LME aluminum

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.

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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.

Premiums for aluminum in Asia 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.

Korean 1050 aluminum sheet finished as the week’s biggest mover on the weekly Aluminum MMI® after dropping 4.5% and landing at KRW 3,786 ($3.41) per kilogram. At KRW 3,836 ($3.46) per kilogram, the price of Korean 3003 coil premium over 1050 sheet finished the week down 4.4%. The price of Korean 5052 coil premium over 1050 sheet fell 4.3% over the past week to KRW 3,986 ($3.59) per kilogram. This was the third week in a row of declining prices. European 5083 plate prices held steady from the previous week at EUR 2,897 ($3,279) per metric ton.

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

Chinese aluminum prices were up for the week. The price of Chinese aluminum billet rose 1.3% to CNY 12,940 ($2,069) per metric ton after falling 3.2% during the previous week. The cash price of Chinese aluminum rose 1.1% to CNY 12,910 ($2,064) per metric ton after falling 1.8% during the previous week. At CNY 13,700 ($2,191) per metric ton, the price of Chinese aluminum bar finished the week 1.0% higher.

The cash price of primary Indian aluminum closed last week at INR 112.60 ($1.81) per kilogram, after a 1.5% drop. With a 0.8% decrease on the LME, the primary aluminum cash price closed the week at $1,797 per metric ton. The aluminum 3-month price saw a 0.7% drop this week on the LME, closing at $1,819 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.

US drink can and jar maker Ball Corp. agreed to buy British rival Rexam Plc in a sweetened 4.43 billion pounds ($6.85 billion) deal, creating an industry giant that can better manage capital spending and costs as aluminum premiums rise.

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The cash-and-stock deal would combine the world’s two largest beverage can makers by volume, making the combined entity the go-to supplier for many customers looking at single contracts across markets. Together, the companies account for 60% of the beverage can supply in North America, 69% in Europe and 74%in Brazil, according to Morningstar analysts.

Shares in Rexam, which makes cans for Coca-Cola Co. and Anheuser-Busch InBev, rose more than 6 percent to 571.5 pence in early trading before falling back, and were significantly below the indicated price of 628 pence per share.

The offer was at a 17 percent premium to Rexam’s Wednesday close. Ball’s shares closed at $77.16 on Wednesday.

The cash price of primary aluminum saw the biggest decline of the day, dropping 0.8% on the LME to close at $1,800 per metric ton on Wednesday, February 18. On the LME, the 3-month price of aluminum declined 0.5% to $1,820 per metric ton. The cash price of primary Indian aluminum saw a 0.1% decline to INR 113.80 ($1.83) per kilogram.

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

Chinese aluminum prices closed flat for the day. Chinese aluminum scrap held its value on Wednesday at CNY 12,500 ($1,998) per metric ton. Chinese aluminum billet stayed flat at around CNY 12,940 ($2,068) per metric ton. The price of Chinese aluminum bar remained essentially flat at CNY 13,700 ($2,190) per metric ton. The Chinese aluminum cash price saw little movement yesterday at CNY 12,910 ($2,063) per metric ton.

Kaiser Aluminum Corp. beat Wall Street expectations on revenue and earnings for the fourth quarter and full year.

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The Foothill Ranch, Calif.-based maker of semi-fabricated aluminum products posted net income of $15.6 million, or 85 cents per share, for the quarter. Earnings totaled $71.8 million, or $3.86 per share, for the year.

Net income, adjusted for non-recurring gains, was $62.8 million or $3.38 per share, for the full year and $15.5 million or 85 cents per share for the fourth quarter. Analysts expected earnings of 82 cents for the quarter and $3.37 per share for the year.

With a decline of 0.9% on the LME to $1,814 per metric ton on Tuesday, February 17, the cash price of primary aluminum recorded the biggest decline of the day. The aluminum 3-month price saw a 0.9% decline on the LME to $1,829 per metric ton. The cash price of primary Indian aluminum weakened by 0.7%, settling at INR 113.95 ($1.83) per kilogram.

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

Chinese aluminum prices were mixed for the day. The cash price of Chinese aluminum declined 0.2% to CNY 12,910 ($2,065) per metric ton. Chinese aluminum bar closed 0.1% lower at CNY 13,700 ($2,192) per metric ton. Chinese aluminum scrap stayed flat at around CNY 12,500 ($2,000) per metric ton. The price of Chinese aluminum billet showed little movement on Tuesday at CNY 12,940 ($2,070) per metric ton.

Aluminum stocks in China will balloon after the Chinese New Year holiday, as goods continue to arrive while consumption stagnates during the holiday, Shanghai Metals Market predicts.

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Holding steady on the LME, the aluminum cash price remained at $1,831 per metric ton for Monday, February 16. On the LME, the 3-month price of aluminum held steady around $1,846 per metric ton. The Indian aluminum cash price saw little movement last Friday at INR 114.80 ($1.85) per kilogram.

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

Chinese aluminum prices closed flat for the day. At CNY 12,500 ($2,004) per metric ton, the price of Chinese aluminum scrap was essentially unchanged. Chinese aluminum billet held its value last Friday at CNY 12,940 ($2,075) per metric ton. Chinese aluminum bar saw little change in its price last Friday at CNY 13,720 ($2,200) per metric ton. The Chinese aluminum cash price saw little movement last Friday, closing out around CNY 12,930 ($2,073) per metric ton.

A surge in aluminum exports from China is altering market dynamics for one of the world’s most heavily traded commodities. Because of quirks in China’s tax system, the trend involves reshaping the metal itself, the Wall Street Journal reports.

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Aluminum prices on the Shanghai futures exchange have dropped 8% in the last year to $2,081 a ton amid a sharp rise in supply, compared with a 4% increase in aluminum prices on the London Metal Exchange.

Chinese aluminum exports seem unattractive because the government applies a 15% export tax on each ton sold overseas, a measure that is designed to keep more output at home.

In practice, Chinese smelters are getting around the charge by masking their aluminum exports as semifinished products, also known as “semis,” analysts say. “Primary” aluminum is normally produced in ingots, but the metal can be relatively easily changed into forms that look like products such as door frames or hubcaps. Once exported, the semis can be remelted and recast into desired forms in the destination countries. Our own Stuart Burns wrote about the Chinese semis situation back in September.

The cash price of primary aluminum experienced the biggest price decline of the day, dropping 1.7% on the LME to close at $1,811 per metric ton on Thursday, February 12. On the LME, the 3-month price of aluminum fell 1.6% to $1,831 per metric ton. The cash price of primary Indian aluminum weakened by 0.7%, settling at INR 114.30 ($1.83) per kilogram.

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

Prices of Chinese aluminum were down across the board on Thursday. The cash price of Chinese aluminum saw a 0.9% decline to CNY 12,770 ($2,046) per metric ton. The price of Chinese aluminum billet fell to a 30-day low at CNY 12,780 ($2,047) per metric ton after shifting 0.9%. At CNY 13,560 ($2,172) per metric ton, Chinese aluminum bar fell 0.9% yesterday. The price of Chinese aluminum scrap declined 0.8% to CNY 12,400 ($1,986) per metric ton.

The International Aluminum Institute stopped reporting global inventory because of incomplete reports. This makes the world of aluminum much darker than it was before.

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Aluminum prices are also reaching a tipping point which may change their trend.

Korean 1050 aluminum sheet’s 7.6% decline made it this week’s biggest mover on the weekly Aluminum MMI®, closing at KRW 3,963 ($3.61) per kilogram. The price of Korean 3003 coil premium over 1050 sheet declined 2.4% over the past week, settling at KRW 4,013 ($3.65) per kilogram. Korean 5052 coil premium over 1050 sheet fell 2.3% over the past week to KRW 4,163 ($3.79) per kilogram. At EUR 2,897 ($3,279) per metric ton, the week finished with no movement for European 5083 plate.

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

Chinese aluminum prices were mixed for the week. In the past week, the price of Chinese aluminum bar shot up 4.1% to CNY 13,560 ($2,172) per metric ton. Chinese aluminum billet weakened by 3.2% to land at CNY 12,780 ($2,047) per metric ton. Following a 2.7% increase in the week prior, the Chinese aluminum cash price fell 1.8% last week to CNY 12,770 ($2,046) per metric ton.

The primary aluminum cash price fell 2.7% on the LME to $1,811 per metric ton after rising 0.7% the week before. Following a 0.9% increase in the week prior, the 3-month price of aluminum fell 2.3% on the LME last week to $1,831 per metric ton. The Indian aluminum cash price fell 1.8% to INR 114.30 ($1.83) per kilogram after rising 3.1% the week before.

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.

Last year, Chinese aluminum prices on the Shanghai Futures Exchange declined in the first quarter as some plants were idled.

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But increased subsidies from local governments concerned by the loss of employment and taxes resulted in capacity returning in the second half, helping to end a rally in prices.

The most active aluminum contract on the SHFE dropped about 8.5% in the first three months of last year, before rebounding almost 15% by the beginning of September.

It then fell sharply, ending the year at 13,140 yuan ($2,106) a tonne, some 13.4 percent below its September peak and 9.2%weaker over the year.

While Chinese aluminum prices were dragged lower in the second half by the general malaise of commodities, this was exacerbated by the re-commissioning of idled smelters.

As of the fourth quarter of last year, only 11 smelters, or 32% of China’s capacity, were profitable, according to an AZ China report on Jan. 26.

The tug-of-war between local authorities in China  and Beijing between loss-making smelters and the jobs and taxes the plants provide is causing havoc in China’s aluminum industry, Reuters reports.

If history is a guide, some smelters may be idled, but they can resume output rather quickly should prices improve.

The Ministry of Industry and Information Technology said in a report released Wednesday that closing smelters would be difficult, due to the loss of revenues, layoffs and debts of local governments. The ministry’s solution of encouraging smelters to merge with local power plants to cut electricity costs sounds workable, but even if this idea is pursued with vigor it’s unlikely to change the dynamics much this year, according to Reuters.

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With a decline of 1.0% to CNY 12,890 ($2,066) per metric ton on Wednesday, February 11, the cash price of primary Chinese aluminum recorded the biggest decline of the day. The price of Chinese aluminum billet fell to a 30-day low at CNY 12,900 ($2,068) per metric ton after shifting 1.0%. The price of Chinese aluminum bar fell 0.9% to CNY 13,680 ($2,193) per metric ton. Following a quiet couple of days, the price of Chinese aluminum scrap fell 0.8% yesterday to CNY 12,500 ($2,004) per metric ton.

The cash price of primary Indian aluminum declined 0.9% to INR 115.15 ($1.85) per kilogram. The primary aluminum cash price saw a 0.7% decline on the LME to $1,842 per metric ton. The 3-month price of aluminum weakened by 0.5% on the LME, settling at $1,861 per metric ton.

At a time when other commodities are slumping, aluminum is making a comeback as automakers under pressure to build more fuel-efficient cars increase their use of the lightweight metal.

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Aluminum is up this year while other metals have suffered large falls on the London Metal Exchange. Bloomberg News reports the rise is small but significant, marking an improvement from a year in which the price of aluminum fell to its lowest level since 2009. Meanwhile, producers including Alcoa Inc. and Rio Tinto Group predict demand will continue to rise over the next few years as the metal grows in importance to car makers.

“Technological advancements have made alloys of the metal stronger than steel,” Steve Man, an analyst at Bloomberg Intelligence, wrote in a report last week. “New stamping processes have enabled automakers to produce aluminum body parts that meet tight specifications. They can also make them in intricate shapes.”

On Tuesday, February 10, the day’s biggest mover was Chinese aluminum bar, which saw a 5.6% increase to CNY 13,810 ($2,210) per metric ton. After three essentially changeless days, the price of Chinese aluminum billet dropped 1.3% yesterday to CNY 13,030 ($2,085) per metric ton. The cash price of Chinese aluminum weakened by 0.4%, settling at CNY 13,020 ($2,084) per metric ton. Chinese aluminum scrap held its value yesterday at CNY 12,600 ($2,017) per metric ton.

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On the LME, the primary aluminum cash price declined 0.9% to $1,855 per metric ton. The 3-month price of aluminum weakened by 0.8% on the LME, settling at $1,869 per metric ton. The Indian aluminum cash price declined 0.6% to INR 116.20 ($1.87) per kilogram.

An Austrian steelmaker has found a way to fuse strips of steel and aluminum alloys in what could be part of a historic breakthrough.

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“They taught us in engineering school this was impossible,” Alois Leitner, who works for Linz-based Voestalpine AG which is Europe’s third-biggest steelmaker, told the Wall Street Journal.

Leitner’s work in a small lab on the outskirts of this industrial town near the Czech border seems simple enough—but these two basic metals are famously incompatible. Solving the riddle of how to combine them has long been considered a Holy Grail for big metals and auto companies.

Voestalpine’s process is neither easy nor cheap. The company uses a special solder and torches just hot enough to melt aluminum but not steel. The process, called cold metal transfer, employs an argon gas to avoid oxidation. Finally, the steel is coated with zinc to bind the steel, solder and aluminum.

The payoff for Voestalpine is potentially huge.

Under Chief Executive Wolfgang Eder, Voestalpine has developed an automotive niche market with BMW AG, Daimler AG’s Mercedes-Benz and Volkswagen AG, which owns Audi, Seat, Porsche and Bentley. “We are not competitive in commodity steel in a high-cost country like Austria,” Eder said in an interview. “We need to focus on high tech.”

The aluminum cash price closed as the biggest mover for Monday, February 9. Switching from a downward trend, the metal closed at $1,871 per metric ton following a 1.2% increase. The 3-month price of aluminum rose 1.2% on the LME to $1,884 per metric ton after a two-day drop. The cash price of primary Indian aluminum weakened by 0.1%, settling at INR 116.85 ($1.89) per kilogram.

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Chinese aluminum closed mixed on Monday. The cash price of Chinese aluminum saw a 0.4% decline to CNY 13,070 ($2,094) per metric ton. Chinese aluminum bar finished the day down 0.4% to CNY 13,080 ($2,096) per metric ton. Chinese aluminum scrap stayed flat at around CNY 12,600 ($2,019) per metric ton. The price of Chinese aluminum billet was unchanged at CNY 13,200 ($2,115) per metric ton.

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