The week’s biggest mover on the Construction MMI® was the price of US shredded scrap, which saw a 9.5 percent decline. This week marked the third in a row of declining prices for the metal.
The price of Chinese rebar fell 0.2 percent after rising 0.2 percent the week before. The Chinese low price of 62% Australian iron ore fines remained essentially flat. Closing at above $600 per metric ton, Chinese H-beam steel remained unchanged for the week.
Chinese aluminum bar prices held steady from the previous week at above $2,200 per metric ton. Prices for European 1050 aluminum remained constant, closing the week at below $2,900 per metric ton.
The weekly US Midwest bar fuel surcharge had a flat week, as did the weekly US US Gulf Coast and Rocky Mountain bar fuel surcharges.
The Construction MMI® collects and weights 9 metal price points used within the construction industry to provide a unique view into construction industry price trends. For more information on the Construction MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.
The Chinese aluminum cash price saw a 0.7 percent increase on June 12, 2012, making it the biggest mover for the day on global aluminum markets. The price of Chinese aluminum billet closed Tuesday by halting its two-day flat run with a 0.3 percent decline.
For the fifth consecutive day, the price of Chinese aluminum bar held flat at above $2,200 per metric ton. For the fifth day in a row, the price of Chinese aluminum scrap remained essentially flat.
The cash price of primary Indian aluminum finished the day with a 0.6 percent increase. Aluminum prices on the LME saw some paltry gains on June 12: the aluminum 3-month price rose 0.4 percent to $1,981 per metric ton, while the primary aluminum cash price inched up 0.3 percent to finish at $1,943 per metric ton.
And this year, the European debt crisis takes center stage, just over China’s growth declines, and Ed Meir of INTL FCStone, a fixture in the metals analysis world, homed in on Greece, Italy and Spain, and what the US dollar can tell us about where aluminum prices — indeed, all commodity prices — are headed.
A handful of poll questions were asked to the attendees at the Harbor Aluminum Outlook conference today, some of which bear sharing, especially since they take 2012 aluminum prices into consideration — and what industrial buyers, sellers, analysts and others are expecting for 2013.
Do you think speculative flows play a role in the determination of long term prices?
Yes, a bit — 42%
Yes, significantly — 47%
Not really — 11%
Speculation is playing as big a role as ever — see our earlier post.
Do you think aluminum prices are:
Overvalued? — 10%
Undervalued? — 68%
Fairly valued — 22%
I believe the bulk of demand/business growth in 2013 will come from:
North America — 62%
China — 23%
EU, Latin America and India distant third, fourth, fifth places
Make sure to follow live happenings on twitter at #harborconference
The aluminum 3-month price saw a 0.7 percent drop on the LME on June 11, 2012, landing at $1,973 per metric ton and making it the biggest mover of the day on global aluminum markets. On the LME, the primary aluminum cash price fell 0.4 percent to $1,938 per metric ton. Following a two-day drop, Indian aluminum cash price increased by 0.2 percent.
Chinese aluminum closed mixed on Monday. The Chinese aluminum cash price finished the market day up 0.2 percent per metric ton. The price of Chinese aluminum scrap held steady at below $2,600 per metric ton. The price of Chinese aluminum billet was essentially unchanged, while the price of Chinese aluminum bar remained essentially flat at above $2,200 per metric ton.
Dressed in a slick, slim dark suit and a dark tie to match, the dynamic face and voice of Harbor Aluminum, Jorge Vazquez, dove into the day’s events by presenting an overview of how demographics and the economic cycle will affect aluminum markets — and aluminum prices.
At last year’s Harbor Aluminum Outlook Conference, Jorge Vazquez and his team of highly qualified, hard-working data-and-trend-crunchers over at Harbor came together to offer a rather optimistic forecast for aluminum prices in 2012.
The conclusions they came to, based on “technical indicators, industry fundamentals, output economics and prime cycle analysis” put the price of aluminum in a range of $2,350 per ton to a whopping $3,200 per ton.
In the conference’s aftermath, after hearing Novelis’ Erwin Mayr speak, Lisa Reisman wrote here on the MetalMiner blog that “it becomes hard to come to any other conclusion than aluminum prices face far more upward price risk than downside price risk. Of course global economic meltdown, raw material supply constraints,warehousing games and hijinks played by the Big 3 triumvirate of Goldman Sachs, JP Morgan and Glencore (The Wall Street Journal has an excellent primer on the subject right here) along with the dumping of 60m barrels of oil not withstanding, the picture painted by Novelis at the conference bodes well for aluminum consumption.”
Needless to say for many market watchers, aluminum producers and aluminum buyers, Lisa’s first sentence — not her last — is the one that has been truer for 2012 aluminum prices.
LME prices have barely hit Harbor’s low-end of their aluminum price forecast, coming in March, but downward slides characterize most of 2012 so far: the year began sub-$2,000 per ton, rose then took a sharp drop at the end of January, then began a steady downward trend into the spring — flirting with the $2,300 per ton level before heading below $2,000 again the past several weeks.
Meanwhile, Chinese cash prices of aluminum have hardly broken outside the $2,500-$2,600 per ton range.
Global aluminum supply has not really seen the constraints necessary to rein in the price at all over the past quarter; in fact, aluminum LME inventory has jumped significantly in first few months of 2012. (For a more detailed rundown on why this is, check out MetalMiner’s analysis on the topic.)
Of course, global industrial demand has slowed to a nearly glacial pace, since China, India and the European Union have all had their separate and interrelated woes regarding growth slowdowns and debt concerns.
However, a pair of Goldman Sachs reports released yesterday pointed to better returns for investors. “Crude, gas, copper, aluminum and gold are the bank’s top picks,” according to Bloomberg. A separate report detailed a revised, lower forecast for aluminum — $2,200 a ton from $2,400 a ton — for the next three months.
Where to go from here? Will aluminum prices stay below the psychologically critical mark of $2,000 for much longer (as the LME price is this week so far?) Let’s see, as Harbor’s 2012 Outlook Conference begins its main day today.
On June 8, 2012, the Indian aluminum cash price fell by 0.7 percent, making it the day’s biggest mover on global aluminum markets. The cash price of primary aluminum moved up 0.5 percent on the LME, landing at $1,946 per metric ton. The 3-month price of aluminum finished the day on the LME at $1,986 per metric ton following a 0.4 percent increase.
Chinese aluminum prices, meanwhile, were flat for the day.
As we asked last week, will China be the driver of commodities demand it was in the last decade?
The process of urbanization, in which hundreds of millions have moved to cities from the countryside, has been a big driver of the commodities super-cycle in the past ten years, particularly for materials like iron ore, steel and cement, but also copper and aluminum.
The pace of migration, though, has begun to level off and the FT quotes Macquarie Bank, which forecast that China’s steel demand could peak between 2020 and 2025.
The cash price of primary Chinese aluminum saw a 0.4 percent drop on June 6, 2012, making it the biggest mover of the day on global aluminum markets.
Chinese aluminum billet ended the day after a 0.2 percent drop yesterday. The price of Chinese aluminum bar held steady at above $2,200 per metric ton. Chinese aluminum scrap stayed flat at below $2,600 per metric ton.
Wednesday saw Indian aluminum cash price drift down 0.3 percent after a couple of stagnant days.
On the LME, the 3-month price of aluminum showed little movement yesterday, hovering around $1,979 per metric ton. The cash price of primary aluminum remained essentially flat on the LME at $1,936 per metric ton.