Page 63 from: April 2005
LME stocks and other positive funda-
mentals, zinc prices are expected to
remain at high levels during the com-
ing months. The LME three-month
price recently reached its highest lev-
el for more than seven years while
special high-grade zinc has soared
from US$ 1291 to US$ 1429. High-
M A R K E T A N A L Y S I S
Aluminium
Secondary aluminium ingot prices
in China and the Far East have not
followed LME increases but instead
have remained static. As a conse-
quence, secondary grade aluminium
scrap prices have increased by only
around US$ 10-15 per tonne com-
pared to an increase in the terminal
market of some US$ 60 per tonne.
Chinese demand for higher-grade ex-
trusion scrap has also shown no im-
provement because of an abundance
of primary ingots in the domestic
market.
On a more positive note, strong
demand for deoxidants has persisted
in most of the Asia Pacific region due
to strong steel production. At the
time of writing, China’s secondary
aluminium producers were hopeful
that the export duties imposed on
January 1 this year would be can-
celled from April onwards.
The differential between primary
aluminium prices on the LME and
on the Shanghai Metals Exchange
has reached historical highs and is
currently equivalent to around
US$ 362.50 or € 270.70 per tonne.
While this has led to extremely low
domestic primary aluminium prices
compared to those available interna-
tionally, some traders in China be-
lieve domestic aluminium prices
have bottomed out and will improve
in the near term. This optimism has
translated into higher demand, with
a corresponding increase in prices
for selected grades such as Zorba.
Copper
High LME prices and softer de-
mand have led to a considerable re-
duction in premiums for high-grade
copper scrap over the last month. It
also appears that Far East con-
sumers have covered most of their
requirements under long-term con-
tracts. They have been reluctant to
pay the highest prices under current
market conditions and, as a result,
high-grade materials are trading al-
most at a discount to LME levels for
spot business.
The Chinese market has shown
no interest in high-grade copper
scrap as buyers have been able to
meet most of the domestic demand
from copper units via, for example,
cable recovery activities. Prices in
China for cables as well as for other
types of low-grade copper scrap
have been well supported due to
strong demand in the domestic mar-
ket. Electric motors in the east of
China have been trading above
US$ 500 per tonne and could rise
even higher, it is believed, if there
is a further increase in domestic
steel scrap prices.
Despite good demand in China
and the Far East for No 2 copper
scrap, Berry and Candy, prices have
not been as robust as those for the
lower-grade materials. Many Chi-
nese buyers of Birch/Cliff are of the
opinion that the markets have
peaked and that a correction is im-
minent. This, along with the strong
backwardation, has prompted buy-
ers to adopt a cautious approach
when making purchasing decisions.
Unlike for No 2 copper scrap,
prices of the brass scrap grades Hon-
ey and Night have been very strong
in China, India and the Far East. In-
deed, brass scrap prices are current-
ly at historical highs due to a combi-
nation of strong physical demand as
well as high zinc and copper prices.
Although prices for finished brass
products have not increased and
buyers are facing a squeeze on mar-
gins, most users in the region have
Recycling International • April 2005 63
Aluminium
LM
E
st
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ks
(x
1
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m
et
ri
c
to
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)
500
700
900
1100
1300
1500
1500
1600
1700
1800
1900
2000
LM
E
pr
ic
es
(i
n
U
.S
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ol
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/M
T)
FEBRMAR MARAPR MAY AUG SEPT OCT NOV DEC JAN
Copper
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0
100
200
300
400
500
2400
2600
2800
3000
3200
3400
LM
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pr
ic
es
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FEBRMAR MARAPR MAY AUG SEPT OCT NOV DEC JAN
Lead
LM
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(x
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m
et
ri
c
to
nn
es
)
20
40
60
80
100
120
600
700
800
900
1000
1100
LM
E
pr
ic
es
(i
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FEBRMAR MARAPR MAY AUG SEPT OCT NOV DEC JAN
grade zinc prices in Germany have
risen by US$ 100 to US$ 1524, while
old zinc scrap has sky-rocketed to
US$ 948. In France, meanwhile, old
zinc alloy scrap has seen its price in-
crease by around US$ 200 to US$ 925,
while hard spelter zinc was recently
trading at US$ 977.
Asia & Pacific Rim
Strong demand for deoxidants
