Page 40 from: September 2006

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

Non-Ferrous

The upward trend in the European metal markets continued

during August, fuelling a widespread expectation that prices

of raw materials – including metals – will never again return

to the levels of past years. In the USA, the metals sector is

likely to feel the effects of some disappointing economic

indicators: gross domestic product increased at a slower-

than-anticipated seasonally adjusted rate of 2.5% in the sec-

ond quarter; while business spending followed up a first-

quarter surge of 13.7% with an altogether more sobering

increase of 2.7% in the April-June period.

Production issues help to
boost copper

Aluminium

The LME three-month high-grade
aluminium price has remained at a
high level and, in late August, was
being quoted at US$ 2428 per tonne;
meanwhile, aluminium alloys were
around the US$ 2195 per tonne
mark.

The aluminium industry was
largely surprised to learn from
Russian magazine ‘Kommersant’
that the country’s RusAl and SUAL
mills had signed a merger agree-
ment. If the deal is confirmed, the
new entity would be the world’s
largest aluminium producer and

would completely control the Russ-
ian market.

In late August, German primary
aluminium 99.7 prices were stand-
ing at US$ 2689 per tonne – close to
their level of a month earlier. Both
aluminium wire scrap (Achse) and
aluminium turnings (Autor) fell
slightly to, respectively, US$ 2453
and US$ 1752 per tonne.

In the UK, commercial pure cut-
tings climbed from US$ 1860-1933
to US$ 1944-2020 per tonne, while
mixed alloy/old rolled cuttings were
trading recently at US$ 1468-1506
per tonne – some US$ 40 above their
level of four weeks earlier. Mean-
while, commercial turnings jumped
from US$ 1277-1386 to US$ 1334-
1448 per tonne.

Prices in The Netherlands have
also been firm, with new pure alu-
minium scrap recently yielding
US$ 2442 per tonne, while first
quality old rolled aluminium scrap
closed the month of August at
US$ 1478.

According to market experts, sup-
ply of aluminium is currently suffi-
cient but is veering once again to-
wards shortage. In the autumn,
traders are expecting scrap to be-
come scarce once more.

Copper

The red metal is regarded as the
locomotive which has been pulling
along all the other base metals over
recent months. Prices have re-
mained volatile in recent weeks: the
LME three-month price stood at
around US$ 7481 per tonne in late
August after having broken through
the US$ 8000 barrier at various
points during the month.

According to Europe’s largest cop-
per smelter Norddeutschen Affinerie
(NA), the red metal will continue to
attract high price levels in the short
term as a result of globally strong
demand. In Germany, small and
medium-size copper processors are
finding difficulty in coming to terms
with the market’s volatility since
they are being forced to maintain
large cash flows. According to NA,
fluctuating copper prices will per-
suade customers to keep their inven-
tories low for the short term. How-
ever, the company adds, high copper
prices have led to substitution by
other materials only in the case of
low-quality products.

Supply of copper scrap remains
adequate and the anticipated drain-
ing of material into the Asian mar-
ket has yet to materialise. Neverthe-

Recycling International • September 2006 40

Closed: September 1 2006

Europe

Russian merger plan

RI_022 MA non-ferrous 04-09-2006 17:09 Pagina 40