Page 64 from: September 2014

64 September 2014

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

Non-Ferrous

Copper market difficult to call

In those parts of the world where July and August mean
summer holidays, the markets have been marking time
to a large extent, leading to low demand and generally
static prices.
As at August 27, LME cash prices are at the following
per-tonne levels (the corresponding figures from
our previous non-ferrous metals report of late July
are given in brackets): aluminium US$ 2082
(US$ 1987.50); copper US$ 7096 (US$ 7132);
lead US$ 2257 (US$ 2269); zinc US$ 2359.50
(US$ 2405); and tin US$ 22 090 (US$ 22 550).

Closed: August 27 2014

Aluminium
In Europe, both the aluminium industry
and light metal processors are reporting
quite strong demand and many grades
of scrap are well sought-after. Purchas-
ers are clearly willing to pay the high
premiums evident in the marketplace to
be sure of securing the right material.
The LME reports that speculative hedge
funds are becoming increasingly active
in the aluminium market as a result of
strong demand for primary material.
In Germany, aluminium prices have
been relatively stable. Primary alumin-
ium 99.7 increased slightly to US$ 2374-
2534 per tonne in late August. Con-

versely, aluminium wire scrap (Achse)
fell some US$ 20 per tonne to US$ 2014-
2228 while aluminium turnings (Autor)
have traded recently at US$ 1334-
1494. In the UK, commercial pure cut-
t ings have been commanding
US$ 1676-1750 per tonne and com-
mercial turnings US$ 1200-1266.
Of late, secondary aluminium prices in
the USA have hovered around 75 cents
a lb for old cast while old sheet has
generally attracted 3-4 cents less.
When compared with January-June
2013, US aluminium scrap exports
tumbled approximately 10% in the
opening six months of the current year
to 818 540 tonnes while their associ-
ated value declined by an even more
pronounced 13%, according to latest
feedback from the Census Bureau.
Meanwhile, information collated by the
Aluminum Association suggests the
annual rate of US primary aluminium
production totalled 1.682 million
tonnes during July 2014 for decreases
of 15.6% from the 1.993 million
tonnes of the same month last year and
of 1% from the June 2014 annual rate
of 1.698 million tonnes. The annual
rate of production for the year through
to the end of July was 1.752 million

tonnes for a drop of more than 13%
from the corresponding 2013 rate of
2.016 million tonnes. Actual US pri-
mary aluminium production in July this
year was 142 845 tonnes.
On the Shanghai spot market, the alu-
minium price fluctuated around Yuan
13 910 per tonne (US$ 2265) in the
first half of August but subsequently
declined in response to negative real
estate figures and risk aversion in the
marketplace. However, a strengthening
international market sparked a
rebound to Yuan 14 220 per tonne
(US$ 2315), leading to more energetic
trading activity.
China’s aluminium production
increased again in July as idled capac-
ities were returned to operation.
According to China’s National Bureau
of Statistics, production climbed 7.2%
year on year to 1.98 million tonnes to
yield a cumulative total for the first
seven months of 13.5 million tonnes
– equivalent to an increase of 7.5%
over January-July 2013.
As for latest company feedback, alu-
minium specialist Aleris’ chairman and
ceo Steve Demetriou has stated recent-
ly: ‘Stronger overall volumes are con-
firming our expectation that demand

would strengthen in 2014, particularly
in our automotive business, which has
grown significantly.’ Aleris expects to
see an improved performance in the
second half of this year, not least as a
result of global automotive demand
growth. For the third quarter, Aleris
forecasts that EBITDA will be higher
than in the second quarter of 2014 and
the corresponding three-month period
of 2013, partly as a result of improved
mill grade scrap flow and spreads.
A robust start to the new fiscal year at
aluminium rolling and recycling major
Novelis was driven by ‘excellent plant
productivity, strong winter results in
South America boosted by World Cup
beverage consumption, and good year-
over-year demand trends’, according
to president and ceo Phil Martens. In
its first quarter, the company’s net
income soared to US$ 35 million – an
increase of 150% when compared to
the same period last year – while sales
climbed 12% to US$ 2.7 billion.
‘Demand trends continue to be favour-
able and our investments in rolling,
recycling and automotive sheet finish-
ing lines have positioned the company
well to capture growth in our core can
sheet and specialty markets as well as

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