LME aluminum

Novelis Inc. was forced to import aluminum can sheet from Asia and South America to make up for lost output from a 3-week outage at its US joint venture rolling mill in January, Chief Executive Officer Phil Martens said on Monday.

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The mill, which Novelis co-owns with Tri Arrows Aluminum, lost 20,000-25,000 tons of can sheet, Martens said in a conference call after the release of third-quarter to end-December results for the world’s No. 1 flat-rolled products maker. Novelis brought in can sheet from its own operations in Asia and South America after the Russellville, Ky.-based Logan Aluminum mill’s “unexpected” outage between Dec. 29 and Jan. 17, Martens said.

Novelis reported net income of $46 million in the third quarter, up from $13 million in the same period the prior year, driven by an increase in shipments of rolled aluminum products.

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The cash price of primary Chinese aluminum saw the biggest upwards shift for the day, rising 0.8% to close at CNY 13,120 ($2,098) per metric ton on Friday, February 6. Chinese aluminum bar prices inched up 0.8% to CNY 13,130 ($2,100) per metric ton. After a 0.8% increase, Chinese aluminum scrap finished the day at CNY 12,600 ($2,015) per metric ton. The price of Chinese aluminum billet saw essentially no change for the fifth day in a row, remaining around CNY 13,200 ($2,111) per metric ton.

The aluminum 3-month price saw a 0.7% decline on the LME to $1,862 per metric ton. The cash price of primary aluminum weakened by 0.7% on the LME, settling at $1,849 per metric ton. The Indian aluminum cash price increased 0.5% to INR 117.00 ($1.90) per kilogram.

A team from Pohang University of Science and Technology, South Korea, have manipulated the structure of an iron-aluminum alloy to create a new kind of material that could find application in everything from bicycles to airplanes. South Korean steel giant POSCO is even starting trials of the new alloy.

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Steel is renowned for its strength and low price, but is very heavy. To make use of it in scenarios that demand light weight— without resorting to buying titanium—material scientists often alloy it with aluminum, which is light and also mercifully cheap. The mixture of aluminum and steel also usually includes a sprinkling of manganese to make it less brittle, but even then, the material is still usually too brittle for use in vehicles.

Now, the team from South Korea has added nickel to the mixture. The addition of this metal brings about a reaction with some of the contained aluminum, forming what are known as B2 crystals. Sitting both within the grains of steel in the alloy and at their boundaries too, the crystals—just a few nanometers in size—resist shear forces in the material. Gizmodo has the full story of the new metal recently written about the research team behind in the weekly journal Nature.

The aluminum 3-month price fell 0.7% on Thursday, February 5 to $1,875 per metric ton on the LME, making it the day’s biggest mover. The primary aluminum cash price changed direction with a 0.4% drop. After two days of improving prices, the metal finished at $1,862 per metric ton on the LME. After improving for two days, the cash price of primary Indian aluminum declined 0.4% to INR 116.40 ($1.88) per kilogram.

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Chinese aluminum prices closed flat for the day. The price of Chinese aluminum scrap steadied at CNY 12,500 ($2,001) per metric ton following two-days of increases. For the fifth day in a row, the price of Chinese aluminum billet remained essentially flat at CNY 13,200 ($2,113) per metric ton. After a couple of days of improving prices, the price of Chinese aluminum bar held steady at CNY 13,020 ($2,084). The cash price of Chinese aluminum ended a two-day climb, settling at CNY 13,010 ($2,083) per metric ton.

This week the already clear-as-mud aluminum market got a little murkier when the International Aluminum Institute said it would stop reporting stock numbers.

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The IAI said what it receives is simply too incomplete to give any real indication of how much aluminum is out there in on-warrant storage. Editor-At-Large Stuart Burns agrees and explains what that lack of information has done to physical delivery premiums.

Korean 3003 coil premium over 1050 sheet finished as the week’s biggest mover on the weekly Aluminum MMI® after dropping 5.3% and landing at KRW 4,110 ($3.77) per kilogram. Korean 5052 coil premium over 1050 sheet finished the week at KRW 4,260 ($3.91) per kilogram after falling 5.1%. A 4.7% jump caught the week’s heaviest change for European 1050 aluminum. European 5083 plate rose 1.9% over the past week to EUR 2,897 ($3,279) per metric ton.

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Chinese aluminum prices were mixed for the week. The cash price of Chinese aluminum rose 2.7% to CNY 13,010 ($2,083) per metric ton after falling 0.5% during the previous week. The price of Chinese aluminum bar rose 2.7% to CNY 13,020 ($2,084) per metric ton after falling 0.5% during the previous week. The price of Chinese aluminum scrap rose 2.5% to CNY 12,500 ($2,001) per metric ton after falling 0.8% during the previous week.

The cash price of primary Indian aluminum rose 3.1% to INR 116.40 ($1.88) per kilogram after falling 2.1% during the previous week. The aluminum 3-month price rose 0.9% on the LME over the past week to $1,875 per metric ton. The primary aluminum cash price rose 0.7% on the LME over the past week to $1,862 per metric ton. This was the third week in a row of increasing prices.

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.

Ball Corp., a US maker of beverage cans and jars, is in talks to acquire UK rival Rexam Plc for about 4.3 billion pounds ($6.6 billion) in what would be the industry’s largest deal.

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Ball, the largest producer of recyclable beverage cans in the world, made a cash-and-stock proposal that values Rexam at 610 pence a share, London-based Rexam said in a statement Thursday. Under UK takeover rules, Ball must decide whether to make a formal bid by March 5, Rexam said.

The offer represents a premium to Rexam’s closing price yesterday. The shares jumped as much as 29% and traded at 548 pence at 3:03 p.m. in London, Bloomberg reported.

The deal would be the largest for a metal- or glass-container maker, according to data compiled by Bloomberg, and is the latest sign of consolidation in the packaging industry. News of talks between Broomfield, Colorado-based Ball and Rexam comes a week after Rock-Tenn Co. and MeadWestvaco Corp. in the US agreed to merge to create the world’s second-largest packager.

The aluminum 3-month price saw the biggest increase at 1.3% on the LME, finishing at $1,889 per metric ton for Wednesday, February 4. On the LME, the primary aluminum cash price gained 1.0% to finish at $1,870 per metric ton. The Indian aluminum cash price inched up 0.7% to INR 116.85 ($1.90) per kilogram.

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Chinese aluminum prices were mixed for the day. Chinese aluminum scrap gained 0.8% to finish at CNY 12,500 ($1,998) per metric ton. The cash price of Chinese aluminum rose 0.8% to CNY 13,010 ($2,080) per metric ton. After a 0.8% increase, Chinese aluminum bar finished the day at CNY 13,020 ($2,081) per metric ton. For the fifth day in a row, the price of Chinese aluminum billet remained essentially flat at CNY 13,200 ($2,110) per metric ton.

The monthly Aluminum MMI® registered a value of 89 in February, on par with January’s value. On market news this month, we’ve had the following:

Alcoa, Inc. reported strong earnings in January. However that hasn’t really helped push the stock price higher. The company’s stock surged in 2014 but it’s been flat since July 2014. Despite strong earnings and optimistic future prospects, it looks like traders are unwilling to bet higher on the stock as long as aluminum prices don’t move up.

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The International Aluminum Institute (IAI) stopped reporting global inventory stocks. Apparently, the numbers reported are more confusing than not having a number at all. Good thing we don’t really pay attention to inventory levels when analyzing prices

Aluminum_Chart_February-2015_FNL

Moving now to price: aluminum keeps holding relatively well despite the big commodities sell-off. It looks clear that traders have higher expectations for aluminum than for other commodities, but will that be enough to support prices?

It’s hard to make predictions at this point, but the environment is not helping, for sure. First, commodities keep falling as oil sinks and this might punish aluminum even more since low oil prices won’t help encourage the use of lightweighted cars. Second, in January the dollar hit an 11-year high and finally, commodity weakness is spreading into base metals.

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United Co. Rusal, the world’s largest aluminum producer, will keep 700,000 metric tons of output it idled in 2013 and 2014 permanently shut, helping to buoy prices of the metal.

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“We cut production to 3.6 million tons last year and we are not planning to reopen the mothballed capacity, regardless of the price,” Chief Executive Officer Vladislav Soloviev said in an interview with Bloomberg News in Moscow this week. “Those plants were the least effective among our assets, so we are dismantling them now.”

Aluminum prices have risen about 13% in the last year, and the market, excluding China, expanded by 7%.

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The cash price of primary Chinese aluminum saw the biggest upwards shift for the day, rising 1.7% to close at CNY 12,910 ($2,062) per metric ton on Tuesday, February 3. Prices for Chinese aluminum bar have gained increasing momentum since Wednesday, January 28. After climbing 1.7%, the metal closed at CNY 12,920 ($2,063) per metric ton. On the tail of a three-day flat streak, the price of Chinese aluminum scrap rose by 1.6%, settling at CNY 12,400 ($1,980) per metric ton. The price of Chinese aluminum billet remained essentially flat at CNY 13,200 ($2,108) per metric ton.

On the LME, the 3-month price of aluminum increased 1.0% to $1,865 per metric ton. On the LME, the cash price of primary aluminum rose 0.8% to $1,851 per metric ton. At INR 116.00 ($1.88), the Indian aluminum cash price finished the market day up 0.6% per kilogram.

The International Aluminum Institute (IAI) has stopped reporting global inventory stocks, in another blow to transparency for a metal whose price, critics say, has been skewed by big banks and trading houses.

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In a statement, the IAI said the aluminum stocks numbers it receives from global smelters had become incomplete to the point where it would be misleading to carry on reporting them.

“(We) understand that many analysts … have used the IAI inventory reports as part of their information-gathering process, however, we do not consider the data … is now adequately reflecting a true picture of global producer stocks,” said the IAI.

Problems began in the second half of last year when 35 smelters, or up to a third of smelters currently reporting stocks figures to the IAI, either stopped reporting or had difficulties reporting on a monthly basis.

Weakening prices changed direction when the Indian aluminum cash price rose 2.7% on Monday, February 2 to INR 115.30 ($1.86) per kilogram. On the LME, the cash price of primary aluminum rose 0.8% to $1,837 per metric ton. On the LME, the aluminum 3-month price rose 0.8% to $1,846 per metric ton.

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Chinese aluminum prices were mixed for the day. The cash price of Chinese aluminum inched up 0.3% to CNY 12,700 ($2,032) per metric ton. Chinese aluminum bar prices inched up 0.3% to CNY 12,710 ($2,034) per metric ton. The price of Chinese aluminum scrap remained steady at CNY 12,200 ($1,952) per metric ton. The price of Chinese aluminum billet held steady at CNY 13,200 ($2,112) per metric ton.

While 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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While copper prices are down 13% this year and iron ore has slipped 11%, aluminum has gained on the year. 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.

On Friday, January 30, the day’s biggest mover was the aluminum cash price, which saw a 1.5% decline on the LME to $1,822 per metric ton. On the LME, the aluminum 3-month price fell 1.4% to $1,831 per metric ton. The Indian aluminum cash price weakened by 0.6%, settling at INR 112.25 ($1.82) per kilogram.

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 automakers.

“Aluminum looks very different from other commodities,” Oleg Deripaska, president of the world’s largest producer, United Co. Rusal, told the Automotive News in an interview. “If we look at the developments which we made to develop new alloys, new applications in cars, construction, packaging and manufacturing, I think this is a reward which we must have for the last seven years of suffering.”

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Chinese aluminum prices closed flat for the day. The cash price of Chinese aluminum flattened at CNY 12,660 ($2,027) following two-days of declines. Following two days of downward movement, the price of Chinese aluminum bar held steady at CNY 12,670 ($2,029) per metric ton. The price of Chinese aluminum scrap showed little movement last Friday at CNY 12,200 ($1,953) per metric ton. The price of Chinese aluminum billet saw essentially no change for the fifth day in a row, remaining around CNY 13,200 ($2,113) per metric ton.

Automotive consumer website Edmunds.com bought a new, $52,000 Ford F-150 from Galpin Ford in Van Nuys, Calif., and then hit it twice with a sledgehammer to see how much it would cost to fix vs. a traditional steel-bodied truck.

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Edmunds’ dealer quoted more labor and repair time and, therefore, a higher repair price but Ford released a statement saying “with the proper tools and training, cosmetic repairs to aluminum body panels will take a similar amount of time as steel panel repairs.”

Automotive aluminum continued to grow this week with the opening of a new 81,000-sf Novelis recycling center in Oswego, NY. Some analysts are opining that, with its new uses, aluminum price is replacing copper as an overall indicator of economic health.

The week’s biggest mover on the weekly Aluminum MMI® was the cash price of primary Indian aluminum, which saw a 2.1% decline to INR 112.90 ($1.84) per kilogram. This comes on the heels of a 4.2% increase the week before. The 3-month price of aluminum rose 1.4% on the LME over the past week to $1,858 per metric ton. On the LME, a 1.0% gain landed the primary aluminum cash price at $1,849 per metric ton.

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Chinese aluminum prices were mixed for the week. The price of Chinese aluminum scrap fell 0.8% to CNY 12,200 ($1,954) per metric ton after rising 3.4% the week before. Following a 1.9% increase in the week prior, the Chinese aluminum cash price fell 0.5% last week to CNY 12,670 ($2,029) per metric ton. The price of Chinese aluminum bar fell 0.5% to CNY 12,680 ($2,030) per metric ton after rising 1.9% the week before.

Prices for Korean 3003 coil premium over 1050 sheet remained constant, closing the week at KRW 4,340 ($4.03) per kilogram. Following a steady week, prices for Korean 5052 coil premium over 1050 sheet closed flat at KRW 4,490 ($4.17) per kilogram. European 5083 plate prices held steady from the previous week at EUR 2,843 ($3,165) per metric ton. Closing at EUR 2,499 ($2,782) per metric ton, European 1050 aluminum remained unchanged for the week.

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.

The Australian reports there is talk of an aluminum metal merger between Rio Tinto’s Alcan division  and Alcoa.

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Industry gossip has been that the pair are planning to combine their aluminum smelting assets in Europe and North America in an attempt to counter the rise of the Chinese aluminum industry, as well as to blindside rival Glencore.

China has come to dominate the global aluminum industry in the space of 15 years, so there is a requirement for a pushback by Western producers, so the chatter goes.

On Thursday, January 29, the cash price of primary Indian aluminum fell by 0.7%, landing at INR 112.90 ($1.84) per kilogram and making it the day’s biggest mover. After a 0.1% increase, the cash price of primary aluminum finished the day on the LME at $1,849 per metric ton. The 3-month price of aluminum held steady yesterday on the LME, remaining around $1,858 per metric ton.

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Chinese aluminum closed mixed yesterday. The Chinese aluminum cash price declined 0.2% to CNY 12,670 ($2,029) per metric ton. Chinese aluminum bar finished the day down 0.2% to CNY 12,680 ($2,030) per metric ton. Chinese aluminum scrap stayed flat at around CNY 12,200 ($1,954) per metric ton. The price of Chinese aluminum billet was unchanged at CNY 13,200 ($2,114) per metric ton.

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