LME aluminum

MetalMiner’s monthly aluminum price index, the Aluminum MMI®, fell to 87 in March, a decrease of 2.2% from 89 in February. Aluminum price drops nearly across the board accounted for the latest hit – namely the LME aluminum 3-month price, which fell to its lowest point since April 2014.

Aluminum_Chart_March-2015_FNL

However, even this aluminum fall is minimal compared to the losses of our other metals.

LME Aluminum Warehouse Rules, Premiums

The London Metal Exchange (LME) keeps moving forward with reform of its warehouse rules. As my colleague Stuart recently explained in a post, a definition of what load-out means has been accepted. Now metal cannot be merry-go-rounded within the same facility and by the same owner.

On aluminum delivery premiums, Stuart asks, “could we be seeing the end of the elevated physical delivery premium?” He goes on to answer his question:

Not in the short term; the Western world is too tight for the premium to revert to pre-crisis levels, but we could be seeing the beginning of the end. Given increased supply from China and outflows from the currently moribund stock and finance trade, supply to Western consumers could increase over time – ironically just as products become more widely available to manage the risk.

The long-awaited aluminum premium contract will be launched on October 26. We will have to wait to see how this impacts delivery premiums.

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On the production side, non-Chinese aluminum production was unchanged in January, according to the latest figures from the International Aluminum Institute (IAI). Producers are still holding aluminum capacity in terms of keeping smelters offline in the face of low prices and historical stock overhang.

The IAI was also in the news early last month because it stopped production of its monthly producer inventory figures, saying its own members are either not submitting the data at all or struggling to do so on a timely basis.

Let’s Dance: IAI Data and LME Aluminum 3-Month Price

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A federal judge has dismissed antitrust litigation accusing a variety of Wall Street banks and commodity merchants of conspiring to drive up aluminum prices by reducing supply.

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In decisions on Tuesday night and Wednesday, US District Judge Katherine Forrest in Manhattan rejected claims brought by aluminum purchasers against several defendants including Goldman Sachs Group Inc., JPMorgan Chase & Co., Glencore Plc, and Hong Kong Exchanges and Clearing Ltd., which owns the London Metal Exchange.

Forrest said she will issue a decision later involving other defendants, including Detroit-based warehouse operator Metro International, which Goldman once owned.

The decisions are a setback for aluminum purchasers who raised price-fixing claims, in the highest-profile litigation affecting the base metals market in two decades.

These plaintiffs had accused Wall Street banks and commodity merchants of having colluded since May 2009 to hoard aluminum in warehouses. They said this led to higher storage costs, delays of up to 16 months to fill orders, and increases in prices of industrial products from soft drink cans to airplanes.

The cash price of primary Indian aluminum fell 1.1% on Tuesday, March 3 to INR 112.65 ($1.82) per kilogram, making it the day’s biggest mover. After a 0.2% increase, the 3-month price of aluminum finished the day on the LME at $1,811 per metric ton. On the LME, the primary aluminum cash price increased 0.1% to $1,797 per metric ton.

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Chinese aluminum prices closed flat for the day. The Chinese aluminum cash price saw little movement on Tuesday at CNY 12,860 ($2,049) per metric ton. The price of Chinese aluminum billet held steady at CNY 12,870 ($2,051) per metric ton. Chinese aluminum bar saw little change in its price on Tuesday at CNY 13,650 ($2,175) per metric ton. The price of Chinese aluminum scrap remained essentially flat at CNY 12,500 ($1,992) per metric ton.

Kobe Steel Ltd., a supplier of aluminum sheet to half of the Japan’s auto industry, is considering building a ¥100 billion plant in the US to expand sales to Japanese automakers operating in North America.

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The prize is an expected tenfold increase in demand for aluminum sheet here in the US, where stricter fuel economy standards have ignited a race among automakers to save weight and boost the efficiency of new models, driving up demand for the lightweight metal.

The Indian aluminum cash price saw the biggest increase at 2.0%, finishing at INR 113.85 ($1.85) per kilogram for Monday, March 2. The 3-month price of aluminum saw a 0.6% decline on the LME to $1,806 per metric ton. On the LME, the primary aluminum cash price declined 0.2% to $1,794 per metric ton.

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Chinese aluminum closed mixed on Monday. The cash price of Chinese aluminum inched up 0.2% to CNY 12,850 ($2,053) per metric ton. Chinese aluminum billet prices rose 0.2% to CNY 12,860 ($2,055) per metric ton. Chinese aluminum bar prices inched up 0.2% to CNY 13,640 ($2,179) per metric ton. The price of Chinese aluminum scrap saw essentially no change for the fifth day in a row, remaining around CNY 12,500 ($1,997) per metric ton.

The London Metal Exchange today said it is taking further steps to improve operations at its warehouses, as changes introduced on Feb. 1 have had little impact on aluminum warehouse bottlenecks for physical delivery.

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Large queues have built up at some of the warehouses dotted around the world that are operated under the LME’s rules. That has caused financial pain, but also operational inconvenience to companies that use aluminum.

The new rules introduced recently included forcing warehouses with a supply bottleneck of more than 50 days to take more metal out than they have taken in until waiting times fall.

Today, however, the LME recognized that more has to be done to satisfy both the Financial Conduct Authority, which regulates the LME’s operations, and more broadly, the users of the aluminum market.

In documents published on Monday, the LME said it would launch another round of consultations through March 30. It will also provide more details in its weekly Commitment of Traders report, to help make information more widely available, and launch an aluminum premium contract, which has been under discussion for some time, in October.

* Get the complete prices every day on the MetalMiner IndX℠

Following a three-day flat streak, the price of Chinese aluminum billet dropped by 0.9% to end at CNY 12,830 ($2,051) per metric ton on Friday, February 27. After three straight days of no change, the cash price of Chinese aluminum decreased by 0.7% to CNY 12,820 ($2,049) per metric ton. Friday saw the price of Chinese aluminum bar drift down 0.7% to CNY 13,610 ($2,175) per metric ton after three quiet days. The price of Chinese aluminum scrap was unchanged at CNY 12,500 ($1,998) per metric ton.

At $1,816, the aluminum 3-month price finished the market day on the LME up 0.8% per metric ton. On the LME, the cash price of primary aluminum increased 0.8% to $1,798 per metric ton. The Indian aluminum cash price inched up 0.7% to INR 111.60 ($1.81) per kilogram.

Red Brick Brewery will offer its beer in Novelis‘ evercan certified 90% recycled content aluminum can sheet in the US.

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Novelis and Red Brick have come up with a closed-loop recycling system for the brewery’s used beverage cans. The cans from the brewery will be returned to a nearby Novelis recycling center, where these will be recycled into new evercan sheet.

Novelis debuted evercan last year but has struggled to get big manufacturers to use it simply because most of them do not want to change their processes to allow a specialty recycled can sheet to take up a significant portion of their purchases. Companies such as MillerCoors and Coca-Cola do not want their production to be dependent on any one supplier.

With a decline of 0.8% to INR 110.80 ($1.79) per kilogram on Thursday, February 26, the cash price of primary Indian aluminum recorded the biggest decline of the day. The primary aluminum cash price saw a 0.5% decline on the LME to $1,784 per metric ton. On the LME, the aluminum 3-month price declined 0.4% to $1,801 per metric ton.

* Get the complete prices every day on the MetalMiner IndX℠

Chinese aluminum prices closed flat for the day. The price of Chinese aluminum scrap saw essentially no change for the fifth day in a row, remaining around CNY 12,500 ($1,997) per metric ton. The price of Chinese aluminum billet continues hovering around CNY 12,940 ($2,067) per metric ton for the fifth day in a row. The price of Chinese aluminum bar remained essentially flat at CNY 13,700 ($2,189) per metric ton. The cash price of Chinese aluminum saw little movement at CNY 12,910 ($2,063) per metric ton.

Aluminum physical delivery premiums finally started to fall this week. MetalMiner’s Stuart Burns wrote that speculation is ongoing as to what is behind greater availability but most attribute it to a combination of slow demand in Europe, rising exports from China and traders/funds being unable to roll material over in financing deals due to the flat forward curve on the London Metal Exchange.

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The aluminum 3-month price closed last week at $1,801 per metric ton, after a 1.0% drop on the LME. Following a 0.8% drop on the LME, the primary aluminum cash price finished the week at $1,784 per metric ton.

Following a 1.6% decline to INR 110.80 ($1.79) per kilogram, the cash price of primary Indian aluminum finished as the week’s biggest mover on the weekly Aluminum MMI®.

Chinese aluminum prices were flat for the week. The cash price of Chinese aluminum remained steady from the previous week at CNY 12,910 ($2,063) per metric ton. At CNY 13,700 ($2,189) per metric ton, the week finished with no movement for Chinese aluminum bar. At CNY 12,940 ($2,067) per metric ton, the price of Chinese aluminum billet did not change since the previous week.

* Get the complete prices every day on the MetalMiner IndX℠

The price of Korean 3003 coil premium over 1050 sheet rose 0.3% to KRW 3,847 ($3.50) per kilogram after falling 4.4% during the previous week. The price of Korean 5052 coil premium over 1050 sheet rose 0.3% to KRW 3,997 ($3.63) per kilogram after falling 4.3% during the previous week. Prices for European 5083 plate remained constant, closing the week at EUR 2,897 ($3,293) per metric ton. European 1050 aluminum prices held steady from the previous week at EUR 2,617 ($2,974) per metric ton.

The Aluminum MMI® collects and weights 12 global aluminum price points to provide a unique view into aluminum price trends. For more information on the Aluminum MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

Non-Chinese aluminum production was unchanged in January, according to the latest figures from the International Aluminum Institute (IAI).

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Producers are still holding aluminum capacity line in terms of keeping smelters offline in the face of low prices and historical stocks overhang, Reuters’ Andy Home wrote.

Their continued discipline is a subject of much market conjecture, Home said.

A combination of lower London Metal Exchange (LME) basis price and softer physical premiums, particularly in Europe, has seen the all-in price slide back to just above $2,100 per tonne from over $2,450 as recently as November.

On Wednesday, February 25, the cash price of primary aluminum experienced the biggest change, rising 1.1% on the LME to $1,792 per metric ton. On the LME, the aluminum 3-month price gained 0.9% to finish at $1,809 per metric ton. Following a two-day drop, the Indian aluminum cash price increased by 0.7% to INR 111.70 ($1.80) per kilogram.

* Get the complete prices every day on the MetalMiner IndX℠

Chinese aluminum prices closed flat for the day. The price of Chinese aluminum scrap remained essentially flat at CNY 12,500 ($2,001) per metric ton. For the fifth consecutive day, the price of Chinese aluminum billet held flat at CNY 12,940 ($2,071) per metric ton. The price of Chinese aluminum bar held steady at CNY 13,700 ($2,193) per metric ton. The Chinese aluminum cash price was unchanged at CNY 12,910 ($2,066) per metric ton.

Aluminum producer UC Rusal PLC said Wednesday it swung to a net profit last year thanks to a recovery in the metal’s price and a slide in the ruble’s value that helped boost its profit margins.

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The Russian aluminum giant, which is listed in Hong Kong, said its net profit for 2014 was $293 million, a sharp recovery from a net loss of $3.32 billion in 2013. Rusal’s improved earnings came despite a 4.1% fall in revenue and a 6.6% drop in its aluminum output to 256,000 tons last year. That beat even the most positive expectations.

The company said “stringent” cost control and its decision to shut down inefficient smelters helped it return to profitability. Rusal’s earnings before interest, tax, depreciation and amortization surged to $1.5 billion compared with $870 million in 2013. Chief Executive Vladislav Soloviev told the Wall Street Journal the company “has no plans to restart any mothballed aluminum capacity.”

Following two days of increases on the LME, the cash price of primary aluminum dropped by 2.3% to end at $1,773 per metric ton on Tuesday, February 24. The 3-month price of aluminum saw a 2.0% decline on the LME to $1,793 per metric ton. The Indian aluminum cash price weakened by 0.7%, settling at INR 110.95 ($1.78) per kilogram.

* Get the complete prices every day on the MetalMiner IndX℠

Chinese aluminum prices closed flat for the day. The price of Chinese aluminum scrap saw essentially no change for the fifth day in a row, remaining around CNY 12,500 ($1,998) per metric ton. The price of Chinese aluminum billet held steady at CNY 12,940 ($2,068) per metric ton. The price of Chinese aluminum bar saw little movement at CNY 13,700 ($2,189) per metric ton. The Chinese aluminum cash price was unchanged at CNY 12,910 ($2,063) per metric ton.

Russian aluminum producer UC Rusal‘s fourth-quarter core profit is expected to rise sharply because of a slump in the ruble against the dollar, a Reuters poll of seven banks showed. The earnings, to be published on Wednesday, are forecast to rise six times year-on-year and increase 36% compared with the previous quarter.

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Rusal has a primary listing in Hong Kong and secondary listings in Paris and Moscow. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) are forecast to rise to $637 million in the October-December quarter, according to the average forecast in the survey.

With a 0.7% increase over the past day, the cash price of primary aluminum was the biggest mover on the LME, closing at $1,815 per metric ton on Monday, February 23. The Indian aluminum cash price saw a 0.7% decline to INR 111.70 ($1.80) per kilogram. The 3-month price of aluminum rose by 0.5% on the LME to $1,830 on Monday after remaining flat for two days.

* Get the complete prices every day on the MetalMiner IndX℠

Chinese aluminum prices were flat for the day. For the fifth day in a row, the price of Chinese aluminum scrap remained essentially flat at CNY 12,500 ($1,999) per metric ton. The price of Chinese aluminum billet remained essentially flat at CNY 12,940 ($2,069) per metric ton. Chinese aluminum bar stayed flat at around CNY 13,700 ($2,191) per metric ton. The cash price of Chinese aluminum saw little movement on Monday at CNY 12,910 ($2,065) per metric ton.

Premiums for Asian aluminum are set to slip from record highs as China ramps up exports of semi-manufactured products, leaving regional producers searching for buyers for their surplus metal.

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Premiums, the surcharge for obtaining physical metal, have nearly doubled in the past two years outside of China after Western producers cut supply due to years of low prices.

A backlog at London Metal Exchange warehouses and financing demand from Western banks earning profit on stored metal also tightened supply.

Following a two-day decline on the LME, the cash price of primary aluminum climbed up 0.3% to end at $1,802 per metric ton on Friday, February 20. After a couple of days of decreasing prices, the Indian aluminum cash price held steady at INR 112.50 ($1.81). On the LME, the aluminum 3-month price showed little movement last Friday, hovering around $1,820 per metric ton.

* Get the complete prices every day on the MetalMiner IndX℠

Chinese aluminum prices closed flat for the day. For the fifth consecutive day, the price of Chinese aluminum scrap held flat at CNY 12,500 ($1,998) per metric ton. The price of Chinese aluminum billet saw little movement at CNY 12,940 ($2,068) per metric ton. The price of Chinese aluminum bar showed little movement last Friday at CNY 13,700 ($2,190) per metric ton. The cash price of Chinese aluminum remained essentially flat at CNY 12,910 ($2,064) per metric ton.

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