Articles in Category: Non-ferrous Metals

Just when European aluminum buyers thought the situation could not get any worse, the Russian authorities decided to slap export duties — set at 15% as a base rate or a specific minimum of $254 per ton — on exports of aluminium ingot and billet.

The export tariffs will apply to some 340 nonferrous and steel products, according to the official decree signed last month. For aluminum, it will cover those HS code products starting 760110.

Are you under pressure to generate aluminum cost savings? Make sure you are following these five best practices

European aluminum market

aluminum ingot

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The European aluminum market is already extremely tight for semi-finished aluminum products Many mills are booked out until the end of the year. Those that do have capacity for the fourth quarter are further increasing conversion premiums by up to 30% in just the last couple of weeks.

The rising cost of Russian ingot and billet supplies will add to the already elevated Rotterdam delivery premiums. In time, they will add to US Midwest delivery premiums and Main Japanese Port physical delivery premiums.

In Rotterdam, Fastmarkets reported that the P 1020 premium in warehouse duty paid Rotterdam price increased from $250-$260 per ton in late June to $280-$300 per ton last week.

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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.

This week, we touched on the USMCA (which turned 1 on Thursday), Stuart Burns covered the relationship between inventory levels and metals demand, and much more.

On the USMCA — which went into effect July 1, 2020, almost four years after NAFTA talks began — United States Trade Representative Katherine Tai offered some comments this week on the occasion.

“We should also celebrate the USMCA because of what it represents: a renewed commitment by our three countries to pursue negotiations that raise standards and create a race to the top,” she said.

Furthermore, USMCA trade ministers will meet in Mexico City on July 7 to commemorate the one-year anniversary of the trade agreement.

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Week of June 28-July 2 (USMCA, metal stock levels and more)

USMCA

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  • The global lead and zinc markets were in surplus through the first four months of 2021, the International Lead and Zinc Study Group said.
  • Meanwhile, GDP rose in all 50 states in the first quarter, the Bureau of Economic Analysis (BEA) reported.
  • In addition, Stuart Burns covered Russia’s plans to impose export taxes on key metals.
  • U.S. steel capacity utilization for the week ending June 26 reached 82.7%, the American Iron and Steel Institute reported.
  • The U.S. Court of International Trade made a ruling affirming duty levels set by the Department of Commerce with respect to heavy walled rectangular steel pipes and tubes from Korea.
  • Burns on the loss of support for the zinc price.
  • The E.U. voted to extend steel safeguards, originally imposed in 2018, for an additional three years.
  • The USMCA Labor Council convened for the first time, pursuant to the 1-year-old agreement’s chapter on labor.
  • Think stock levels are a reliable indicator of true metals demand? Think again.
  • Norsk Hydro has signed a letter of intent to build an aluminum recycling plant in Michigan.
  • Meanwhile, the United States-Mexico-Canada Agreement, or USMCA, hit the one-year mark this Thursday.
  • The U.S. goods and services deficit rose in May from the previous month.
  • Lastly, for subscribers, the MetalMiner Monthly Outlook for July is now available.

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This morning in metals news: Norsk Hydro today announced it signed a letter of intent to build a new aluminum recycling plant in Cassopolis, Michigan; the Census Bureau released construction spending data; and, lastly, the zinc price posted some gains this week.

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Norsk Hydro to build aluminum recycling plant in Michigan

Norsk Hydro

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Oslo-based Norsk Hydro has signed a letter of intent to build an aluminum recycling plant in Michigan.

The plant will produce aluminum extrusion ingot for automotive applications. Norsk Hydro said it aims to build the plant by 2025.

“The LoI between Hydro Aluminium Metal and landowner Midwest Energy and Communications (MEC) is based on Hydro’s intention to build a facility in Cassopolis producing 120,000 metric tonnes per year from 2023 with around 70 direct employees,” Norsk Hydro said. “The total project investment is currently estimated to be around $120 million, depending on final facility design, market conditions and macroeconomic development.”

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The zinc price has defied expectations that oversupply would put so much downward pressure on prices that last month’s $3,100/ton high would be the peak for years to come.

Although the zinc price has drifted off those highs, it is currently just under $2,900 per metric ton for cash and three-month on the LME, zinc prices have remained stubbornly high, despite a complete lack of investor interest.

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Zinc price trends

zinc

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As with aluminum and copper, the Shanghai Futures Exchange has outperformed London this year. However, even the SHFE zinc price has come off this month. Most metals have moved into a temporary sideways market.

The International Lead and Zinc Study Group estimates the zinc market recorded a supply-demand surplus of just 31,000 metric tons in January-April, compared with a surplus of 256,000 tons in the same period last year, according to a Reuters post. That also compares with an earlier April forecast for a 353,000-ton surplus this year.

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According to a recent report by the International Lead and Zinc Study Group (ILZSG), global lead and zinc supply exceeded demand through the first four months of the year.

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

Zinc market in surplus

zinc

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Global zinc supply exceeded demand by 31,000 tons metric tons, ILZSG preliminary data indicated.

During the period, zinc mine production rose by 11.3%.

Australia, Bolivia, China, India, Ireland, Mexico, Peru, South Africa and the United States posted production increases.

Output from Canada, Finland, Kazakhstan, Namibia and Poland declined.

Meanwhile, refined zinc output rose by 4.5%. Zinc usage also increased, surging by 10.1% as a result of a “substantial rise” in China. However, China’s imports of zinc contained in zinc concentrates dropped by 9.4%.

Usage also increased in Brazil, India, Japan, the Republic of Korea, Taiwan, Thailand and Turkey. Meanwhile, apparent consumption fell by 2.1% in the U.S.

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This morning in metals news: in case you missed it, on-demand video of MetalMiner’s monthly webinar session is available, which this Thursday covered aluminum; U.S. personal income decreased in May; and, lastly, unemployment rates fell in 21 states and the District of Columbia in May.

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MetalMiner aluminum fireside chat

aluminum ingot stacked for export

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This week, the MetalMiner team once again convened for the monthly 30-minute webinar session, this time covering aluminum.

On-demand video of the session is available in the MetalMiner Video Archive. (In addition, video of previous sessions is also available.)

As for aluminum, MetalMiner’s Stuart Burns opened the week with some analysis of the market.

“However you slice and dice the statistics — and there are numerous ways stats can be sliced and diced — the global aluminum market is tight,” he wrote.

“Whether we look at primary ingot, extrusion billet or rolling slab intermediates, or semi-finished sheets/plates, tubes and extrusions mill lead times are long and conversion premiums are high. Meanwhile, the global economy has bounced back from the pandemic. Local distortions, such as tariff barriers, to traditional supply chains have added to bottlenecks and robust restocking.”

Personal income declines

U.S. personal income declined by 2.0% in May, the Bureau of Economic Analysis (BEA) reported.

Meanwhile, disposable personal income (DPI) decreased $436.3 billion, or 2.3%. Personal consumption expenditures (PCE) increased $2.9 billion, or less than 0.1%.

Unemployment declines in 21 states

Meanwhile, U.S. unemployment rates declined in 21 states and the District of Columbia in May, the Bureau of Labor Statistics (BLS) reported.

Unemployment rates were stable in 28 states and higher in just one state.

“All 50 states and the District had jobless rate decreases from a year earlier,” the BLS reported. “The national unemployment rate declined by 0.3 percentage point over the month to 5.8 percent and was 7.5 points lower than in May 2020.”

Are you under pressure to generate aluminum cost savings? Make sure you are following these five best practices

Global copper mine production rose by 3.7% in the first quarter of 2021, the International Copper Study Group (ICSG) reported this week. The group estimated an apparent global copper surplus of 130,000 metric tons.

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Copper mine production gains to start the year

copper mine

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Global copper mine production recovered during the first three months of the year, the ICSG reported this week.

Concentrate production rose by 5.5%, while solvent extraction-electrowinning fell by 3.5%.

“Output in Peru, the world’s second biggest copper mine producing country, increased by 3% mainly because March production was up by 18% from a constrained March 2020 basis,” the ICSG reported. “However, Jan-Mar 2021 production is still 10% below that of Jan-Mar 2019.”

Earlier this month, Stuart Burns delved into Peru’s ongoing COVID-19 crisis, plus its recent presidential run-off.

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However you slice and dice the statistics — and there are numerous ways stats can be sliced and diced — the global aluminum market is tight.

Whether we look at primary ingot, extrusion billet or rolling slab intermediates, or semi-finished sheets/plates, tubes and extrusions mill lead times are long and conversion premiums are high. Meanwhile, the global economy has bounced back from the pandemic. Local distortions, such as tariff barriers, to traditional supply chains have added to bottlenecks and robust restocking.

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

Aluminum deficit to surplus

aluminum price

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According to the International Aluminum Institute (IAI), total global aluminum production rose to 5.74 million metric tons in May. The total marked its highest level and a rise of just under 6% compared to this time last year.

Admittedly, last year was distorted by the pandemic. However, from January through May, global smelters operated normally around the world. The pandemic hit consumption badly, but output remained resilient.

Not surprisingly, therefore, this year to date swung to a 588,000-ton deficit compared to over a 1-million-ton (1,074 kt) surplus, as reported by the World Bureau of Metal Statistics for the whole of last year.

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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:

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

Week of June 14-18 (Boeing-Airbus dispute, copper prices and much more)

Airbus plane

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Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

It would seem Beijing only has to speak and the market reacts — this time, it’s about base metals.

Worried by what it sees as excessive inflation in commodity prices, which it fears will lead through into factory gate increases, China warned speculators last month over “excessive speculation.” The warning from China’s National Food and Strategic Reserves Administration hit the iron ore market hard, the Financial Times reports, sending the price 10% lower.

Do you know the five best practices of sourcing metals, including aluminum?

China turns to base metals

China aluminum

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This month, Beijing has turned its attention to base metals.

The authorities have hinted they may release metal from their strategic reserves. The move would be an overt attempt to dampen further price rises in what it sees as a speculator-fueled rally. Where applicable, it would provide additional supply for those metals where supplies are genuinely tight.

The country holds strategic reserves in copper built up over decades. During slumps, like after the financial crisis, Beijing has stepped in to support domestic producers.

State secrets

As a strategic reserve, copper stocks are a state secret.

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