

Tanners also cut 2019 EPS cuts for U.S. Steel, Nucor, Reliance Steel and Aluminum, Steel Dynamics and Commercial Metals Company, according to Yahoo.

Copper Price Drops

Markets continue to fluctuate on a daily basis based on any sliver of news emerging from the ongoing U.S.-China trade war.

On Friday, despite China’s intention to increase bank lending, LME copper was bid down 0.6% to $5,812 per ton, according to Reuters, after reaching a two-year low earlier this week.

Not so Golden

The gold price posted its largest daily dollar loss in three years, MarketWatch reported, on optimism regarding trade and jobs data impacting its safe haven appeal.

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According to the report, gold on the COMEX for December delivery slipped 2.2% to a two-week low of $1,525.50 per ounce.