Articles in Category: Non-ferrous Metals

aluminum ingot stacked for export

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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, including the aluminum industry and its efforts to curb emissions, China’s latest foray in the global rare earths chess game and much more:

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Week of Feb. 15-19 (aluminum industry, rare earths and more)

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

list of commodities prices

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Investment banks love a super cycle.

It spurs irrational investment and sucks in unwary investors. Furthermore, it encourages passive funds to up their allocation, even if only by fractions of a percent.

But with some $14 trillion invested in US equities alone, even a modest increase in passive investments into ETFs would reap significant rewards in fees.

As such, it may be not surprising that the big boys — like JP Morgan, as reported in Bloomberg, and Goldman Sachs, as reported in the Financial Times (admittedly focused more on oil) — are calling the start of the next commodities super cycle.

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Commodities super cycle?

On the face of it, they appear to have some foundation.

As a separate post in the Financial Times observes, metals, agricultural and oil commodity indices have risen up to 40% since last July.

In part, this is due to a surge of interest in green-energy projects.

The EU, US and China have all promised to spend big. Hydrogen projects alone could receive €30 billion from the EU.

Copper has rallied to eight-year highs, around $8,375 per ton. The metal is benefiting from strong Chinese demand and the prospects for a more rapid transition to electric vehicles gains momentum. Glencore is quoted as saying world copper demand will double by 2050 and that mine investment is insufficient,

All of that certainly makes for a bullish landscape.

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robot building automotive aluminum component

Pixel_B/Adobe Stock

This morning in metals news: Novelis announced the commercial availability of a new class of high-strength automotive aluminum; meanwhile, the United States Geological Survey updated its Mineral Deposit Database for niobium; and the global aluminum market surplus more than tripled from 2019 to 2020.

Novelis announces new high-strength automotive aluminum

Atlanta-based Novelis today announced it will offer a new “ultra-high-strength” automotive aluminum solution.

The product, Novelis AdvanzTM 7UHS-s701, offers “lightweighting potential of up to 40% over existing ultra-high strength, hot-formed steel solutions.”

“The s701 technology represents the future of high-strength material in automotive applications and offers a clear alternative to the most advanced high-strength steel products,” said Philippe Meyer, senior vice president and chief technology officer at Novelis. “Aluminum is already the material of choice for lightweighting, and now we are offering a solution that helps automakers design even safer, lighter and better performing vehicles.”

Stop obsessing about the actual forecasted aluminum price. It’s more important to spot the trend

USGS updates database entry for niobium

The United States Geological Survey (USGS) has updated its database entry for the mineral niobium.

“Niobium is vital to many sectors of our infrastructure and manufacturing economy, and the United States is 100 percent reliant on other countries for it,” said Jeff Mauk, USGS lead scientist for USMIN. “Updates to our database can help weigh the potential for domestic niobium production against the need for future trade agreements.”

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Indonesia on a globe

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Electric vehicle manufacturers are wooing Indonesia to create a nickel-based battery supply chain in that country.

Elon Musk’s Tesla and China’s Contemporary Amperex Technology, otherwise known as CATL, and South Korea’s LG Chem are in the fray. 

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Firms look to secure Indonesian nickel supply

A senior Indonesian government official told news agency Reuters the government had recently received Tesla’s investment proposal. 

Since early last year, Tesla has been courting Indonesia because for the value of its strategic commodities, including nickel. Nickel is a critical metal used in batteries for EVs due to its properties enabling mass energy storage capabilities. Furthermore, nickel reduces the overall cost of batteries by limiting the amount of cobalt required. 

Tesla seems to have come back to the Indonesian government with a reworked proposal to the one it had submitted in May 2020. The latter had shown reluctance in just signing a raw material supply agreement. 

The minister told reporters, while acknowledging Tesla had sent its proposal, that Tesla’s engagement in Indonesia would extend past raw materials. If Tesla only wants to take raw materials, then the government was not too keen in pursuing a partnership.

Indonesia is also talking to CATL and LG Chem regarding their plans to create an EV battery supply chain, the Nikkei Asia reported. 

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copper bars

Shawn Hempel/Adobe Stock

This morning in metals news: the copper price is on its way back up again; meanwhile, Rio Tinto reached a new power agreement for its ISAL aluminum smelter; and, lastly, oil prices continue to rise.

Copper price surges

After a sleepy January, copper prices are back on the ascent.

The LME three-month copper price closed last week at $8,251 per metric ton. The price marked its 2021 high and, furthermore, a more than eight-year high.

Copper — and other base metals — cooled in January ahead of the Lunar New Year celebrations in China.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Rio Tinto reaches new ISAL power agreement

Rio Tinto announced a new power agreement for its ISAL aluminum smelter in Iceland.

“Rio Tinto has reached agreement on an amended power contract that will allow the ISAL aluminium smelter in Iceland to continue operating with an improved competitive position,” the firm said.

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US and UAE flags

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Before we head into the weekend, let’s take a look back at the week that was and the metals storylines here on MetalMiner, including the Biden administration reimposing a tariff on aluminum from the UAE, copper demand and much more.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Week of Feb. 8-12 (Biden administration reinstates UAE aluminum tariff, copper demand and more)

Stop obsessing about the actual forecasted aluminum price. It’s more important to spot the trend.

import tariff

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This morning in metals news: the Coalition of American Metal Manufacturers and Users called on the Biden administration to rescind the Section 232 steel and aluminum tariffs; meanwhile, the Energy Information Administration forecasts US energy-related CO2 emissions to rise after the mid-2030s; and, lastly, US President Joe Biden spoke this week with Chinese President Xi Jinping.

CAMMU urges Biden to ends Section 232 tariffs

The Coalition of American Metal Manufacturers and Users (CAMMU) sent President Joe Biden a letter Wednesday urging him remove the Section 232 tariffs on steel and aluminum.

In 2018, former President Donald Trump imposed the tariffs of 25% for steel and 10% for aluminum.

“By taking action to terminate the Trump tariffs, your Administration can prevent U.S. manufacturers from shutting down production lines, laying off workers, and potentially even closing their doors,” CAMMU said in the letter. “By contrast, the ripple effects of allowing these Section 232 tariffs to remain are substantial. Our member companies report not only record steel prices, but also delivery times stretching 12-16 weeks, causing significant disruptions.”

As we noted previously, however, Biden reversed Trump’s decision to rescind the tariff on aluminum from the UAE (a move he made on his final day in office).

See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your aluminum buy.

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steel

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This morning in metals news: December steel shipments rose by 4.4%; meanwhile, miner BHP announced plans to work with Japanese steelmaker JFE to study how to reduce greenhouse gas emissions from the steelmaking process; and, lastly, the copper price has bounced back after a January lull.

Steel shipments rise in December

US steel shipments rose by 4.4% in December compared with the previous month, the American Iron and Steel Institute reported.

December steel shipments reached 7.05 million net tons.

Meanwhile, steel shipments in 2020 totaled 81.0 million net tons, or down 15.8% from 2019.

By product, hot rolled sheet steel shipments rose by 3%. Meanwhile, cold rolled sheet steel shipments fell by 3%.

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BHP, JFE to study curbing emissions in steelmaking process

Businesses around the world are making efforts to show consumers they are tackling the climate crisis in some form.

As we’ve noted recently in the automotive sector, General Motors unveiled plans to electrify its lineup and reach carbon neutrality by 2040.

Speaking of steel shipments, players in the steelmaking sector are also making similar announcements.

Miner BHP and Japanese steelmaker JFE will work together to study how to curb emissions from the steelmaking process.

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tin

quka/Adobe Stock

We have said it before, but we are not great fans of using stock levels as a predictor of price trends or even as a proxy for wider physical market metal availability — however, in the case of the tin market, LME stock position is the surest illustration of a market under extreme duress.

Tin market surge

A Reuters report this week explains in succinct terms why prices have hit seven-year highs. The three-month price has hit $23,435 per metric ton. Meanwhile, the tight spot market has reached $25,001/ton.

Holders of metal will no doubt be taking advantage of the metal’s scarcity. However, this is by all accounts not an engineered squeeze.

In fact, it is the result of three years of global deficits, Reuters reports, citing International Tin Association data.

A combination of pandemic hit supply, logistics delays in deliveries, and economies roaring back after lockdowns – particularly China’s electronics industry – has drained physical stocks held in places like the LME to just 810 tons.

Worse, 310 tons of that is awaiting physical load out, leaving just 500 tons.

That is just half a day’s global consumption available for physical purchase.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Demand for spot

Not surprisingly, in such a tight market the demand for prompt or spot metal is intense.

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copper bars

Shawn Hempel/Adobe Stock

The Copper Monthly Metals Index (MMI) increased for the fourth consecutive month, rising by 1.1%, as copper demand is likely to remain strong this year.

February 2021 Copper MMI chart

Copper prices traded sideways throughout January, which proved to be a slow month for the red metal. Most of its momentum over the past year came from China, which has stopped some of its manufacturing ahead of the Chinese New Year celebrations.

However, copper prices might pick up as key industries — such as construction, consumer appliances and automotive — continue to grow. Copper demand should also benefit from the “Buy American” policy that the Biden administration plans to implement.

The plan would promote the U.S. manufacture of essential components in construction, appliances, electronics and automotive.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Global copper demand

As mentioned above, it’s not likely that copper demand will slow down in 2021.

In the US, new home and home renovation demand spiked since the pandemic started, along with electronics demand. Analysts at CitiBank expect the copper market to shift into a deficit in the second half of the year with a minor surplus overall for 2021, Reuters reported. They also forecast deficits in 2022 and 2023.

The US Census Bureau and the US Department of Housing and Urban Development reported building permits in December increased by 4.5% compared to November and 17.3% above the December 2019 rate. Privately owned housing continued to increase in December, rising by 5.8% from the previous month and by 5.2% compared to December 2019. The uptrend started in September 2020.

China will continue to play an important role in the copper market. The country accounts for about half of global primary consumption, which is then used to manufacture export goods.

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