NONFERROUS METALS
NONFERROUS METALS
GLOBAL MARKET
ALUMINUM
In the end of 1999, the market for aluminum saw an upswing
in its development. In December 1999, the average monthly price for aluminum hit a record
high for the last two years and settled at USD/MT 1,554.8.
Recovery in the S.E.Asia, favorable economic standing of
the European countries and USA did contribute to the strengthening of prices for aluminum
and aluminum alloys.
The increase in price for aluminum was expected well
before. Rise in prices for alumina became a stimulus, as a factor closely related to
instability in prices for aluminum. Alumina price growth was caused by the strike of
railway staff in the eastern region of Australia. That is why shipments of alumina to
ports of one of the world biggest suppliers of this commodity was virtually paralyzed. It
was also caused by shutting of powerful industrial complex in Gramercy, as well as by
narrowed aluminum shipments from Russia (CIS member-countries). The S.E.Asia remained the
most “popular” destination for the Russian export in December 1999.
As a result, beginning of 2000 was accompanied with further
rise in prices for aluminum. New record was registered on January 26, when price for this
commodity ran up to USD/MT 1,745. In January 2000, average monthly price exceeded
corresponding figure of December 1999 almost by USD/MT 130 and settled at USD/MT 1,680.7.
In January, aluminum prices fluctuated within the range of USD/MT 1,608-1,745.
In January, average monthly price for aluminum alloy was at
USD/MT 1,389.13, that was a new record high, like in case with aluminum. The highest mark
was registered January 20 – USD/MT 1,438.
The main factors still contributing to the increase in
price for aluminum were as follows:
- Decreased aluminum stock at the LME warehouses as a
result of intensive purchases of the metal on the eve of 2000, which arose from the
improvement of the economic situation, as well as from fairs concerned with “the Problem
2000”;
- Reduced production at Chinese works, as a result of
rise in prices for alumina (raw material for aluminum manufacturing) up to USD/MT 400
(this makes aluminum manufacturing at competitive prices impossible).
In the end of the month, the statement of Alcoa
representatives caused some anxiety: the management of the company intended to restore
idle capacities, thus increasing total annual productive capacity by 209 ths. However,
respond to this statement was evened by the information on possible production decrease in
China.
To regret of many aluminum market operators, aluminum
rise-in-prices period was over in February 2000, when the average level of LME prices
lowered by USD/MT 10 as compared to the previous month and settled at USD/MT 1,670.67.
It is worth mentioning that in February “alumina
factor” had a great effect on the situation in the aluminum market. Difficulties in
supplies of this raw material to the market resulted in rise of prices for alumina up to
USD/MT 450 that restrained, in its turn, further aluminum manufacturing, especially in
China. According to the data with the International Institute of Primary Aluminum,
aluminum production rises year-on-year and month-on-month. Recovery of the world economy,
especially in the S.E.Asia, after the crisis of 1997-1998 gave an additional impulse to
restoration of idle aluminum production capacities and commissioning of new capacities.
Expansion of the world productive capacities is one of the basic factors having effect on
the aluminum market prices. So far, the level of aluminum production was well balanced
with the level of consumption, which remained rather high.
In March 2000, the situation on the aluminum market was
relatively stable. Nevertheless, the balance was violated by certain events, which will be
highlighted below.
Compared to the last month, average LME prices dropped
almost by USD/MT 100 to USD/MT 1,577.41.
Aluminum market was under effect of technical factors that
had impact on almost all the non-ferrous metal markets. Lack of buyer’s interest, along
with no large purchases of the metal by investment funds, resulted in upward trend for
aluminum prices. Moreover, taking into account the fact that aluminum market depends on
investment funds more than any other non-ferrous metal market, news about the crises in
activity of Tiger Management Fund investment fund was a key factor among the other
technical factors having effect on it in March 2000.
The statement about the fact that regulative bodies blocked
amalgamation of Alcan-Alcoa-Pechiney giants was the next occurrence having negative impact
on the development of aluminum market. Previously, it was supposed that successful
amalgamation of the aforementioned companies would result in narrowing of productive
capacities. However, the amalgamation did not take place.
Decline in economic activity on Japanese market turned up
to be another factor of influence for rise in prices on the aluminum market. Japanese
metallurgical industry came to the new period of recession. While earlier ever-growing
demand for aluminum semis was observed, which successively determined intensive demand for
basic metals, in the end of March, demand for basic metals slightly lowered.
Growth of aluminum production at Chinese and Russian works
had a negative effect on the situation. In the first quarter of 2000, key Chinese aluminum
producers expanded their production by 14-22% as against the corresponding period of 1999.
Figures conveyed the global growth of aluminum production.
In addition to the fact that in 1999 there was a 283,000-MT surplus of manufactured metal,
more and more aluminum production capacities were commissioned worldwide, as well as old
frozen works were restored to life. All that added fuel to the fire (commissioning of new
capacities at New Madrid Works and at the melting works of Hawesville in the United
States). It was presumed that Mozal and Alscon melting works in Africa would restore their
production (previously frozen capacities of Alscon). Besides, the similar scenario was
anticipated in India and Indonesia.
Summer-season factor failed to hold the prices for
aluminum. After decrease in April 2000, aluminum prices started increasing again, which
derived from further enhanced global conjuncture.
Compared to April, average LME prices increased in May by
USD/MT 10 to USD/MT 1,467.19. In previous month, this figure was at USD/MT 1,457.61. In
May, aluminum quotations fluctuated within the range of USD/MT 1,430.5-1,514.5.
Rise in prices for aluminum in June was more noticeable.
Compared to May, June average prices for aluminum added almost USD/MT 40 and reached
USD/MT 1,506.73. June spread in prices for aluminum indicated USD/MT 1,419.5-1,579.5.
In July, as a result of market recovery, average prices for
aluminum advanced by USD/MT 57 to USD/MT 1,563.88. July spread in aluminum prices amounted
to USD/MT 1,541-1,599, with the upper limit of this interval at a record high for the last
four months.
As regards general evaluation of the situation on the
aluminum market in May-July, on completion of the second quarter, preliminary results
showed average LME price for aluminum at USD/MT 1,462. It was almost USD/MT 180 less than
the similar figure of the first quarter (USD/MT 1,640). Foremost, the drop in prices in
the second quarter can be explained by lowered interest of investment funds, expanded
aluminum production worldwide, indifferent attitude of traders and speculators in regard
to narrowing of metal stock at LME warehouses, and by relative balance on the market.
In addition, alumina price, that was at the peak in
March-April (USD/MT 420-440), also decreased, against the background of extended alumina
production, and reached USD/MT 280-300 as of the end of July.
Decrease in LME aluminum stock was explained by the delays
in aluminum supplies from the Russian Federation that, in its turn, was caused by
restructuring of aluminum industry in Russia. This event was most noticeable for Japan,
because it was the main importer of Russian aluminum. May-June premiums for Russian
aluminum on the Japanese market kept high at USD/MT 55-60 CIF, Japanese ports.
In the US market, the fact of temporary absence of Russian
aluminum urged forward both demand for aluminum and scale of relevant premiums.
In August, as was anticipated, the prices for alumina fell
down due to decline in business activity in comparison with average level of July prices
and settled at USD/MT 1528. Spread in aluminum prices in this month amounted to USD/MT
1,506-1,578. Lowest quotations for this commodity were reported during the second and at
the beginning of the third decades of the month. The high in quotations (USD/MT 1,578) was
registered in the end of August, exactly on the 31st day, when the level of business
activity started increasing again after the season of summer vacations.
In spite of the fact of temporary drop in prices for
aluminum in August, demand for this metal remained stable enough.
In September, along with the recovery of business activity
and improvement of the situation in primary regions consuming this metal, the average
level of LME quotations for aluminum added over USD/MT 70 amounting to USD/MT 1,601.6. The
lowest level of September quotations was at USD/MT 1,563, while the high in quotations in
that month indicated USD/MT 1,644.
General situation on the aluminum market in the end of
August and early September featured drastic reduction in LME metal stock and in business
activity of funds. Consequently, aluminum price reached its high. Large volume of hidden
metal inventories, having been accumulated, prevented further price increase.
As regards common moods prevailing in basic world markets:
if US producers of semis worried by reducing portfolios of orders and by increasing
aluminum inventories, European producers were quite satisfied with the level of
consumption and with forecasts for the present year. Those moods were supported by the
fact that in accordance with the data of the International Institute of Primary Aluminum,
the global tendency for decrease in aluminum production kept on, especially at the US
melting works.
October was marked with the drop in LME prices for
aluminum. Average prices for this metal decreased in comparison with previous month by
over USD/MT 100, amounting to USD/MT 1,500.66 in October, while the corresponding figure
of September was at USD/MT 1,601.6. September spread in aluminum prices indicated USD/MT
1,446-1,574.
In October, unfavorable situation in non-ferrous metal
market had to be reflected in aluminum market. Even proceeding production decline in the
United States was not able to maintain prices for aluminum. Golden Northwest Aluminum,
having been the largest producer, announced of narrowing primary aluminum production
approximately by 100 ths. tpy.
The situation on the US market was one of the main
indicators for aluminum market. After the enduring increase in the end of 1999 and early
2000 in the United States, demand for aluminum began to decline by the latter half of
2000. During the period of weighty increase in the US aluminum consumption in the first
half of 2000, supplies of aluminum products to this country was abruptly enlarged
resulting in over-saturation of the aluminum market. In accordance with the data of
Aluminum Association, the number of orders for rolled aluminum (in particular, for sheets
and slabs) decreased in July 2000 by 7.8% in comparison with the corresponding period of
1999 and by 12.7% in comparison with June 2000.
In its turn, demand for aluminum in Europe remained quite
stable. After the summer season, main consumers of this metal started returning to the
market.
In November, LME prices for aluminum kept on lowering,
though with not that big paces. Average level of LME quotations for aluminum amounted to
USD/MT 1,474 this month and USD/MT 1,501 in October. LME quotations for aluminum
fluctuated within USD/MT 1,443-1,514.
Forecasts of economic recession in the United States played
a vital part in drop of prices for aluminum. As a result of active sale of investment
funds during the two last autumn months, prices for aluminum continued decreasing. Along
with the prices for metal, premiums for this good decreased as well. For example, in
October such a decline made USD/Pound 0.04 in the United States and USD/MT 15-25 in Europe
(to USD/MT 140-150 (spot contract with paid duty)).
Signs of weakened demand for aluminum in the United States
were confirmed by the data of Aluminum Association testifying that supplying of rolled
aluminum to this country in August 2000 reduced by 5.6% in comparison with the
corresponding period of 1999, due to unsold stock of rolled aluminum at the warehouses of
distributors. As result, portfolios of orders for this product for the fourth quarter
significantly narrowed, which made its impact on the market.
The world was worried with the fact that economic situation
on the American market became worth and it could have a negative effect on the European
market. As result of weakening demand for aluminum in the United States, European demand
could also weaken, taking into account problems Euro exchange rate. In the light of those
events, consumers did not hurry to place orders although it was supposed that not that
high LME quotations were observed at that moment could encourage consumers to sign
contracts at those prices.
Despite the situation, demand in Europe remained quite
stable, although some signs of reducing consumption were registered in selected
industries, consuming aluminum.
As regards global production, in accordance with the data
of the International Institute of Primary Aluminum, in the nine months of 2000, production
increased by 3.05% as against the respective period of 1999 and settled at 15.83 mln.
tons.
Russia made an important contribution to increase primary
aluminum manufacturing. In the nine months of 2000, RF produced 2.4% more aluminum than in
the respective period of 1999 (1.6 mln. tons), while in January-August, export of this
metal from Russia increased by 5.6% in comparison with the similar period of 1999,
amounting to 2.16 mln. tons.
In the end of the year, an upward price tendency was traced
. In December 2000, the level of prices for aluminum exceeded the respective figure of
November almost by USD/MT 100, amounting to USD/MT 1,566, while in November this figure
amounted to USD/MT 1,474. Fluctuation corridor for aluminum quotations was USD/MT
1,494.0-1,620.5.
COPPER
At the end of 1999, the situation on the copper market
looked like the situation on the aluminum market. Copper finally was able to break a
record for the last two years in December. USD/MT 1,846 – this price was registered last
day of auction on the LME, on December 30. Average monthly price for this metal in
December amounted to USD/MT 1764.75, that exceeded figure of previous month almost by
USD/MT 40.
During the period of abrupt rise in prices, the structure
of copper market irrevocable changed. This resulted in decreasing of the general number of
market gamblers, but the number of big gamblers increased.
Copper enjoyed strong demand. Like aluminum, it was caused
by favorable economic situation in Western European and North American countries and by
recovery of S.A. region after the crisis. Decrease of global productive capacity that had
place at the beginning and in the middle of 1999 also played a vital role. As result,
shortage of copper was registered in the market. However, presently, during the period of
violent rise in prices, restoring of production at idle frozen capacities is anticipated.
In its turn, this again can result in surplus of copper in the market, having negative
effect on prices.
However, at the end of 1999, demand for copper still
increased and the market started attracting speculative funds. It was one more factor
having influence on the rise of prices for copper in 2000.
In January, prices for copper reached not only a record
high for recent years but also made a record high in growth rates. While in December
average price for copper was at only USD/MT 1,473.55, corresponding figure of January made
spurt almost by USD/MT 400 to USD/MT 1,843.98. Minimum and maximum prices for copper in
January were at USD/MT 1,812 and USD/MT 1,898 correspondingly.
In January, copper prices still increased simultaneously
with aluminum prices. First of all, this originated from high activity of buyers in the
copper market in December, which resulted in decreased stock at LME warehouses. This, in
its turn, can be explained by improvement of the economic situation (in S.E. Asian
countries and in the United States), as well as by the anxiety on the “Problem of
2000”. That is why many consumers tried to buy materials in advance to prevent stoppage
in manufacturing process. The highest activity on the copper market was demonstrated by
investment funds, that pressed towards buying certain volume of material to receive
dividends from resale in future.
However, in the end of January, prices for copper slightly
dropped, which can be explained by the increase in copper stock at the warehouses of LME,
along with coming consignments of the product from Chile and forthcoming sales of copper
by investment funds. Another factor having effect on rise in prices was the fact that many
consumers made inventories in the end of 1999.
Like on the aluminum market, prices for copper dropped in
February in comparison with January. In February, average monthly price for copper was at
USD/MT 1,800.83, which is USD/MT 45 less than in previous month. In February, LME
quotations for copper fluctuated within USD/MT 1,726-1,840.5.
The situation on the copper market bore a resemblance to
the situation on the aluminum market. Demand for copper remained quite strong, especially
in countries of Asia. However, production of metal, having increased after improvement of
global economic situation, created a surplus in the market. There was a consoling fact,
that not so many companies, regardless anticipations, intended to follow an example of Rio
Tinto company, which restored production at Cerro Colorado copper mine.
Rise of global copper production was compensated by stable
demand for this metal. The most important contribution to demand intensification was made
by such industries as building, manufacturing of air-conditioners, and motor-car industry.
It is worth mentioning that strengthened interest in the Internet resulted in development
of multi-channel telephone networks for using network services at home. It also
contributed to strengthening of demand for copper wires.
In March, prices for copper kept on lowering. Average
monthly price for copper settled at USD/MT 1,739.39, that is almost 61.5 less than figure
of the previous month. LME quotations for copper ranged within USD/MT 1,703-1,779.
Global price downward tendency was also explained by
business decline in Japan, as well as by the increase in copper production in Kazakhstan
and China (-19.4-19.6% in March).
One more important factor was the information that “Ok
Tedi” mill in Papua New Guinea, manufacturing copper concentrate, would continue
operating in the nearest future. World Bank recommended to shut this for the reason of
ecological problems, but taking into account the fact that the mill was very important for
the country and BHP company, its main owner, the mill would keep on functioning.
The other factors of influence on drop in prices for copper
include 1.1%-increased production by Escondida company, as well as forecasts on increase
in production by Los Pelambers Works from 246 tpy to 275 tpy.
In early 2000, supplies of copper and copper alloys to the
US market increased by 16-19% as against early 1999, that means continuation of favorable
development of economic situation in the US market.
The level of copper and copper alloy consumption increased
in Germany during the last few months.
In May 2000, prices for copper soared in comparison with
the previous month. After drop in prices for this metal in April by more than USD/MT 60,
in May, a new splash of market activity was observed, which supported rise in prices by
USD/MT 107. Thus, average level of prices in May reached the figure of USD/MT 1,785.62. To
compare, corresponding April figure was at USD/MT 1,678.75. During the month, copper
prices fluctuated within USD/MT 1,719-1,829.
In June, LME prices for copper decreased a little bit, and
average price also decreased to USD/MT 1,753.18. In June, prices for this metal ranged
within USD/MT 1,707-1,794.5.
Like on the aluminum market, in July, copper market gained
more recovery, which was reflected in prices. Average prices for copper in this month
settled at USD/MT 1,799.36. Quotations for this metal ranged within USD/MT 1,741-1,863.
The end of spring and the beginning of summer were very
favorable for the copper market. Copper inventories at LME warehouses continued narrowing.
Actions of Indonesian government were the main courses of that. Those actions were aimed
at reducing manufacturing in “Grasberg”, the world second largest copper-mill, as well
as decreasing production at “Freeport”, another copper-mill.
However, Chile, one of the main manufacturers of copper and
copper raw materials, increased production of manufactured copper concentrate. Rise in
production of these products during the first four months of 2000 amounted to 6.2% in
comparison with the same period of 1999.
Effect of this factor on the market was alleviated by the
strike of workers at “Quebrada Blanca” mill, manufacturing 75 tpy of copper
concentrate.
At that moment, the main attention was concentrated at
China, one of the main copper importer. In accordance with the data of China Metals,
Chinese state company, import of copper raw materials by China essentially increased,
along with strengthening interior demand for this metal.
Chinese import of refined copper amounted to 274.2 ths. mt
in the first half of 2000, which is 45.2% up from the corresponding period of 1999. In
accordance with the forecasts of Macquarie company, copper import in the second half of
2000 would amount 175 ths. tons.
In August 2000, copper prices increased by over USD/MT 56
in comparison with July and reached USD/MT 1,855.86. In September, this upward tendency
proceeded. Copper quotations increased up to USD/MT 1,960.4, thus, exceeding corresponding
August figure by USD/MT 105.
In August, copper quotations ranged within USD/MT
1834-1900, while September range was USD/MT 1,894-2,009.
Rise in prices for copper was caused by the essential
increase of global consumption, especially in Japan, and by stable demand for this metal
in the United States. Experts forecasted further increase in copper consumption in Japan,
due to high demand for networking equipment and hi-tech products.
In October 2000, there was a decrease in prices for copper
by over USD/MT 60 to USD/MT 1,898.59. In October, copper quotations ranged within USD/MT
1,810-1,966.5, while September range was at USD/MT 1894-2009.
Despite the drop in prices in October, the situation on the
copper market was evaluated by leading world experts and analysts as a favorable one. This
can be proved by the fact that in the first half of 2000, the level of copper consumtion
in the western countries exceeded respective figure of the first half of 1999
approximately by 6.2%.
As regards key copper consuming regions, during the first
seven months of 2000, copper import to the United States increased by 31% or 163 ths. tons
against the respective period of 1999 (in accordance with the data of the US Association
of Copper and Brass Manufacturers).
In the first seven months of 2000, the violent rise of
copper semis production (by 20.2% to 1.14 mln. tons) was observed in Germany, which is one
of the main manufacturers of copper and copper semis in Europe. Such an increase was not
caused not only by high level of interior copper consumptioning only but also by wide
export supplies.
During the first half of 2000, the rise of copper semis
production (up to the level of 717 ths. tons) was observed in Italy, taking the second
place in the list of main copper consumers.
Practically in all the main countries of the S.E.Asia,
excluding Japan only, the level of copper consumption exceeded figures before the crisis.
During 2000, copper supplies to Chinese market increased
quite notably. In the first eight months of 2000, import of refined copper increased by
57.6% to 460.81 ths. tons, while export of this metal amounted to 77 ths. tons only.
Figures of copper manufacturing inside the country were not backward too. During this
period, they increased by against respective period of 1999, amounting to 816.5 ths. tons
that gave the possibility to increase import of copper concentrate to the country by 40%
(up to 1.07 mln. tons).
In November, there was a drop in average prices for copper
by over USD/MT 100 in comparison with October figures. This figure amounted to USD/MT
1,795, while in October it was at USD/MT 1,899. In November, copper quotations ranged
within USD/MT 1,762-1,828.5, October range was within USD/MT 1,810-1,966.5.
Copper market was characterized by insignificant demand, as
well as insignificant rise of its production that made leading experts correcting their
previous forecasts accordingly to reality of this day.
Two projects could have a sufficient effect on copper
production increase in the world in the end of 2000. The first one is expansion of Boliden
production at its melting works of Ronnscare, the north of Sweden. As a result of this
expansion, productive capacities of the enterprise increased from 140 to 240 ths. tpy of
copper cathodes. The second project was started by Norddoiche Affinery company. This
project deals with expansion of productive capacities for copper concentrate processing
from 740 ths. tpy to 1 mln. tpy.
Taking into account those projects; copper production
decrease in the United States; limited rise of manufacturing in Latin America and its
increase in Australia, it was forecasted that total production of refined copper in the
world in 2000 could amount 11.67 mln. tons, only 0.9% up from previous year. That is why
many experts presume that in 2001 there will be a shortage of 128 ths. tons of copper in
the market.
However, export from CIS countries will undoubtedly make a
contribution to reduction in copper shortage in the market. In January-August 2000, export
from CIS countries to foreign countries amounted to 440.1 ths. tons, that is 9.7% up from
the corresponding period in 1999. In this context, it is necessary to emphasize that
Norilsk Nickel, the largest copper producer in Russia, exported 305.7 ths. tons of copper
in January-August 2000, which is 15.1 ths. tons more than in the corresponding period of
1999.
Finally, it should to be noted, that despite slowed down
global growth tempos in copper consuming in the second half of 2000, the level of
consumption remained high.
FORECASTS
Forecasts of western experts as to development of
non-ferrous metal market in 2001 sound quite uneasily. The anxiety is caused by the fact
that world industrial production being one of the main price determinants for non-ferrous
metals still reduces this year. Now US economy is on the verge of recession. Proceeding
from the fact, that the United States now is named as motor of the world economy, no
comment is necessary. Taking into account the fact that economic growth of Europe and Asia
are on the verge of halt, in accordance with the leading world analysts, for the first
time in the last ten years, there is a possibility of the first synchronous economic
recession. Average level of industrial growth in G7-countries is not to exceed 1.5%,
accordingly to western expert forecasts. It is worth mentioning that weakened demand for
metals, caused by the economic recession, would be accompanied by the finite inventory
reduction at the warehouses of consumers and distributors. Today, inventories of unsold
products are much higher, than during the previous recession. It becomes more obvious,
that many US producers decrease the level of their production for surplus inventory
reduction.
At the same time, copper consumption, having increased
along with the growth of hi-tech sector during the last years, also is to reduce because
of unfavorable development of this sector. It can be proved by a 50% decrease of NASDAQ
index last year.
As a result, consumption of primary non-ferrous metals this
year would not match expectations. Consumption decrease being observed in 1991 would have
effect practically on all the basic non-ferrous metals. It is presumed that mostly metals
will balance between surplus and shortage, and during the year surplus of some of them
will be traced in the world market.
According to experts, the prices for non-ferrous metals
will mostly depend on the US economy, because the United States remains to be the world
largest consumer. According to the latest data, economic growth decrease in the United
States became to be more sensitive than it was presumed. And its looks as a pattern:
industry and transport that are the main aluminum consuming branches are unlucky now.
Moreover, long ago a direct dependence between prices for basic materials and interest
rates in the United States was found. Those figures arrange a single tandem when the
second figure shifts. That is why, taking into account the fact that recently US interest
rates decreased by 0.5%, the prices for basic metals would be able to reduce by 0.5-2% in
nearest future.
But MBR experts forecast that the situations can suit
American economy, acting as a catalyst for rise in prices.
As regards copper and aluminum, 2001’ conjuncture for
these probably will be the most favorable, due to presence of China, which is a large and
active operator in the market. Moreover, supply of copper as well as aluminum reduced
because of reduced copper productive capacities last year and because of the proceeded
decrease in aluminum productive capacities this year.
According to estimates, economic growth in Europe will be
quite stable in 2001. However, even in Europe there is a threat of deflationary blow
towards consumer’s demand as a result of high prices for oil and distrust to Euro.
Aluminum market goes into 2001 with a relative stability.
Notwithstanding the fact of LME inventory increase in the end of the year, general
industrial inventories are at the low. This can be explained by the fact that recently in
the United States a number of melting capacities being able to produce 700 ths. tpy have
been shut. Cradle of this situation is deep in the theory of demand and supply. Growth
reduction in the US economy was caused by narrowed portfolio of orders for aluminum semis
to the lower level than in 1999.
Western experts forecast that in the first half of 2001,
aluminum prices, taking into account current situation, will be close to USD/MT 1,600,
deviating in dependence on the development of situation on the market. In case of
essential excess of demand or stoppage of supplies, the prices for aluminum can abruptly
increase, since frozen capacities, able to start operating in this case, as well as
surplus inventories are too small to compensate metal deficit.
Presently, there is not so many new large projects on
copper concentrate mining and manufacturing in global copper industry. That is why, they
presume slow growth in copper concentrate mining. As regards production of refined copper,
the increase in 2001 is estimated at slightly over 3%.
Copper market, as well as aluminum market are short of
orders from the US consumers. This reduction was caused by the US transport industry,
which contributes 10% to copper consumption and US building (35%), that experience hard
times now.
In the first half of 2001, if no serious shocks arise
(including force-majors), prices for copper will fluctuate within USD/MT 1,700-1,800
Table 1. LME quotations for aluminum in 1998-2000,
USD/MT
| 2000 | 1999 | 1998 | ||||
| Spot | 3 months* | Spot | 3 months* | Spot | 3 months* | |
| Minimum | 1,396.50 | 1,427.50 | 1,216.00 (15.12.98) | 1,238.50 (15.12.98) | 1,487.75
(29.12.97) |
1,517.25
(29.12.97) |
| Маximum | 1,744.50 | 1,739.50 | 1,518.00 (28.01.98) | 1,538.00 (28.01.98) | 1,775.50
(07.08.97) |
1,755.25
(07.08.97) |
| Average price | 1,549.48 | 1,567.05 | 1,357.55 | 1,379.88 | 1,598.42 | 1,618.52 |
* Hereafter, prices of future contracts, which
foresee supplies in 3 months.
Table 2. Average LME prices for aluminum in
1995-2000, USD/MT
| Spot | 3 months* | |
| 1995 | 1,804.98 | 1,831.81 |
| 1996 | 1,504.08 | 1,534.73 |
| 1997 | 1,598.42 | 1,618.52 |
| 1998 | 1,357.55 | 1,379.88 |
| 1999 | 1,361.39 | 1,387.78 |
| 2000 | 1,549.48 | 1,567.05 |
Table 3. Average LME prices for А380.1 aluminum
alloy in 1995-2000, USD/MT
|
Spot |
3 months* |
|
|
1995 |
1,655.08 |
1,686.24 |
|
1996 |
1,300.56 |
1,333.83 |
|
1997 |
1,459.72 |
1,481.88 |
|
1998 |
1,212.60 |
1,231.55 |
|
1999 |
1,192.29 |
1,221.68 |
|
2000 |
1,217.87 |
1,257.39 |
Table 4. LME quotations of aluminum alloy А380.1 in
1998-2000, USD/MT
| 2000 | 1999 | 1998 | ||||
| Spot | 3 months* | Spot | 3 months* | Spot | 3 months* | |
| Minimum | 1,120.50 | 1,165.50 | 996.50 | 1,025.50 | 1,023.00 (23.12.98) | 1,056.00 (23.12.98) |
| Maximum | 1,435.50 | 1,480.00 | 1,358.00
(30.12.99) |
1,395.00
(29.12.99) |
1365.50 (05.01.98) | 1,369.00 (23.01.98) |
| Average price | 1,217.87 | 1,257.39 | 1,192.29 | 1,221.68 | 1,212.60 | 1,231.55 |
Table 5. Dynamics of LME prices for aluminum in
1998-2000, USD/MT
| 2000 | 1999 | 1998 | ||||
| Spot | 3 months* | Spot | 3 months* | Spot | 3 months* | |
| January | 1,680.28 | 1,688.03 | 1,218.45 | 1,224.40 | 1,485.55 | 1,507.9 |
| February | 1,670.27 | 1,666.65 | 1,187.25 | 1,207.28 | 1,465.6 | 1,483.73 |
| March | 1,577.54 | 1,601.54 | 1,181.98 | 1,203.96 | 1,437.52 | 1,459.86 |
| April | 1,457.61 | 1,488.01 | 1,278.55 | 1,299.99 | 1,417.73 | 1,443.18 |
| May | 1,467.19 | 1,492.80 | 1,323.79 | 1,350.13 | 1,364.37 | 1,392.05 |
| June | 1,506.73 | 1,525.02 | 1,315.64 | 1,346.03 | 1,307.26 | 1,336.95 |
| July | 1,563.88 | 1,585.69 | 1,403.76 | 1,428.28 | 1,309.54 | 1,332.59 |
| August | 1,528.02 | 1,552.77 | 1,431.69 | 1,460.90 | 1,311.25 | 1,330.82 |
| September | 1,601.60 | 1,622.21 | 1,492.86 | 1,525.35 | 1,342.64 | 1,369.77 |
| October | 1,500.66 | 1,515.86 | 1,474.79 | 1,509.50 | 1,304.43 | 1,332.99 |
| November | 1,474.00 | 1,495.00 | 1,473.09 | 1,508.75 | 1,295.29 | 1,309.87 |
| December | 1,566.00 | 1,571.00 | 1,554.80 | 1,588.41 | 1,249.41 | 1,258.90 |
Table 6. Dynamics of LME prices for aluminum alloy
А380.1 in 1998-2000, USD/MT
| 2000 | 1999 | 1998 | ||||
| Spot | 3 months* | Spot | 3 months* | Spot | 3 months* | |
| January | 1,387.39 | 1,430.41 | 1,387.39 | 1,430.41 | 1,328.73 | 1,349.85 |
| February | 1,345.76 | 1,383.98 | 1,023.90 | 1,046.71 | 1,290.48 | 1,315.83 |
| March | 1,273.89 | 1,312.75 | 1,059.80 | 1,080.89 | 1,269.95 | 1,298.02 |
| April | 1,172.94 | 1,211.71 | 1,162.45 | 1,181.11 | 1,283.00 | 1,311.15 |
| May | 1,183.43 | 1,223.55 | 1,233.32 | 1,249.76 | 1,363.37 | 1,392.05 |
| June | 1,191.75 | 1,231.93 | 1,201.98 | 1,221.91 | 1,222.57 | 1,219.79 |
| July | 1,225.10 | 1,265.43 | 1,238.98 | 1,269.25 | 1,245.04 | 1,200.70 |
| August | 1,178.52 | 1,219.64 | 1,241.71 | 1,278.71 | 1,148.90 | 1,171.13 |
| September | 1,213.64 | 1,250.86 | 1,288.50 | 1,324.52 | 1,154.05 | 1,182.14 |
| October | 1,143.43 | 1,184.55 | 1,267.71 | 1,307.17 | 1,114.18 | 1,146.11 |
| November | 1,129.70 | 1,168.00 | 1,258.86 | 1,299.70 | 1,084.26 | 1,114.76 |
| December | 1,168.90 | 1,205.90 | 1,304.70 | 1,347.98 | 1,046.71 | 1,077.12 |
Table 7. LME quotations for copper in 1998-2000,
USD/MT
| 2000 | 1999 | 1998 | ||||
| Spot | 3 months* | Spot | 3 months* | Spot | 3 months* | |
| Minimum | 1,606.75 | 1,640.00 | 1,353.75 | 1,381.25 | 1,440.00 | 1,469.00 |
| Maximum | 2,009.00 | 2,035.00 | 1,846.00 | 1,880.50 | 1,879.00 | 1,889.00 |
| Average price | 1,813.45 | 1,840.04 | 1,764.75 | 1,799.18 | 1,473.55 | 1,502.83 |
Table 8. Dynamics of LME prices for copper in
1998-2000, USD/MT
| 2000 | 1999 | 1998 | ||||
| Spot | 3 months* | Spot | 3 months* | Spot | 3 months * | |
| January | 1,843.59 | 1,880.98 | 1,431.38 | 1,458.40 | 1,687.65 | 1,717.20 |
| February | 1,800.39 | 1,835.90 | 1,410.73 | 1,438.16 | 1,664.35 | 1,688.50 |
| March | 1,738.99 | 1,770.10 | 1,378.33 | 1,405.54 | 1,747.34 | 1,771.80 |
| April | 1,678.75 | 1,709.61 | 1,466.00 | 1,494.04 | 1,800.10 | 1,813.58 |
| May | 1,785.62 | 1,806.85 | 1,511.16 | 1,542.58 | 1,731.71 | 1,746.58 |
| June | 1,753.82 | 1,773.86 | 1,422.11 | 1,455.39 | 1,659.38 | 1,671.24 |
| July | 1,799.36 | 1,824.41 | 1,639.59 | 1,671.17 | 1,651.00 | 1,669.37 |
| August | 1,855.86 | 1,883.66 | 1,647.62 | 1,680.50 | 1,620.93 | 1,636.40 |
| September | 1,960.40 | 1,985.98 | 1,750.34 | 1,784.81 | 1,647.61 | 1,665.77 |
| October | 1,898.59 | 1,916.11 | 1,724.12 | 1,756.45 | 1,586.41 | 1,610.33 |
| November | 1,795.00 | 1,820.00 | 1,727.55 | 1,759.14 | 1,573.95 | 1,601.52 |
| December | 1,851.00 | 1,873.00 | 1,764.75 | 1,798.80 | 1,473.55 | 1,502.83 |
Table 9. Average LME prices for copper in 1995-2000,
USD/MT
| Spot | 3 months* | |
| 1995 | 2,935.73 | 2,865.06 |
| 1996 | 2,289.42 | 2,222.15 |
| 1997 | 2,275.09 | 2,220.55 |
| 1998 | 1,653.67 | 1,674.59 |
| 1999 | 1,572.81 | 1,603.78 |
| 2000 | 1,813.45 | 1,840.04 |
UKRAINE
Foreign trade
In 2000, Ukrainian export of nonferrous metals and products
accounted for 680.5 ths. tons worth USD 773.5 mln, correspondingly 22.5% and 36.7% up from
1999 (555.6 ths. tons and USD 565.9 mln.)
In 2000, the portion of copper and aluminum products in
total Ukrainian export of non-ferrous metals indicated 85.5%, while currency inflows from
export of these indicated 86.4%.
Physical export of of copper and aluminum group commodities
in 2000 exceeded indicators of 1999 by on 17.9% (currency earnings added 32.8%).
Export of nickel, lead, zinc, and tin in 2000 amounted to
13 ths. tons worth USD 10 mln., i.e. 1.9% and 1.3% in total physical export and currency
inflows correspondingly. To compare, similar figures in 1999 were 9 ths. tons and USD 4.2
mln.
It is worth mentioning that if in 1999 export indicators
for other groups of non-ferrous metals, metal ceramics and their products amounted to 40.7
ths. tons worth USD 33.6 mln., 2000’ figures were at 70.7 ths. tons and USD 49.9 mln.
The increase accounted for 73.7% and 48.5% correspondingly. The portion of those
commodities in total export of non-ferrous metals in 2000 (physical volume and currency
inflows) equaled to 10.4% and 6.5% correspondingly.
Table 10. Export dynamics of non-ferrous metals and
products in 1999-2000
| 1999 | 2000 | ||||||
| Physical volume,
‘000 tons |
Currency earnings, USD mln. | Physical volume,
‘000 tons |
Currency earnings, USD mln. | ||||
| 74 | Copper and copper products | 134.5 | 136.1 | 155.4 | 195.8 | 115.5 | 143.9 |
| 75 | Nickel and nickel products | 0.3 | 1.5 | 0.4 | 3.3 | 133.3 | 220.0 |
| 76 | Aluminum and aluminum products | 359.3 | 367.1 | 426.5 | 472.5 | 118.7 | 128.7 |
| 78 | Lead and lead products | 7.3 | 1.6 | 10.9 | 4.0 | 149.3 | 250.0 |
| 79 | Zinc and zinc products | 1.4 | 1.1 | 1.4 | 1.2 | 100.0 | 109.1 |
| 80 | Tin and tin products | Unsuffic. | Unsuffic. | 0.3 | 1.5 | ||
| 81 | Other non-precious metals | 40.7 | 33.6 | 70.7 | 49.9 | 173.7 | 148.5 |
| 82 | Tools and knifes, spoons | 1.7 | 12.4 | 3.3 | 30.6 | 194.1 | 246.8 |
| 83 | Other non-precious metal products | 10.4 | 12.5 | 11.7 | 14.7 | 112.5 | 117.6 |
| TOTAL | 555.6 | 565.9 | 680.6 | 773.5 | 122.5 | 136.7 | |
Copper group
During 2000 Ukraine exported 155.4 ths. tons of copper
group products worth USD 195.8 mln. In comparison with 1999, these figures increased by
15.5% and 43.9% correspondingly.
Unrefined copper bullions, refined copper, copper alloys as
well as copper and copper alloy scraps remain the main export items of the copper group.
Export of unrefined copper in 2000 amounted to 21.3 ths.
tons worth USD 29.1 mln. Export of refined copper and copper alloys amounted to 77 ths.
tons worth USD 105.4 mln. The portion of these commodities in total export of copper group
amounted to 58.8% (physical volume) and 68.7% (currency earnings).
In 2000, export of commodities within the subgroup
“Refined copper and copper-alloys” amounted to 245.3% (physical volume) and 342.9%
(currency inflows) against 1999.
Table 11. Main articles of Ukrainian export of copper
and copper products in 1999-2000.
| 1999 | 2000 | |||||
| Physical volume,
‘000 tons |
Currency earnings, USD mln. | Physical volume,
‘000 tons |
Currency earnings, USD mln. | 2000/1999 ratio, %
(physical volume) |
2000/1999 ratio, % (currency earnings) | |
| Unrefined copper; copper anodes for electrolytic refining. |
28.90 | 29.50 | 21.30 | 29.10 | 73.7 | 98.6 |
| Refined copper, raw copper-alloys | 22.30 | 23.80 | 77.00 | 105.40 | 345.3 | 442.9 |
| Copper and copper products (the whole copper group), including copper scrap |
134.50 | 136.10 | 155.40 | 195.80 | 115.5 | 143.9 |
Table 12. Main importers of Ukrainian copper and
copper products in 2000
| Rating | Country | Percentage in total export, % | Percentage in total supplies within this group, % |
| 1 | Germany | 63.4 | 63.8 |
| 2 | Switzerland | 8.6 | 7.0 |
| 3 | Belgium | 8.1 | 8.3 |
| 4 | USA | 4.0 | 3.0 |
| 5 | Russia | 3.7 | 2.9 |
| 6 | Italy | 2.7 | 3.1 |
| 7 | Latvia | 1.5 | 3.1 |
| 8 | Uzbekistan | 1.2 | 1.8 |
| 9 | Poland | 1.1 | 1.2 |
| 10 | Hungary | 1.0 | 1.0 |
| Other countries | 4.6 | 4.8 | |
| TOTAL | 100.0 | 100.0 |
Aluminum group
When summarizing results of non-ferrous metal export in
2000, everyone understood that aluminum group commodities would be a winner under such
export situation.
In 2000, 26.5 ths. tons of aluminum group commodities were
exported from Ukraine for a sum of USD 472.5 mln. Those indicators exceeded similar
1999’ figures of 1999 by 18.7% and 28.7% correspondingly.
Percentage of this group in total physical export of
non-ferrous metals in 2000 amounted to 62.7%, while currency inflows amounted to 61.1%.
Primary aluminum and aluminum alloys in piglets ranked the
first, with a 86.8% in total export of aluminum group products. Total export of this
commodity amounted to 426.5 ths. tons worth USD 472.5 mln.
Table 13. Main articles of Ukrainian export of
aluminum and aluminum products in 1999-2000.
| 1999 | 2000 | |||||
| Commodity articles | Physical volume,
‘000 tons |
Currency earnings, USD mln. | Physical volume,
‘000 tons |
Currency earnings, USD mln. | 2000/1999 ratio, %
(physical volume) |
2000/1999 ratio, % (currency earnings) |
| Raw aluminum and raw aluminum alloys | 318.3 | 326.0 | 369.9 | 410.0 | 116.2 | 125.8 |
| Aluminum and aluminum products (aluminum group), including aluminum scrap |
359.3 | 367.1 | 426.5 | 472.5 | 118.7 | 128.7 |
Table 14. Main importers of Ukrainian aluminum and
aluminum products in 2000
| Rating | Country | Percentage in total exports | Percentage in total supplies within this group, % |
| 1 | Russia | 20.4 | 14.4 |
| 2 | USA | 16.8 | 19.2 |
| 3 | Italy | 13.2 | 14.4 |
| 4 | Hungary | 11.5 | 9.0 |
| 5 | Germany | 6.7 | 7.6 |
| 6 | Japan | 6.6 | 6.5 |
| 7 | Slovakia | 4.6 | 4.3 |
| 8 | Latvia | 4.4 | 8.6 |
| 9 | Switzerland | 2.3 | 2.3 |
| 10 | Czech | 2.1 | 2.3 |
| Other countries | 11.4 | 11.4 | |
| TOTAL | 100.0 | 100.0 |
Supply characteristics
In 2000, the largest export supplies were as follows:
- raw aluminum and aluminum alloys – 369.9 ths. tons
(54.4 %) worth USD 410 mln. (53.0%);
- refined copper and copper alloys – 77 ths. tons (11.3%)
worth USD 105.4 mln. (13.6%).
Conclusions
The export year of 2000 is over. What can be said about
peculiarities of the annual results? First, export indicators reached their high in the
last years of Ukrainian independence. Ukrainian non-ferrous metal exporters hot a record
high of 681 ths. tons worth USD 773.5 mln.. If such results were reported 17-20 year ago,
they would probably receive governmental awards. However, quantitative increase does not
foresee enhancement of quality. Raw materials and semis predominated over other products
among exported non-ferrous metals. The only good fact is that more and more funds arrive
to the state budget of Ukraine and international trade balance receives additional
support, while Ukraine enters “positive” horizons.