Page 52 from: June / July 2008

52 June/July 2008

m a r k e t a n a l y s i s

US recession casts long shadow
Following a general decline in prices over the last month, it
would be easy to forget that the majority of non-ferrous
metals are still not far short of their historic peaks. It had
been suggested that the devastating May 12 earthquake in
the Sichuan province of China could boost lead and zinc
prices; in the case of zinc, however, an initial upward
price blip has been followed by cautious buying patterns
among downstream users. On June 12, closing LME cash
prices were as follows (per tonne): aluminium US$ 2882;
copper US$ 7954; lead US$ 1836.50; zinc US$ 1855;
and tin US$ 21 170.

Non-Ferrous
Closed: June 13 2008

was recently trading in Germany at
US$ 3222 per tonne – or some US$ 20
below its level of four weeks earlier.
Aluminium wire scrap (Achse) has
fallen around US$ 50 per tonne to
yield a price of US$ 2796 and alu-
minium turnings (Autor) recently
stood at US$ 1536 – some US$ 100
below its mid-May level.
In the UK, commercial pure cuttings
have been fetching US$ 2057 per
tonne, mixed alloy/old rolled cuttings
US$ 1641-1760, and commercial turn-
ings US$ 1582-1641. A considerable
decline in prices was reported in the
Netherlands, with new pure aluminium

scrap recently at US$ 2337 per tonne
compared to US$ 2707 in May and
first-quality old rolled aluminium scrap
dropping from US$ 1990 to US$ 1870.
As for scrap prices in the USA, the
majority of Midwest smelters have not
been prepared to pay a delivered price
above 85 cents per lb for scrap cast,
some way below the 88 cents report-
ed towards the middle of May. By the
same comparison, the delivered price
of used beverage containers (UBCs)
has held up well at US$ 1.03 per lb.
US aluminium scrap levels are said to
reflect the quiet tone to business at
the present time.
But there was nothing lacklustre
about US aluminium scrap exports in
the first four months of this year, with
overseas shipments soaring 58% to
709 519 tonnes. Despite claiming a
sizeable 316 910 tonnes, China’s
share of these US exports was actually
significantly lower at 44% compared
to 54% for the whole of 2007.
In the first five months of 2008, US
primary aluminium production was
running some 12% higher than in the
corresponding period of 2007. How-
ever, according to feedback from the
Commodity Research Unit, aluminium

consumption in the USA suffered a
decline of approaching 3% in the
January-May period this year owing to
weakness in the residential construc-
tion and transport markets.
As mentioned at the latest BIR Spring
Convention by BIR Non-Ferrous Met-
als Division President Bob Stein,
‘recession’ in the USA has cast a shad-
ow over the entire world. But while
the latest snapshot of the American
economy showed that retail sales
were in line with expectations when
falling 0.2% in April, sales excluding
cars exceeded expectations in rising
0.5% rather than the anticipated
0.2%. At the same time, sales in
March were revised upwards. Indeed,
a number of analysts have remarked
recently on the surprising resilience of
consumer spending in the USA.
Statistics released by the Beijing-
based China Customs Office suggest
the country’s imports of primary alu-
minium sky-rocketed 183% in April
this year to 16 419 tonnes. But when
comparing the first four months of
2008 with the same period last year,
imports were 9% lower at 48 993
tonnes while exports tumbled 70% to
22 080 tonnes. Experts are suggesting

Aluminium
The recent decline in aluminium prices
has been attributed to a clear over-
supply, among other factors. Accord-
ing to the World Bureau of Metal Sta-
tistics, a surplus of 381 000 tonnes
was recorded for the first quarter of
this year compared to an oversupply
of only 116 000 tonnes in 2007. Scrap
supply remains healthy and more than
enough secondary material is avail-
able to the marketplace. Meanwhile,
both primary and secondary smelters
are reporting well-filled order books.
As for price indications in Europe,
high-grade primary aluminium 99.7

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