LME aluminum

For many years now, investors have turned to ‘Doctor Copper’ for an indication as to the health of the global economy. The red metal is used in everything from construction to kitchenware, and so it’s seen as a pretty accurate indicator of economic health.

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But some argue copper’s lost its mojo.

Eugen Weinberg, head of commodity research at Commerzbank, told the Wall Street Journal’s Moneybeat blog that all the red metal tells us about is the state of some large emerging markets, and, more specifically, China. It may even be in danger of going the way of the Baltic Freight Index – a previous barometer for trade activity based on transportation rates that has fallen out of favor (and was replaced by the Baltic Dry Index).

Aluminum, they say, may now be a better consultant.

“Copper’s relative position has deteriorated,” said Stephen Briggs, a base metals analyst at BNP Paribas. “Yes, it’s used in lots of different things, but … aluminum is [also] used widely.”

The aluminum market in more than twice the size of the copper market, and more than 50 million metric tons are produced every year, compared to 20 million tons of copper that is produced each year. It’s also used in a similarly vast range of products – from cans to cars.

On the downside, aluminum is more closely tied to oil and energy prices, because energy accounts for 40% of the cost of production. And critics say that distortions in the market, such as the high extra fee of getting the physical metal delivered, mean its thermometer isn’t better than copper’s.

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The cash price of primary aluminum closed up Wednesday, January 28 at $1,847 per metric ton, halting two days of weakening prices on the LME with a 1.6% shift. Following a two-day drop, the aluminum 3-month price increased by 1.6% on the LME to $1,857 per metric ton. The Indian aluminum cash price weakened by 0.5%, settling at INR 113.70 ($1.85) per kilogram.

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Chinese aluminum prices were mixed for the day. The Chinese aluminum cash price saw a 0.5% decline to CNY 12,690 ($2,033) per metric ton. Chinese aluminum bar prices saw a 0.5% decline to CNY 12,700 ($2,035) per metric ton. The price of Chinese aluminum scrap remained essentially flat at CNY 12,200 ($1,955) per metric ton. For the fifth consecutive day, the price of Chinese aluminum billet held flat at CNY 13,200 ($2,115) per metric ton.

Novelis Inc. recently unveiled a newly built $48 million aluminum recycling facility at its giant aluminum smelting facility near Oswego, New York, on Monday.

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The 81,000-square-foot new facility melts down scrap automotive aluminum and turns it into new aluminum. Up to 40 trailers, or 1 million pounds of automotive scrap, can be handled by the facility each day.

Much of the scrap initially being processed by the facility is coming from a Ford plant in Dearborn, Mich., that makes body panels for the 2015 F-150 pickup. Novelis has invested $400 million into its 1.6-million-square-foot plant over the last five years to fit it to supply aluminum to automakers such as Ford.

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On Tuesday, January 27, the day’s biggest mover was the price of Chinese aluminum scrap, which saw a 0.8% decline to CNY 12,200 ($1,950) per metric ton. This was the first move after three changeless days. The cash price of Chinese aluminum gained 0.5% to finish at CNY 12,750 ($2,038) per metric ton. Chinese aluminum bar prices rose 0.5% to CNY 12,760 ($2,040) 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.

On the LME, the primary aluminum cash price declined 0.7% to $1,818 per metric ton. The aluminum 3-month price weakened by 0.4% on the LME, settling at $1,828 per metric ton. The cash price of primary Indian aluminum fell 0.1% to INR 114.25 ($1.86) per kilogram.

We previously reported about the legal fight between Alcoa, Inc., and the state of North Carolina over over the Yadkin River, the site of four hydroelectric dams that once powered the aluminum producer’s Badin, N.C., smelter.

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In a recent Pittsburgh Post-Gazette article, the aluminum producer offered a vigorous defense its rights to continue to use the dams, and sell the power they create, after Alcoa idled the smelter in 2002 and permanently ended producing aluminum there 8 years later. North Carolina is refusing to renew a power generation license to Alcoa, one that had been granted in the past.

“It’s a clear threat to our property rights — and the rights of anyone who owns property along a waterway in North Carolina,” Ray Barham, the Alcoa official in charge of the company’s effort to relicense the dams, wrote in a post on Alcoa’s website.

In court papers, the company said North Carolina has never asserted ownership rights over the riverbed. In fact, the state recognized the company’s control of the property when it sought easements from Alcoa before building highway bridges over the river, the company noted in court documents.

“The state’s belated attempt to seize privately owned property would raise disturbing questions of constitutional dimensions even if supported by the facts,” Alcoa said in court papers.

About two dozen government, business, and civic groups support renewal of the license based on the company’s commitment to make environmental, recreational and other improvements along the river.

Governor Pat McCrory (R), however, is undeterred.

“The benefits of the Yadkin River belong to North Carolina’s people,” McCrory said in a statement when the lawsuit was filed. “We should be able to use it for North Carolina water needs and to create North Carolina jobs.”

On Monday, January 26, the day’s biggest mover was the cash price of primary aluminum, which saw a 1.9% decline on the LME to $1,830 per metric ton. On the LME, the aluminum 3-month price fell 1.9% to $1,835 per metric ton. The cash price of primary Indian aluminum remained essentially flat at INR 114.40 ($1.86) per kilogram.

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

Chinese aluminum prices were mixed for the day. The Chinese aluminum cash price weakened by 0.4%, settling at CNY 12,690 ($2,023) per metric ton. Chinese aluminum bar prices saw a 0.4% decline to CNY 12,700 ($2,024) per metric ton. Chinese aluminum scrap held its value yesterday at CNY 12,300 ($1,960) per metric ton. The price of Chinese aluminum billet remained essentially flat at CNY 13,200 ($2,104) per metric ton.

Aluminum stocks have risen to 413,000-419,900 metric tons in Japan, which is an all-time high, putting pressure on prices as some companies want to destock before March, the end of the Japanese financial year, market sources told Platts today.

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Aluminum stocks at 3 main Japanese ports had expanded by the end of December, according to trading house surveys.

With a 2.1% increase over the past day, the 3-month price of aluminum was the biggest mover on the LME, closing at $1,871 per metric ton on Friday, January 23. On the LME, the primary aluminum cash price rose 1.9% to $1,866 per metric ton. After improving for two days, the cash price of primary Indian aluminum declined 0.8% to INR 114.40 ($1.86) per kilogram.

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

Chinese aluminum prices were flat for the day. The cash price of Chinese aluminum showed little movement last Friday at CNY 12,740 ($2,053) per metric ton. The price of Chinese aluminum bar showed little movement last Friday at CNY 12,750 ($2,054) per metric ton. The price of Chinese aluminum scrap held steady at CNY 12,300 ($1,982) per metric ton. The price of Chinese aluminum billet was unchanged at CNY 13,200 ($2,127) per metric ton.

Chinese refined aluminum imports in December fell to a 6-year low as domestic production surged.

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Inbound shipments of primary aluminum shrank to 1,857 tons in December, a tumble from 76,060 tons the previous year, according to data from the General Administration of Customs on Friday. The monthly figure was the lowest since June 2008. Full-year imports slumped 27%f to 267,700 tons.

The cash price of primary Indian aluminum saw the biggest increase at 1.5%, finishing at INR 115.35 ($1.87) per kilogram for Thursday, January 22. The 3-month price of aluminum declined 0.1% on the LME to $1,832 per metric ton, after two days of improvement. Following a two-day rise on the LME, the cash price of primary aluminum flattened at $1,831.

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

Chinese aluminum closed mixed on Thursday. The cash price of Chinese aluminum rose 0.2% to CNY 12,730 ($2,049) per metric ton after a two-day drop. After falling for two days, the price of Chinese aluminum bar rose 0.2% to CNY 12,740 ($2,051) per metric ton. The price of Chinese aluminum scrap remained steady at CNY 12,300 ($1,980) 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 ($2,125) per metric ton.

Despite downward market pressure on all commodities, physical delivery premiums for aluminum kept rising this week.

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This is the fifth straight quarter of price increases. In England, the world’s first plastic-aluminum laminate (PAL) recycling center opened. PALs are those pouches you get that hold pet food, drinks or snacks. Recycling PALs could lead to a major shift in the packaging industries.

The week’s biggest mover on the weekly Aluminum MMI® was the cash price of primary Indian aluminum, which saw a 4.2% increase to INR 115.35 ($1.87) per kilogram. This comes on the heels of a 2.5% decline the week prior. The cash price of primary aluminum rose 3.7% on the LME to $1,831 per metric ton after falling 0.3% during the previous week. The aluminum 3-month price rose 2.8% on the LME to $1,832 per metric ton after falling 1.3% during the previous week.

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

Chinese aluminum prices were mixed for the week. The price of Chinese aluminum scrap rose 3.4% to CNY 12,300 ($1,980) per metric ton after falling 3.3% during the previous week. The Chinese aluminum cash price rose 1.9% to CNY 12,730 ($2,049) per metric ton after falling 2.1% during the previous week. The price of Chinese aluminum bar rose 1.9% to CNY 12,740 ($2,051) per metric ton after falling 2.1% during the previous week.

Closing at KRW 4,340 ($4.02) per kilogram, Korean 3003 coil premium over 1050 sheet remained unchanged for the week. Korean 5052 coil premium over 1050 sheet remained essentially flat from the previous week at KRW 4,490 ($4.16) per kilogram. At EUR 2,843 ($3,297) per metric ton, the price of European 5083 plate did not change since the previous week. European 1050 aluminum traded sideways last week, hovering around EUR 2,499 ($2,898) 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.

If you’ve ever had a Capri-Sun, or other food or drink from a metallic pouch, you’re likely familiar with plastic-aluminum laminates (PAL).

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PALs have long been used for toothpaste tubes and in recent years has gained popularity as pouches for food, drink and pet food. PALs are environmentally conscious over their product life-cycle because very little energy goes into their production and they are extremely light, cutting transport costs. These attributes, plus the fact they protects contents from light and air, make it attractive to manufacturers. Until now, however, they weren’t recyclable.

More than 15 years ago, materials scientists at Cambridge discovered a way to separate the aluminum contents of a PAL from their plastic ingredients using microwaves. Now, the first full-scale facility devoted to PAL recycling has opened in Luton, UK. The plant was designed, built and operated by Enval Limited, a spin-out company of Cambridge University. Gizmag has the whole story.

At $1,834 per metric ton, the aluminum 3-month price moved up 1.2% on Wednesday, January 21, making it the day’s biggest mover on the LME. At INR 113.60 ($1.84), the cash price of primary Indian aluminum finished the market day up 0.5% per kilogram. After a 0.2% increase, the cash price of primary aluminum finished the day on the LME at $1,829 per metric ton.

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Chinese aluminum closed mixed on Wednesday. The cash price of Chinese aluminum saw a 0.5% decline to CNY 12,710 ($2,045) per metric ton. The price of Chinese aluminum bar fell 0.5% to CNY 12,720 ($2,047) per metric ton. The price of Chinese aluminum scrap flattened at CNY 12,300 ($1,979) after two days of improvement. The price of Chinese aluminum billet held steady at CNY 13,200 ($2,124) per metric ton.

Last Friday 1,800 lots, approximately 45,000 metric tons, of the CME Group‘s Aluminum Midwest Premium (AUP) futures contract traded.

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In a week of extreme volatility in commodity markets, AUP open interest closed at 4,884 lots, up from 2,559 lots at the end of the previous week.

The cash price of primary aluminum saw the biggest upwards shift for the day, rising 1.5% on the LME to close at $1,825 per metric ton on Tuesday, January 20. After improving for two days, the Indian aluminum cash price declined 0.4% to INR 113.05 ($1.83) per kilogram. On the LME, the aluminum 3-month price inched up 0.2% to $1,812 per metric ton.

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Chinese aluminum prices were mixed for the day. At CNY 12,300 ($1,978), the price of Chinese aluminum scrap finished the market day up 0.8% per metric ton. Weakening prices followed two days of improvement as the cash price of Chinese aluminum dropped 0.5% to CNY 12,780 ($2,056) per metric ton. Following two days of rising prices, the price of Chinese aluminum bar dropped 0.5% to CNY 12,790 ($2,057) per metric ton. For the fifth consecutive day, the price of Chinese aluminum billet held flat at CNY 13,200 ($2,123) per metric ton.

Overcapacity in China’s beleaguered aluminum market will persist in the coming months, weighing on local prices and boosting the appeal of shipping aluminum products overseas, traders and analysts said.

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Increased product exports will help plug a supply deficit in the West, but will also fuel competition with Western producers. Exports from the world’s No.1 aluminum miner are already dragging on premiums – the cost of obtaining physical metal – in Asia.

“We certainly expect low (Chinese) prices to continue,” Paul Adkins, managing director of Beijing-based consultancy AZ-China, told Reuters.

On Monday, January 19, the day’s biggest mover was the Indian aluminum cash price, which saw a 1.2% increase to INR 113.45 ($1.83) per kilogram. At $1,798, the cash price of primary aluminum finished the market day on the LME up 0.9% per metric ton. After a 0.9% increase, the aluminum 3-month price finished the day on the LME at $1,808 per metric ton.

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Chinese aluminum closed mixed last Friday. Chinese aluminum scrap prices inched up 0.8% to CNY 12,200 ($1,965) per metric ton. The cash price of Chinese aluminum inched up 0.6% to CNY 12,850 ($2,070) per metric ton. At CNY 12,860 ($2,072), the price of Chinese aluminum bar finished the market day up 0.6% per metric ton. The price of Chinese aluminum billet was unchanged at CNY 13,200 ($2,126) per metric ton.

Alcoa Inc. has used an aluminum price including benchmark futures and regional premiums that are similar to current levels for its 2015 free-cash flow forecast of $500 million, Chief Financial Officer William Oplinger said recently.

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In its fourth-quarter earnings call, Oplinger declined to say what aluminum price the company used for its 2015 projects, but said they were “similar to the market situation that we have today”.

That included the London Metal Exchange futures benchmark, regional premiums and currency effects.

His comments are likely to stir the debate over the direction of physical premiums, which are paid on top of futures for physical delivery and hit record levels.

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At CNY 12,770 ($2,065) per metric ton, the cash price of primary Chinese aluminum moved up 2.2% on Friday, January 16, making it the day’s biggest mover. After hitting a 30-day low of CNY 12,780 ($2,067) per metric ton on Wednesday, January 14, the price of Chinese aluminum bar rose 2.2% last Friday. After a 1.7% increase, Chinese aluminum scrap finished the day at CNY 12,100 ($1,957) per metric ton. The price of Chinese aluminum billet held steady at CNY 13,200 ($2,134) per metric ton.

The Indian aluminum cash price rose 1.3% to INR 112.10 ($1.81) per kilogram. At $1,782, the cash price of primary aluminum finished the market day on the LME up 0.9% per metric ton. On the LME, the 3-month price of aluminum gained 0.6% to finish at $1,793 per metric ton.

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