Articles in Category: Non-ferrous Metals

The COVID-19 pandemic — and even conditions prior to that — has turned India into a net importer of copper, with at 132,445 tons imported between April 2019 and January 2020.

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This morning in metals news, Novelis Inc. reported fiscal year 2020 net income fell 3%, ArcelorMittal has opted to suspend dividend payments and Barrick Gold has benefited from the gold price’s rise this year.

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The Aluminum Monthly Metals Index (MMI) rose 1.4% this month.

As China slowly recovers, SHFE and LME prices diverge

After moving in relative harmony, aluminum prices on China’s SHFE and global prices on the LME have diverged sharply over the last month.

Investors have dumped LME and bought SHFE on the expectation demand is picking up much faster in China than the rest of the world. Not surprisingly, the delta has attracted the arbitrage community and traders have started buying LME and selling SHFE in the expectation the gap must narrow.

With demand in China likely to be slow to recover as domestic markets wait for significant stimulus and export markets remain severely depressed, the SHFE premium is expected to narrow again soon. A surplus global supply market will weigh on prices generally and cap rises on the LME until such time as a significant improvement in demand becomes evident.

March aluminum production rises 1.5%

With ample global supply and lagging demand, aluminum — like other base metals — has seen better days.

Production in March continued apace, rising 1.5% compared with March 2019 production, according to the International Aluminum Institute. Global production reached an estimated 5.48 million tons in March.

Of that total, China accounted for an estimated 3.1 million tons, up from the 2.91 million tons produced in February.

Primary to eat into scrap market share

In its most recently released quarterly report, Russian aluminum giant Rusal reported Q1 aluminum production of 940,000 tons, down 0.9% from the previous month, while alumina production fell 1.8% to 2.01 million tons.

Elevated aluminum supply has remained an issue, even during the coronavirus outbreak.

Worldwide primary aluminum supply increased by 3.5% to 16.12 million tons in Q1, “mostly driven by Chinese growth of 4.1% to 9.2 million tonnes and in RoW by 2.7% to 7 million tonnes,” Rusal noted, “in spite of around 24% of global capacity being loss making.”

“Around 0.4 million tonnes of capacity in RoW and 0.5-0.7 million tonnes in China was terminated due to falling prices,” Rusal said. “At the same time, falling raw materials prices including alumina and carbon, depreciation of local currencies as well as high closure and restarting costs continue to keep many smelters operating.”

Rusal expects the primary market to eat into scrap’s market share.

“The current price environment is preferential for primary aluminium compared to scrap,” the firm said. “It is therefore expected that primary aluminium will gain some share from scrap this year.”

Alcoa curtails remaining 230K tons of capacity at Intalco smelter

Meanwhile, in the U.S., last month Alcoa announced it would curtail the remaining 230,000 tons of capacity at its Intalco smelter in Ferndale, Washington, citing “declining market conditions.”

The smelter, where 700 are employed, recorded a net loss of $24 million in the first quarter, according to Alcoa.

Previously, Alcoa curtailed 49,000 tons of capacity at the Intalco smelter; the remaining curtailment is expected to be completed by the end of July 2020.

As a result, Alcoa downgraded its annual aluminum shipment guidance to between 2.9 million and 3.0 million tons (down from between 3.0 million and 3.1 million tons). Meanwhile, Alcoa’s guidance for bauxite and alumina shipments was unchanged.

In other news, Alcoa said it was suspending its global supply-and-demand forecasts for bauxite, alumina and aluminum as a result of uncertainty stemming from the COVID-19 pandemic.

USITC votes to continue AD, CVD cases for common alloy aluminum sheet

Last month, the U.S. International Trade Commission voted in the affirmative to continue anti-dumping and countervailing subsidy investigations related to imports of common alloy aluminum sheet from 18 countries.

The anti-dumping probe covers imports of common alloy aluminum sheet from Bahrain, Brazil, Croatia, Egypt, Germany, Greece, India, Indonesia, Italy, Korea, Oman, Romania, Serbia, Slovenia, South Africa, Spain, Taiwan and Turkey. The countervailing subsidy probe covers imports from Bahrain, Brazil, India and Turkey.

The petitioner in the case was the Aluminum Association Common Alloy Aluminum Sheet Trade Enforcement Working Group, whose members are: Aleris Rolled Products, Inc. (Beachwood, Ohio); Arconic, Inc. (Bettendorf, Iowa); Constellium Rolled Products Ravenswood, LLC (Ravenswood, W.Va.); JW Aluminum Company (Daniel Island, S.C.); Novelis Corporation (Atlanta); and Texarkana Aluminum, Inc. (Texarkana, Texas).

DOC to take comments on proposed aluminum import monitoring system

The Department of Commerce has operated the Steel Import Monitoring and Analysis (SIMA) system since 2005, but a similar system for aluminum is not yet in place.

That could be changing.

On April 29, the Department of Commerce issued a notice in the Federal Register calling for comments on a proposal to implement an Aluminum Import Monitoring and Analysis (AIMA) system.

The Aluminum Association has in recent years called for the implementation of an equivalent system for aluminum imports, allowing for tracking of aluminum import trends. The industry group praised the DOC’s plans to consider an aluminum import monitoring system.

“This is an important step by the administration to fulfill its promise to establish an aluminum-specific import monitoring system,” said Tom Dobbins, president and CEO of the Aluminum Association. “Aluminum monitoring will enable government officials and the industry to better identify trends in trade flows and address misclassification, transshipment and evasion of duties. “The Aluminum Association, which represents the entire industry value chain in the United States, is calling on Congress to ensure this program is fully funded in the coming fiscal year.”

Actual metals prices and trends

The Chinese aluminum scrap price rose 13.6% month over month to $1,700.84/mt as of May 1. Primary three-month aluminum fell 1.3% to $1,504/mt.

European commercial 1050 aluminum sheet fell 6.1% to $2,040/mt.

Chinese aluminum billet rose 3.1% to $1,733.44/mt. Chinese aluminum bar rose 2.9% to $1,828.40/mt.

Chinese primary cash aluminum rose 11.1% to $1,814.23/mt. Indian primary cash aluminum fell 2.2% to $1.75/kg.

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This morning in metals news, U.S. Steel has offered Stelco a 25% stake in its Minntac operation, LME copper fell to a two-week low and China’s industrial profits plunged 36.7% in the first quarter.

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Before we head into the weekend, let’s take a look at the week that was and some of the metals storylines here on MetalMiner, including coverage of: copper production; aluminum tariff exclusion reform; the nickel market; global steel production; and much more.

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This morning in metals news, Century Aluminum reported its Q1 financial results, U.S. Steel will lay off workers at its Mon Valley Works and Chinese copper stocks plunged.

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Several apparently contradictory recent articles have reported the rise in nickel prices following supply disruptions to miners as a result of the spread of the coronavirus.

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Reuters reported that just a few weeks ago market surpluses were expected. In a recent poll of analysts, the median nickel market balance forecast for this year was a surplus of 89,000 tons, while Russian producer Norilsk Nickel last week came out with an even heftier surplus estimate of 149,000 tons.

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This morning in metals news, the Aluminum Association petitioned the Department of Commerce for changes to the aluminum tariff exclusion system, Freeport-McMoRan reported losses in Q1 and Anglo American production levels fell in Q1.

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According to the International Copper Study Group, global copper mine production in January rose 0.5% on a year-over-year basis.

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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 coverage of: a potential copper find in Cornwall; the automotive sector’s struggles; falling oil prices; rising aluminum production and much more.

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