Articles in Category: Non-ferrous Metals

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

Gary Whitton/Adobe Stock

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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The Copper Monthly Metals Index (MMI) increased by 7.8% for this month’s reading, as the copper price remains high but dipped below the $10,000/mt level.

June 2021 Copper MMI chart

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.

Copper prices retrace

On May 10, the LME three-month copper price closed at $10,720 per metric ton, hitting record highs last month.

Since then, prices declined below $10,000/mt.

SHFE prices followed the same trend.

The price retrace might be due partially to the stern warnings issued by Beijing about market discipline and excessive speculation in an effort to cool off prices.

Moreover, on June 7, trade data from China showed that copper imports fell 8% in May compared to the previous month. This might have scared some investors, as lower imports could mean lower demand, which decreases buying interest.

This could also signal that the pace of economic growth might be slowing. Along with less market speculation, that could mean the price will correct and consolidate.

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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 steel sector news, the Biden administration’s release of a 250-page supply chain report and much more:

steelmaking in an EAF

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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 June 7-11 (steel sector news, Biden administration’s supply chain review and more)

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.

China’s steel and aluminum market is undergoing a quiet revolution.

It’s not a revolution of investment or innovation.

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.

Peak aluminum, steel in China?

China aluminum

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According to Reuters, Beijing’s target of peak coal use by 2030 is asserting a dampening effect on new steel mill and aluminum smelter investment.

As such, the country could be at or near peak production. As Reuters’ Andy Home notes, the country’s rising output over the years as had a dampening effect on prices. That trend has led some Western producers to cease operations.

But a combination of harsher environmental legislation resulting in Beijing dissuading investment in new coal fired power projects, combined with Western markets’ meaningful action — after years of simply complaining — to block out Chinese exports of aluminum and steel products suggests the Chinese impetus to build capacity and the rest of the world’s willingness to buy product are both going through a transformational change.

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The Atlanta-based aluminum firm Novelis announced it is partnering with China’s leading universities to conduct research into the innovative use of aluminum.

The partnership between Novelis’ Shanghai Customer Solution Center (CSC) and the Tsinghua University Suzhou Automotive Research Institute (TSARI), confirmed by way of a memorandum of understanding (MoU) will drive research and development of aluminum products to promote a “low carbon, sustainable future.”

Novelis is a subsidiary of India’s Hindalco Industries Ltd. The company accounts for almost half of Hindalco’s consolidated revenue.

Furthermore, with operations in 10 countries, Novelis is one of the largest aluminum recyclers in the world. It reported U.S. $11.2 billion in net sales for the most recent fiscal 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.

Novelis in China

aluminum sheet

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However, Novelis already has a significant presence in China.

Back in May, for example, the aluminum major announced that it would supply Nissan with a sustainable, lightweight aluminum body sheet for the all-new Qashqai SUV and create a closed-loop recycling system in Europe.

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The Aluminum Monthly Metals Index (MMI) increased by 0.9% this month, as aluminum prices reached a nine-year high during the first half of the month but later declined. 

June 2021 Aluminum MMI chart

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

Aluminum prices

The LME aluminum price reached a nine-year high May 10 when it reached $2,565/mt. 

Since then, prices dropped below the $2,500/mt mark, averaging $2,434/mt throughout May.

Chinese prices behaved similarly to the LME. They reached a peak of CNY 20,030/mt on May 10 but have declined since then. 

EPI study claims tariffs incentivized US domestic production

On May 25, the Economic Policy Institute (EPI) published a white paper that argues the domestic aluminum producing and consuming industries have thrived as a result of the Section 232 tariff that former President Donald Trump implemented in March 2018. 

As MetalMiner reported last week, the EPI report argues the 10% duty has led to job growth in the sector and increased production.

The paper concluded that U.S. production of primary aluminum, including both alumina refining and secondary smelting and alloying of aluminum, increased by 37.6% to 1.14 million metric tons annually from March 2018 to February 2020. This increase came from the restart or production increase of five of the six smelters in the U.S. 

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