Page 54 from: September 2015
54 September 2015
M A R K E T A N A L Y S I S
Non-Ferrous
China’s ever-higher-profile economic slowdown has
impacted the global metal markets. The government’s
latest rate cut boosted base metal prices in the
short term but did not lead to a sustained upturn.
As of August 28, LME cash prices are at the
following per-tonne levels (the corresponding
figures from our non-ferrous metals report
of late July are given in brackets): aluminium
US$ 1528 (US$ 1609); copper US$ 5029 (US$
5239.50); lead US$ 1652.50 (US$ 1703.50);
zinc US$ 1726 (US$ 1957); and tin US$ 13
895 (US$ 16 275).
Copper price slump
‘exaggerated’, say analysts
Closed: August 28 2015
Aluminium
In Europe, there is weakness in both
supply and demand within the alu-
minium scrap market. Of late in Ger-
many, aluminium wire scrap (Achse)
has been attracting US$ 1628 per
tonne and aluminium turnings (Autor)
US$ 1153. In the UK, commercial pure
cuttings have been traded at
US$ 1344-1375 per tonne, loose old
rolled cuttings at US$ 1093-1156 and
commercial turnings at US$ 937-1000,
while the Dutch market has seen prices
of US$ 1726 for new pure aluminium
scrap and US$ 1496 for first-quality old
rolled aluminium scrap. Although some
analysts believe half of the world’s
aluminium producers can no longer
operate economically, German enter-
prises may offer an exception in that
they are anticipating steady growth in
order volumes over the coming months.
However, other EU states are consider-
ably more cautious.
Amid weak demand, latest aluminium
scrap price indications in the USA are
showing declines – including to below
55 cents per lb for both old cast and
painted siding. Largely because of a
sharp reduction in orders from China,
figures suggest US aluminium scrap
exports are running some 8% lower
this year in volume terms. Shipments
from the USA to China slid more than
100 000 tons – or almost 19% – from
567 098 tons in the first half of 2014
to 461 752 tons. According to Com-
merce Department data, US shipments
to all destinations were around 11%
lower in this year’s January-June period
at 764 784 tons.
On ‘flat’ shipments, aluminium rolling
and recycling specialist Novelis wit-
nessed a 2% drop in its revenues dur-
ing the first quarter of fiscal 2016 to
around US$ 2.6 billion – ‘primarily
driven by lower average metal prices
and local market premiums’. Such pre-
miums ‘have declined sharply over the
past several months toward historical
norms’, causing ‘a negative metal price
lag effect’ on the company’s results.
According to Rusal of Russia, global
aluminium consumption grew 6.3%
year on year in the first half of 2015
owing to strong demand in North
America and India. But over the same
period, the all-in aluminium price
declined 22% when compared to last
year’s fourth quarter, thus raising the
possibility of ‘additional supply cuts
outside of China’. For 2015 as a whole,
the company has reduced its overall
aluminium consumption growth fore-
cast from 6.5% to 6% as a reflection
of ‘weaker-than-expected demand in
Russia, Brazil and Asia’.
Goldman Sachs, meanwhile, believes
aluminium prices will need to lose
more ground if wider-scale production
cuts are to take place in China. The
bank has duly trimmed its forecasts,
believing the light metal will average
US$ 1525 per tonne next year,
US$ 1625 in 2017 and US$ 1700 in
2018.
Copper
Analysts at Germany’s Commerzbank
believe the slump in copper prices is
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