Prices generally ticked over in the late summer months as markets kept an eye on the tariff diplomacy.
For the metal markets, the trade dispute between China and the US has dimmed, relieving pressure somewhat. A growing understanding between the two parties appears to be at the heart of matters with China looking to buy more agricultural products from the US and the America announcing plans to postpone planned tariffs.
This was ‘a gesture of goodwill’, according to US President Trump on Twitter. Even so, China’s state council had announced on 23 August that it would apply an additional 5% and 10% tariff on US$ 75 billion of US imports, including copper scrap and aluminium scrap. The move came as retaliation to a US announcement 10 days earlier that it would impose additional 10% tariffs on approximately US$ 300 billion of Chinese imports.
Huge alleged fraud
Asia’s largest aluminium extrusion company, China Zhongwang Holdings, and its former president and chairman, have been indicted in the US accused of evading duties said to total US$ 1.8 billion. The ex-boss, Zhongtian Liu, is also accused of inflating the company’s sales and export volumes and money laundering through shell companies.
A federal grand jury found that the accused avoided paying duties by shipping spot-welded aluminium extrusions to make them appear as finished goods. Companies controlled by Liu allegedly imported more than two million pallets between 2011 and 2014. Zhongwang maintained it followed the laws of both China and those of importing countries.
Novelis heads for court
Novelis says it will fight efforts by US regulators to prevent the acquisition of Aleris Corporation. The deal is due to be closed 21 January 2020 but the Department of Justice (DOJ) has issued a lawsuit challenging Novelis, arguing that the only relevant competition among automotive body sheet providers is that among manufacturers such as Novelis and Aleris.
Novelis disputes this, claiming DOJ has not considered competition from manufacturers of steel automotive body sheet, especially as this sheet is currently used for nearly 90% of the market.
Copper, the classic economic indicator, hit the current high for the year on 17 April at US$ 6 533 and has been bouncing off the US$ 6 000 mark ever since. In mid-September, the price was between US$ 5 777 and US$ 5 780. According to analysts, the high inventory levels of the LME and the reductions in production in China are driving the price of the red metal.
Copper stocks in LME’s licensed warehouses stood at 295 800 tonnes in mid-September, a very high level. Blank copper wire scrap cost between US$ 4 509.63 and US$ 5 557.10 and shredded copper wire scrap was worth US$ 5 457.87 to US$ 5 667.36. Heavy copper scrap saw prices between US$ 4 906.57 and US$ 5 127.09 while unalloyed copper wire scrap I traded between US$ 5 314.53 and US$ 5 513.00.
Preliminary data from the International Copper Study Group indicates that world mine production declined by about 1.4% in the first half of 2019. World refined production also declined by about 1% during this period. Primary production fell by 1.5% with secondary production from scrap increasing by 1%.
*The full non-ferrous market analysis will be published in the new issue of Recycling International.
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