Page 105 from: May 2013
105May 2013
Non-Ferrous
aluminium production totalled approx-
imately 1.7 million tonnes in March,
while output across the first quarter
was 5.2 million tonnes – equivalent to
an increase of 9% over the same peri-
od last year.
Copper
LME copper struggled to maintain its
position above US$ 7000 per tonne
throughout most of April, ending the
month just the right side of this thresh-
old amid an atmosphere of caution and
also concern about the robustness of
downstream demand in key parts of
the world.
This was particularly true in China,
where traders and smelters have failed
to inject any significant enthusiasm
into the marketplace. In Shanghai, red
metal prices fluctuated around Yuan
54 400 per tonne (US$ 8634) in early
April but increasing worries about high
stock levels, among other factors, pre-
cipitated a plunge to Yuan 50 450
(US$ 8007) on April 22. The copper
price is expected to remain relatively
flat for the short and medium term
because of slow downstream con-
sumption.
Latest Chinese customs data reveal
that the country’s imports of copper
scrap tumbled more than 19% year on
year in March to 347 598 tonnes. Chi-
nese imports of US copper and copper
alloy scrap fell 7% to just over 140 000
tonnes in the first two months of this
year, according to figures from the Cen-
sus Bureau in the USA.
And statistics from the China Nonfer-
rous Metals Association indicate that
domestic refined copper production
totalled 560 481 tonnes in March
while output across the first three
months of 2013 was around 1.5 mil-
lion tonnes – equivalent to an increase
of 11% over the same period last year.
Also in March, China imported
218 800 tonnes of refined copper,
down 37% from the same month last
year but slightly up on the 214 900
tonnes of February 2013. According to
data from China’s Customs Office, total
imports in the first quarter tumbled
36% year on year to 676 900 tonnes.
Exports, meanwhile, climbed to 60 642
tonnes in March.
Across Europe, the sizeable drop in
LME copper has provoked a large mea-
sure of irritation among market par-
ticipants, with one of the major reasons
for the decline appearing to be the hit
taken recently by the gold market. Cop-
per scrap remains in short supply in
Europe and many traders are complain-
ing that it is proving very difficult to
purchase sufficient volumes. In Ger-
many, bright wire scrap (Kabul) has
slipped below the US$ 7000 mark to
US$ 6941 per tonne while copper
granules 1A (Kasus) have been fetch-
ing US$ 6981 and non-alloyed bright
wire (Kader) nearer US$ 6784.
Meanwhile, German giant Aurubis has
downscaled its copper surplus expecta-
tions for this year to take account of
mine outages and planned mainte-
nance shutdowns. It argues that ‘the
market surplus of refined copper antic-
ipated worldwide in 2013 will be much
lower’ than the widely-estimated
340 000 tonnes-plus.
Lead
The International Lead & Zinc Study
Group (ILZSG) is predicting that global
lead usage will rise 4.8% to 11.09 mil-
lion tonnes this year, buoyed by a
6.7% increase in China ‘driven primar-
ily by a further rise in automotive and
e-bike production as well as the ongo-
ing development of the mobile phone
network’. After declining in both 2011
and 2012, European demand is fore-
cast to rise by 1.9% while further
growth of 1.2% is anticipated for the
USA, alongside gains in Brazil, India,
Indonesia, South Korea, Mexico, Thai-
land and Turkey.
The ILZSG also believes global refined
lead production will climb 4.8% this
year to 11.13 million tonnes, again
influenced primarily by a jump of 6.2%
in China. Overall, therefore, the refined
lead market is thought likely to return
a surplus of 42 000 tonnes in 2013 –
less than that anticipated at the
group’s previous meeting.
Statistics from China’s Customs Office
reveal that refined lead imports were
slashed by 76% to a mere 276 tonnes
in the first quarter of this year. In con-
trast, China’s exports soared 578% to
3342 tonnes when compared to the
same period last year because inter-
national prices have been stronger
than those prevailing in the domestic
market, even though exported com-
modities carry a 10% tax.
The lead price on the Shanghai spot
market climbed from Yuan 14 150 per
tonne (US$ 2246) in early April to
Yuan 14 500 (US$ 2300) towards the
middle of the month. Most traders
were willing to sell at this point but
opportunities proved to be restricted
by slow consumption among the
smelters. Amid generally weak
demand from downstream industry,
lead prices dropped sharply to
Yuan 13 700 per tonne (US$ 2175)
by April 26.
Based on data from the China Nonfer-
rous Metals Industry Association,
domestic refined lead production
climbed around 16% year on year
in the first quarter to more than 1 mil-
lion tonnes.
Against a backdrop of stable demand
at low levels from Europe’s lead pro-
cessors, supply of primary lead is cur-
rently more than sufficient to meet
consumer requirements whereas scrap
availability has suffered a decline. In
Germany, spot prices of new soft lead
stood recently at around US$ 2239 per
tonne while soft lead scrap (Paket) has
been yielding some US$ 1676.
Zinc
In Germany, high-grade zinc prices
have been around US$ 2025 per tonne
of late, while old zinc scrap (Zebra) has
been fetching some US$ 1300. In line
with the other base metals, zinc prices
headed lower during the course of April
although traders in Europe are sug-
gesting the zinc processing industry
has been using this opportunity to
restock against a background of good
demand for the metal. Therefore, trad-
ers are eyeing the coming months with
cautious optimism.
Although zinc stocks in LME ware-
houses remain at a high level of around
1.1 million tonnes, these volumes have
fallen slightly in recent times. In addi-
tion, the zinc market surplus has been
considerably lower in the early months
of 2013 when compared to the same
period last year.
According to the International Lead &
Zinc Study Group (ILZSG), global supply
of refined zinc will exceed demand once
again in 2013 – this time by an esti-
mated 273 000 tonnes. A production
gain of 5.2% to 13.25 million tonnes
will be bolstered by an anticipated
9.7% increase in China. Output is also
expected to be higher in Europe, Aus-
tralia, Brazil, India, Japan, South Korea
and Peru. After falling 3.3% in 2012,
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