Page 36 from: December 2016

36 December 2016

M A R K E T A N A L Y S I S

Non-Ferrous
Closed: November 24, 2016

The Trump Effect
There were steep increases in metals prices – notably for
copper – immediately following the US presidential elec-
tion victory of Donald Trump. The question is now whether
these gains can prove to be sustainable. LME cash prices
are at the following per-tonne levels (the corresponding
figures from our non-ferrous metals report at the end
of October are given in brackets): aluminium US$ 1765
(US$ 1701.50); copper US$ 5562 (US$ 4787); lead
US$ 2174.50 (US$ 2048); zinc US$ 2571.50 (US$
2374); and tin US$ 21 465 (US$ 20 875).

Aluminium
In the USA, secondary scrap consumers
are expressing concern over availability
going forward. At the same time, sup-
ply of high-quality aluminium scrap has
remained difficult in Europe.
Aluminium wire scrap (Achse) has been
trading at some US$ 1642 per tonne
in Germany and aluminium turnings
(Autor) at nearer US$ 1032. In the UK,
commercial pure cuttings have been
valued at US$ 1245-1345 per tonne,

loose old rolled cuttings at US$ 971-
1046 and commercial turnings at
US$ 784-847. In the Netherlands, new
pure aluminium scrap has attracted
around US$ 1177 per tonne of late
while first-quality old rolled aluminium
scrap has dropped to some US$ 952.
The German Aluminium Industry Associ-
ation has expressed ‘cautious optimism’
in the light metal’s growth prospects,
with a steady increase predicted for
Europe.

Compared to January-September 2015,
China’s primary aluminium production
fell 2.7% over the first three quarters
of the current year to 23.223 mil-
lion tonnes. Despite the new Chinese
capacity launches that have been taking
place since mid-2015, the net rise in
capacity from July last year to August
2016 ‘was only 0.9 million tonnes as
the majority of closed capacity is still
frozen and additional restarts might be
limited’, points out Rusal in its recent

market analysis. The Russian company
has raised its 2016 growth forecast for
global aluminium demand from 5.4%
to 5.5%, driven by an anticipated gain
of 7.5% in China to 31.2 million tonnes.

Copper
Although copper has handed back
some of its early-October gains, many
traders expect prices to remain above
US$ 5000 per tonne in the months
ahead – not least because of a scarcity
of supply and expectations of rising
demand. Visible LME stocks have fallen
markedly over the past four weeks from
just under 350 000 tonnes to around
250 000 tonnes.
Scrap values in Europe have followed
the general price rally: in Germany,
for example, bright wire scrap (Kabul)
has been commanding US$ 5195 per
tonne, or around US$ 550 more than
four weeks earlier. Copper granules 1a
(Kasus) has been trading at US$ 5227
per tonne and non-alloyed bright wire
I (Kader) at US$ 5190, which compares
to US$ 4455 in mid-October.
Copper scrap availability is keeping
ahead of demand in the USA, with
some consumers now unlikely to book
significant additional quantities before
the end of the year.
The global refined copper market racked
up a surplus of 298 000 tonnes across
July and August this year on the back
of softer apparent demand in China