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Chinese aluminium prices shoot up
Feature article
Chinese aluminium prices have drawn a lot of attention this week following a
near 5% surge over the last four days. Here we review some of the factors
behind the push in prices.
Latest news
Copper rose 0.4% on the day, supported by the force majeure declaration at
Escondida, the world’s largest mine. With the strike at Escondida now pushing
toward a week’s duration, the declaration is not hugely surprising; however, it
does suggest an expectation that no immediate solution is in sight. We would
reiterate that marginal Chinese buyers still are not interested at current price
levels; however, the current disruption just adds to the ongoing
underperformance of copper mine supply, with more than 75% of our 2011
disruption allowance already used up.
Chinese steel production remained robust over mid-July at 712mtpa,
according to the latest data from the China Iron and Steel Association.
Although production in July is down around 2.3% from the June average,
volumes remain above our expectations. With inventory still falling and prices
holding up, demand so far appears to be bucking the trend of a softer patch
over the summer months.
Chilean copper production fell close to 9% YoY in June to 426.5kt, bringing
first-half output to 2.57mt, down 2.2% YoY. Meanwhile Peruvian output was
500kt in 1H11, down 2.4% YoY.
Norilsk reported a sharp fall in second-quarter nickel production to 64.7kt,
down. Production in Russia fell just over 3kt QoQ due to the spring floods at
Norilsk. Production at the Harjavalta nickel refinery in Finland was only 8,551t,
down from 11,727t in 1Q, with Norilsk asserting 1H production of 20,278t
above the “approved plan.” The lower number suggests that nickel feed form
Talvivaara in Finland is not flowing as smoothly as some had hoped. Platinum
and palladium production from Norilsk's Russian operations was also weaker
over 2Q, falling 1.6% YoY and 5.3% YoY, respectively.
South African gold miners have joined the coal miners in industrial action, with
previously announced strikes beginning today. There has been no word from
the platinum producers, with the Nation Union of Mineworkers reducing its
proposed wage gain from 20% YoY to 15% YoY. Zimplats also reported
production results with PGM ounces rising to 103koz in the quarter, with
production in 1H11 2.5%YoY. So far all operations in Zimbabwe have
reported solid operational results, despite the uncertainty surrounding
nationalisation.
Chinese official (CSSC) stainless steel production hit an all-time high of 3.13kt
in 2Q11, up 9% YoY. Total first-half output was 6.2mt, up 13.5% YoY.
Meanwhile, US stainless steel fell 25% QoQ in April–June, with first-half
output falling 1.8% YoY to 1.17mt.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Chinese aluminium prices shoot up
Feature article
Chinese aluminium prices have drawn a lot of attention this week following a
near 5% surge over the last four days. Here we review some of the factors
behind the push in prices.
Latest news
Copper rose 0.4% on the day, supported by the force majeure declaration at
Escondida, the world’s largest mine. With the strike at Escondida now pushing
toward a week’s duration, the declaration is not hugely surprising; however, it
does suggest an expectation that no immediate solution is in sight. We would
reiterate that marginal Chinese buyers still are not interested at current price
levels; however, the current disruption just adds to the ongoing
underperformance of copper mine supply, with more than 75% of our 2011
disruption allowance already used up.
Chinese steel production remained robust over mid-July at 712mtpa,
according to the latest data from the China Iron and Steel Association.
Although production in July is down around 2.3% from the June average,
volumes remain above our expectations. With inventory still falling and prices
holding up, demand so far appears to be bucking the trend of a softer patch
over the summer months.
Chilean copper production fell close to 9% YoY in June to 426.5kt, bringing
first-half output to 2.57mt, down 2.2% YoY. Meanwhile Peruvian output was
500kt in 1H11, down 2.4% YoY.
Norilsk reported a sharp fall in second-quarter nickel production to 64.7kt,
down. Production in Russia fell just over 3kt QoQ due to the spring floods at
Norilsk. Production at the Harjavalta nickel refinery in Finland was only 8,551t,
down from 11,727t in 1Q, with Norilsk asserting 1H production of 20,278t
above the “approved plan.” The lower number suggests that nickel feed form
Talvivaara in Finland is not flowing as smoothly as some had hoped. Platinum
and palladium production from Norilsk's Russian operations was also weaker
over 2Q, falling 1.6% YoY and 5.3% YoY, respectively.
South African gold miners have joined the coal miners in industrial action, with
previously announced strikes beginning today. There has been no word from
the platinum producers, with the Nation Union of Mineworkers reducing its
proposed wage gain from 20% YoY to 15% YoY. Zimplats also reported
production results with PGM ounces rising to 103koz in the quarter, with
production in 1H11 2.5%YoY. So far all operations in Zimbabwe have
reported solid operational results, despite the uncertainty surrounding
nationalisation.
Chinese official (CSSC) stainless steel production hit an all-time high of 3.13kt
in 2Q11, up 9% YoY. Total first-half output was 6.2mt, up 13.5% YoY.
Meanwhile, US stainless steel fell 25% QoQ in April–June, with first-half
output falling 1.8% YoY to 1.17mt.
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