Page 62 from: March 2014

62 March 2014

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

Non-Ferrous

Aluminium tipped for healthy
demand growth
The performance of some of the leading non-ferrous
metals exceeded analysts’ expectations in the early weeks
of 2014. However, industry feedback suggests that there
is currently no uniform pattern to the markets. As per
March 3, LME cash prices are at the following per-
tonne levels (the corresponding figures from our
previous non-ferrous metals report of late January are
given in brackets): aluminium US$ 1724 (US$ 1747);
copper US$ 7097.50 (US$ 7327); lead US$ 2115.50
(US$ 2182); zinc US$ 2110 (US$ 2075); and tin
US$ 23 545 (US$ 22 240).

Closed: March 3 2014

Aluminium
Despite market uncertainty and low
light metal prices, ‘we expect demand
for aluminium to slightly exceed pro-
duction this year in the world outside
China,’ Norsk Hydro’s president and
ceo Svein Richard Brandtzæg has
declared. The company is anticipating
aluminium demand growth outside
China of 2-4% in 2014, it confirmed in
its financial results package covering
the fourth quarter of last year.
Russian aluminium major UC Rusal is
forecasting a global light metal con-
sumption increase of 6% this year.
‘China and other Asian economies are
expected to grow strongly and the

developed markets, including the USA
and Europe, should continue to show
a healthy growth,’ it points out. The
Chinese aluminium market ‘will con-
tinue to be balanced’, with a gradual
production capacity increase, while the
deficit in the aluminium market outside
of China will extend from 570 000
tonnes in 2013 to around 1.4 million
tonnes in the current year, it predicts.
Immediately following the Chinese
New Year holidays, aluminium was
priced at Yuan 13 250 per tonne
(US$ 2172) on the Shanghai spot mar-
ket. However, there was a decline to
Yuan 13 000 per tonne (US$ 2132) in
late February owing to a lack of confi-
dence in the market and either shrink-
ing or fluctuating demand from down-
stream industries.
In Germany, aluminium wire scrap
(Achse) has been attracting US$ 1808
per tonne of late and aluminium turn-
ings (Autor) nearer US$ 1388. In the UK
market, meanwhile, prices for commer-
cial pure cuttings have been command-
ing US$ 1445-1527 per tonne, old loose
rolled cuttings US$ 1248-1314 and
commercial turnings US$ 1166-1232.
And in the Netherlands, new pure alu-

minium scrap has been fetching around
US$ 1787 per tonne and first-quality old
rolled aluminium scrap US$ 1581.
In the US secondary aluminium market,
prices have traded recently at either
side of 70 cents per lb for old sheet, just
above 70 cents for siding and upwards
of 75 cents for MLC. And latest Census
Bureau returns reveal that US exports
of aluminium scrap fell 8% last year.

Copper
In Europe, market players had antici-
pated higher LME figures because of
the somewhat invigorated market – but
in Germany, for example, recent weeks
have brought similar prices to those
seen in January. Meanwhile, there have
been persistent reports that major vol-
umes of copper scrap are being stock-
piled, ready for introduction into the
market once prices improve. In Ger-
many, bright wire scrap (Kabul) has
been attracting US$ 7060 per tonne,
copper granules 1a (Kasus) US$ 7101
and non-alloyed bright wire I (Kader)
US$ 6874. In the Netherlands, mean-
while, bright wire scrap has been trad-
ing at around US$ 7355 per tonne and
mixed scrap at US$ 6668.

Earnings at the world’s largest copper
recycler Aurubis were impaired in the
first quarter of its 2013/14 fiscal year
by a ‘weak’ copper scrap market which
translated into a ‘significant’ decline in
processing fees, it has reported. Avail-
ability of complex recycling materials
was ‘good’ while cathode markets
were affected by physical shortages, it
also says.
The outlook for the rest of 2013/14 is
deemed ‘positive’ by the group, with a
‘slight’ improvement anticipated in the
copper scrap markets and with the rela-
tive shortage of cathodes seen as likely
to support red metal prices. ‘Overall, we
expect our earnings level in the current
fiscal year to exceed the previous year,’
concludes the chairman of Aurubis’
executive board Peter Willbrandt.
Following the Chinese New Year celebra-
tions, the Shanghai spot market for cop-
per started out at Yuan 51 000 per tonne
(US$ 8360) but the tone was flat despite
some positive influences from the inter-
national market. Most of China’s smelt-
ers and traders adopted a cautious
approach and prices were dragged down
to Yuan 50 300 per tonne (US$ 8245)
within a matter of days, and subsequent-

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