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US aluminium orders surge in January
Feature article
The latest North America aluminium orders data point to a surge in orders in
January. European orders are also reported to be solid, and physical premia
for aluminium remain very high in all developed regions. Overall the current
global aluminium market is in balance to small deficit, with China in significant
deficit at present, and as a result of the latter we retain our short term bullish
view on aluminium and alumina pricing.
Latest news
Base metals were under pressure this week with copper (-0.9%WoW) and
aluminium (-2.0%WoW) pulling back somewhat as aluminium stocks rose
1.5% on the LME and copper stocks on the SHFE rose 9.899kt.
Chinese domestic steel prices have continued to push up after Chinese New
Year, with all indications suggesting that trader stock building is driving the
increases. The commodity steel products (that are stockpiled in the greatest
volume by traders) were the strongest performers with HRC rising 1.0% since
the holiday to RMB4,930/t ($641/t ex VAT) and rebar up 2.2% to RMB4,835/t
($629/t). Reports of end user transactions have been scarce this week and
Mysteel data on inventory at traders showed a strong rise in rebar stocks,
bringing absolute levels of inventory back to April 2010 levels. With end user
demand, particularly from construction, at its lowest over the New Year
period, traders typically take the opportunity to build inventory at this time of
year. As such, we do believe that steel prices can continue to move up in the
near term, but a strong return of end user participation will be required to
ensure the next leg of price rises.
The NDRC has announced the coal stockpiles at China’s key power plants
were 55.9mt as of Feb 8, or enough for 16 days of use. Coal stocks at IPPs
in the Southern provinces currently stand at 15.05mt or 19.2mt. Domestic
coal supply has been solid since the start of this year, with power stations
holding comfortable levels of stocks. Anecdotally, Chinese buyers are still
conspicuously absent from the seaborne market, with prices at QHD up a little
at RMB780/t. Nonetheless, coal prices were stronger by the end of the week,
with Newcastle for delivery in March trading at $128/t.
Steel scrap has been the big loser this week, with The Steel Index Turkish
import assessment plunging 9.4% to $444/t amid worries over the Middle East
political situation. This has also had an effect on Mediterranean rebar prices,
which fell $30/t. With hot rolled coil prices in the region continuing to rise, the
flat production premium over long products is now in excess of $100/t.
German engineering federation VDMA expects the country's mechanical
engineering sector to expand by 10% in 2011, driven by further machinery
sales to China after 2010's 30% rise in this area. New orders in the sector
were up 44% YoY in December, taking the Q4 average to 40% YoY growth.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
US aluminium orders surge in January
Feature article
The latest North America aluminium orders data point to a surge in orders in
January. European orders are also reported to be solid, and physical premia
for aluminium remain very high in all developed regions. Overall the current
global aluminium market is in balance to small deficit, with China in significant
deficit at present, and as a result of the latter we retain our short term bullish
view on aluminium and alumina pricing.
Latest news
Base metals were under pressure this week with copper (-0.9%WoW) and
aluminium (-2.0%WoW) pulling back somewhat as aluminium stocks rose
1.5% on the LME and copper stocks on the SHFE rose 9.899kt.
Chinese domestic steel prices have continued to push up after Chinese New
Year, with all indications suggesting that trader stock building is driving the
increases. The commodity steel products (that are stockpiled in the greatest
volume by traders) were the strongest performers with HRC rising 1.0% since
the holiday to RMB4,930/t ($641/t ex VAT) and rebar up 2.2% to RMB4,835/t
($629/t). Reports of end user transactions have been scarce this week and
Mysteel data on inventory at traders showed a strong rise in rebar stocks,
bringing absolute levels of inventory back to April 2010 levels. With end user
demand, particularly from construction, at its lowest over the New Year
period, traders typically take the opportunity to build inventory at this time of
year. As such, we do believe that steel prices can continue to move up in the
near term, but a strong return of end user participation will be required to
ensure the next leg of price rises.
The NDRC has announced the coal stockpiles at China’s key power plants
were 55.9mt as of Feb 8, or enough for 16 days of use. Coal stocks at IPPs
in the Southern provinces currently stand at 15.05mt or 19.2mt. Domestic
coal supply has been solid since the start of this year, with power stations
holding comfortable levels of stocks. Anecdotally, Chinese buyers are still
conspicuously absent from the seaborne market, with prices at QHD up a little
at RMB780/t. Nonetheless, coal prices were stronger by the end of the week,
with Newcastle for delivery in March trading at $128/t.
Steel scrap has been the big loser this week, with The Steel Index Turkish
import assessment plunging 9.4% to $444/t amid worries over the Middle East
political situation. This has also had an effect on Mediterranean rebar prices,
which fell $30/t. With hot rolled coil prices in the region continuing to rise, the
flat production premium over long products is now in excess of $100/t.
German engineering federation VDMA expects the country's mechanical
engineering sector to expand by 10% in 2011, driven by further machinery
sales to China after 2010's 30% rise in this area. New orders in the sector
were up 44% YoY in December, taking the Q4 average to 40% YoY growth.
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