NON-FERROUS METALS
NON-FERROUS METALS
GLOBAL MARKET
Hopes for a revival of purchasing interest on aluminum and
copper markets were not to come true at the beginning of the second quarter of 2001. March
is usually a high month, but this year, judging by the figures registered on the two
markets, it was the worst one, owing to lack of those willing to buy and consumers’ low
activity.
A problematic situation on the American and Asian markets
and two consecutive reductions of interest rates in the USA (which indicates an economic
recession in this country) made buyers especially careful about copper and aluminum. In
addition, large stockpiled reserves of these metals in a number of European and Asian
countries support the statement that buyers are now reluctant to purchase non-ferrous
metals. However, a tendency towards a cutback of stockpiled non-ferrous reserves, which
started in the 3-rd quarter of 2000 and became especially prominent in the 4-th quarter,
has not discontinued yet.
Low demand is currently a paramount problem on the market,
which is even more pressing than difficulties with metal supplies. Manufacturers are ready
to further curtail production if the prices for aluminum and copper continue going down.
Aluminum
The beginning of 2001 was marked by a growth of average
prices for aluminum in January. Against the corresponding figures of December 2000, the
average price for aluminum at London Metal Exchange added USD/ton 50 up to USD/ton
1,616.27 fluctuating between USD/ton 1,521 and 1,737.
In February-March, prices for aluminum began to gradually
go down. In February, the average aluminum quotation at LME decreased by USD/ton 12
against the previous month’s figure, to USD/ton 1,604.9, whereas in March, this figure
dropped to USD/ton 1,508.6, which clearly indicated that the situation on this market had
worsened.
At the beginning of February, the price for aluminum
settled a little above USD/ton 1,600. During the month, the average price for this metal
was keeping at USD/ton 1,605. Information about a possible suspension of production at
Longview smelter in the west of the USA (the state of Washington) in the following year
had a more or less positive impact on the market over only a couple of weeks, and the
expected jump of aluminum prices at the end of February did not occur. As concerns details
of this event, the plant’s new owners, McCook Metals (affiliate of Michigan Avenue
Partners), declared that production would be suspended with the purpose of upgrade and
expansion of power-generating capacities. It is planned to complete the upgrade by 2004,
when the enterprise with the annual productive capacity of 200-210 ths. tons of aluminum
will be fully provided with electric energy.
At the beginning of March, due to the information that a
smelter owned by Balco company in India (annual output of 150 ths. tons of aluminum) may
suspend its operation for 3-4 months owing to a strike, the price for aluminum kept at
USD/ton 1,580-1,600.
Nearly simultaneously with this news, the directorate of
Germany-based VAW company announced that a new investment program aimed at a modernization
of the repurchased Kurri Kurri aluminum plant in Australia will allow them to increase its
productive capacity from 150 ths. tons to 250 ths. tons of aluminum per annum.
At the same time, according to data with the International
Aluminum Institute, the global aluminum production in January 2001 lowered by 12 ths. tons
against the corresponding 2000’ figure down to 1.784 mln. tons. This is the first
decrease of the corresponding figures after 1995.
The curtailment of the global aluminum production occurred
mainly owing to an unexpectedly substantial cutback of aluminum output in North American
countries. In January 2000, this region of the world made 532 ths. tons of aluminum,
whereas in January 2001, this figure decreased by nearly 70 ths. tons down to 463 ths.
tons. This event produced a shortage on the aluminum market although all other regions
reported augmentations of aluminum output in the year’s first month.
The premiums for aluminum of the CIS origin were as follows
in Rotterdam in January-March 2001:
A5 aluminum: USD/ton 5-15;
A6 aluminum: USD/ton 10-25;
A7 aluminum: USD/ton 15-30.
Outlooks for aluminum market
Opinions on average prices for aluminum in 2001 voiced by
the primary world experts vary considerably: the forecast figures fluctuate within USD/ton
1,540 and 1,760. However, it is more likely that the average price for this metal will
settle somewhere in between USD/ton 1,580 and 1,620.
Copper
In the first two months of 2001, prices for copper were
stable at USD/ton 1,700-1,800, whereas at the beginning of March, they began to grow
reaching USD/ton 1,824 on March 5. However, at this time, market operators were worried
with the economic recession in the USA. As a result, copper consumers purchased only small
batches of this metal waiting for a further price reduction.
European consumers paid close attention to China, which
came back to the market after celebration of the Chinese New Year, but no significant
events took place. Chinese copper producers kept their import quota at 800 ths. tons for
copper concentrate and 200 ths. tons for copper anodes. In 2000, China imported 1.8 mln.
tons of copper concentrate and anodes, whereas in January-February, it exported 125 ths.
tons of these raw materials. This situation became possible after introduction of 13% VAT
repayment to the primary copper producers in China, which made Chinese copper competitive
on the domestic market and substantially undermined copper imports to this country.
This statement is supported by the following figures. In
January, China imported only 24.1 ths. tons of copper, which was 27% less than it did in
January 2000 and 42% less than in the previous month. At the same time, copper output in
China totaled 106.4 ths. tons in January, which corresponded to a 10% increment from the
figure reported in January 2000.
Premiums for “A” copper were as follows in
February-March 2001:
in Shanghai – USD/ton 54-55;
in Liverpool and Livorno – USD/ton 36-38;
in Rotterdam – USD/ton 20;
in Dunkerk – USD/ton 40.
Premiums for copper of CIS origin, in particular, in
Russia, Rotterdam, and Hamburg, were around USD/ton
10-15.
As concerns the general situation on the copper market, it
is possible to state that beginning with the 2-nd quarter of 2000, this market is
indicating a shortage of copper, which may continue up to the 3-rd quarter of 2001. After
the period of growing copper supplies to Western countries, primarily from Latin America,
at the end of the 1990s, new productive capacities are now dwindling. In addition, the
copper market is still experiencing consequences of rationalization of copper production
in the USA in 1999. A number of copper-producing enterprises are likely to shut down,
because the present situation in the industry is now similar to that in aluminum industry,
which has lost a portion of its productive capacities, owing to high energy expenditures.
Outlooks for copper market
Experts’ price forecast for 2001 is rather too
optimistic. Leading analysts say the average price for copper will come to USD/ton
2,100-2,200 this year. However, this forecast can come true only if the market situation
develops in the most favorable manner. Taking into account the economic situation in the
USA, Japan, and primary European countries, there are not many reasons for such optimistic
forecast. The figure of USD/ton 1,750-1,850 seems to be more realistic for the current
year.
UKRAINE
Foreign trade
In January-February 2001, non-ferrous exports from Ukraine
totaled 80.7 ths. tons worth USD 127.6 mln. As compared with the figure registered in the
corresponding period of 2000, physical exports decreased by 18.3%, whereas export revenues
added 22.27%. In January-February 2000, these figures were respectively equal to 98.7 ths.
tons and USD 104.4 mln.
According to reports of January-February 2001, copper and
aluminum collectively accounted for 85% of physical non-ferrous exports from Ukraine and
for 79.5% of the aggregate non-ferrous export revenues.
In terms of quantitative indicators, aluminum and copper
exports dropped by 24.3% in January-February 2001 and revenues, in turn, went 7.3% down.
Export supplies of nickel, lead, zinc, and tin came to the
aggregate 1.25 ths. tons worth USD 1.2 mln., i. e. 1.55% and 0.94% of the total
non-ferrous export figures respectively. For comparison, physical exports of the indicated
metals and revenues from them totaled 1,630 tons worth USD 0.8 mln. in January-February
2000.
It is worth pointing out that in January-February 2000,
export supplies of other non-ferrous metals, metal ceramics and their products totaled 5.2
ths. tons for the sum of USD 5.8 mln., whereas 8.8 ths. tons of the indicated commodities
worth USD 7.8 mln. were exported in January-February 2001. The corresponding increments of
the respective figures came to 70.17% and 33.9%. This category of non-ferrous metals
accounted for 11% (quantity) and 6.1% (revenues) of the total non-ferrous exports in
January-February 2001.
Copper group
In the first two months of 2001, Ukraine exported 18.3 ths.
tons of copper and copper products worth USD 30.4 mln. In comparison with the
corresponding 2000’ period, the quantitative figure decreased by nearly 4%, whereas
export revenues in this metal group jumped 63.2%.
The main exported copper articles still are unrefined
copper ingots and refined copper and copper-based alloys.
Crude copper exports in January-February 2001 totaled 5.3
ths. tons worth USD 8.6 mln. In the same period, exports of refined copper and
copper-based alloys added up to 11.6 ths. tons for the total sum of USD 19.6 mln. The
share of this commodity group in the total copper exports came to 92.8% in terms of both
exported quantity and export revenues.
The increments of export supplies in this subgroup (refined
copper and copper-based alloys) were 59% in quantity and 177% in revenues in the report
period of 2001, against the figures reported in January-February 2000.
Aluminum group
Commodities of this group were leaders in non-ferrous
exports from Ukraine at the beginning of 2001.
In January-February 2001, Ukraine exported 50.3 ths. tons
of aluminum commodities worth USD 71 mln. These indicators lowered against the
corresponding 2000’ figures by 29.3% and 6.5% respectively.
Aluminum group accounted for 62.4% in the total non-ferrous
exports in terms of quantity and for 55.7% of the total revenues from non-ferrous exports
in 2000.
Just as before, the primary exported articles were primary
aluminum and aluminum-based alloys in ingots, which collectively account for 85.3% in the
total aluminum exports. The total of 46.4 ths. tons of the indicated commodities worth USD
60.6 mln. were exported in the report period of 2001.
Overview of export supplies
The following commodities accounted for the largest export
figures in January-February 2001:
- crude aluminum and aluminum-based alloys – 46.6 ths.
tons (62.4% of the total) worth USD 60.6 mln. (55.7%);
- refined copper and copper-based alloys – 11.6 ths. tons
(14.4%) worth USD 19.6 mln. (15.4%).
Table 1. LME quotations for aluminum in 1999-2001
(January-March), USD/MT
Price | 2001 | 2000 | 1999 | |||
Spot | 3 months* | Spot | 3 months* | Spot | 3 months* | |
Minimum | 1,469.00
(30.03.01) |
1,492.00
(22.03.01) |
1,396.50 | 1,427.50 | 1,139.75 | 1,162.75 |
Maximum | 1,737.00
(31.01.01) |
1,642.00
(31.01.01) |
1,744.50 | 1,739.50 | 1,630.50
(30.12.99) |
1,650.00
(30.12.99) |
Average price | 1,576.90 | 1,562.08 | 1,560.50 | 1,578.25 | 1,361.39 | 1,387.78 |
* Hereinafter, prices of future contracts, which foresee supplies in 3
months.
Table 2. Average LME prices for aluminum in 1995-2001
(January-March), 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 | 1,560.50 | 1,578.25 |
2001 | 1,576.90 | 1,562.08 |
Table 3. Average LME prices for А380.1 aluminum
alloy in 1995-2001 (January-March), 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 | 1,254.32 | 1,294.25 |
2001 | 1,233.97 | 1,245.86 |
Table 4. LME quotations of aluminum alloy А380.1 in
1999-2001 (January-March), USD/MT
Price | 2001 | 2000 | 1999 | |||||
Spot | 3 months* | Spot | 3 months* | Spot | 3 months* | |||
Minimum | 1,100.00 (03.01.01) | 1,145.00 (03.01.01) | 1,120.50 | 1,165.50 | 996.50 | 1,025.50 | ||
Maximum | 1,290.00
(05.02.01) |
1,310.00 (05.02.01) | 1,435.50 | 1,480.00 | 1,358.00
(30.12.99) |
1,395.00
(29.12.99) |
||
Average price | 1,223.97 | 1,245.86 | 1,254.32 | 1,294.25 | 1,192.29 | 1,221.68 |
Table 5. Dynamics of LME prices for aluminum in
1999-2001 (January-March), USD/MT
2001 | 2000 | 1999 | ||||
Spot | 3 months* | Spot | 3 months* | Spot | 3 months* | |
January | 1,616.27 | 1,576.82 | 1,680.28 | 1,688.03 | 1,218.45 | 1,224.40 |
February | 1,604.90 | 1,583.35 | 1,670.27 | 1,666.65 | 1,187.25 | 1,207.28 |
March | 1,509.52 | 1,526.07 | 1,577.54 | 1,601.54 | 1,181.98 | 1,203.96 |
April | – | – | 1,457.61 | 1,488.01 | 1,278.55 | 1,299.99 |
May | – | – | 1,467.19 | 1,492.80 | 1,323.79 | 1,350.13 |
June | – | – | 1,506.73 | 1,525.02 | 1,315.64 | 1,346.03 |
July | – | – | 1,563.88 | 1,585.69 | 1,403.76 | 1,428.28 |
August | – | – | 1,528.02 | 1,552.77 | 1,431.69 | 1,460.90 |
September | – | – | 1,601.60 | 1,622.21 | 1,492.86 | 1,525.35 |
October | – | – | 1,500.66 | 1,515.86 | 1,474.79 | 1,509.50 |
November | – | – | 1,474.00 | 1,495.00 | 1,473.09 | 1,508.75 |
December | – | – | 1,566.00 | 1,571.00 | 1,554.80 | 1,588.41 |
Table 6. Dynamics of LME prices for aluminum alloy
А380.1 in 1999-2001 (January-March), USD/MT
2001 | 2000 | 1999 | ||||
Spot | 3 months* | Spot | 3 months* | Spot | 3 months* | |
January | 1,152.91 | 1,186.09 | 1,387.39 | 1,430.41 | 1,025.50 | 1,052.46 |
February | 1,259.85 | 1,275.40 | 1,345.76 | 1,383.98 | 1,023.90 | 1,046.71 |
March | 1,259.14 | 1,276.09 | 1,273.89 | 1,312.75 | 1,059.80 | 1,080.89 |
April | – | – | 1,172.94 | 1,211.71 | 1,162.45 | 1,181.11 |
May | – | – | 1,183.43 | 1,223.55 | 1,233.32 | 1,249.76 |
June | – | – | 1,191.75 | 1,231.93 | 1,201.98 | 1,221.91 |
July | – | – | 1,225.10 | 1,265.43 | 1,238.98 | 1,269.25 |
August | – | – | 1,178.52 | 1,219.64 | 1,241.71 | 1,278.71 |
September | – | – | 1,213.64 | 1,250.86 | 1,288.50 | 1,324.52 |
October | – | – | 1,143.43 | 1,184.55 | 1,267.71 | 1,307.17 |
November | – | – | 1,129.70 | 1,168.00 | 1,258.86 | 1,299.70 |
December | – | – | 1,168.90 | 1,205.90 | 1,304.70 | 1,347.98 |
Table 7. LME quotations for copper in 1999-2001
(January-March), USD/MT
Price | 2001 | 2000 | 1999 | |||
Spot | 3 months* | Spot | 3 months* | Spot | 3 months* | |
Minimum | 1,664.50 (29.03.01) | 1,687.00 (29.03.01) | 1,606.75 | 1,640.00 | 1,353.75 | 1,381.25 |
Maximum | 1,837.00 (23.03.01) | 1,830.50 (23.03.01) | 1,897.50 | 1,935.50 | 1,846.0 | 1,880.50 |
Average price | 1,763.97 | 1,778.18 | 1,771.50 | 1,800.24 | 1,764.75 | 1,799.18 |
Table 8. Dynamics of LME prices for copper in
1999-2001 (January-March), USD/MT
2001 | 2000 | 1999 | ||||
Spot | 3 months* | Spot | 3 months* | Spot | 3 months* | |
January | 1,787.50 | 1,795.07 | 1,843.59 | 1,880.98 | 1,431.38 | 1,458.40 |
February | 1,765.65 | 1,781.80 | 1,800.39 | 1,835.90 | 1,410.73 | 1,438.16 |
March | 1,38.77 | 1,757.68 | 1,738.99 | 1,770.10 | 1,378.33 | 1,405.54 |
April | – | – | 1,678.75 | 1,709.61 | 1,466.00 | 1,494.04 |
May | – | – | 1,785.62 | 1,806.85 | 1,511.16 | 1,542.58 |
June | – | – | 1,753.82 | 1,773.86 | 1,422.11 | 1,455.39 |
July | – | – | 1,799.36 | 1,824.41 | 1,639.59 | 1,671.17 |
August | – | – | 1,855.86 | 1,883.66 | 1,647.62 | 1,680.50 |
September | – | – | 1,960.40 | 1,985.98 | 1,750.34 | 1,784.81 |
October | – | – | 1,898.59 | 1,916.11 | 1,724.12 | 1,756.45 |
November | – | – | 1,795.00 | 1,820.00 | 1,727.55 | 1,759.14 |
December | – | – | 1,851.00 | 1,873.00 | 1,764.75 | 1,798.80 |
Table 9. Average LME prices for copper in 1995-2001,
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 | 1,771.50 | 1,800.24 |
2001 | 1,763.97 | 1,778.18 |
Table 10. Export dynamics of non-ferrous metals and
products in 2000-2001 (January-February)
CC FER code | Commodity | 2000 | 2001. | 2001/2000 ratio, %
(physical volume) |
2001/2000 ratio, % (currency earnings) | ||
Physical volume,
ths. tons |
Currency earnings, USD ths. | Physical volume,
ths. tons |
Currency earnings, USD ths. | ||||
74 | Copper and copper products | 18,962 | 18,616 | 18,210 | 30,383 | 96.04 | 163.21 |
75 | Nickel and nickel products | 7 | 179 | 11 | 744 | 143.24 | 415.39 |
76 | Aluminum and aluminum products | 71,229 | 75,888 | 50,316 | 71,004 | 70.64 | 93.56 |
78 | Lead and lead products | 1,621 | 549 | 1,220 | 443 | 75.21 | 80.75 |
79 | Zinc and zinc products | 101 | 85 | 16 | 18 | 16.12 | 20.81 |
80 | Tin and tin products | 0 | 0 | 1 | 6 | ||
81 | Other non-precious metals | 5,193 | 5,807 | 8,838 | 7,776 | 170.17 | 133.90 |
82 | Tools and knifes, spoons | 312 | 1,602 | 844 | 15,727 | 270.28 | 981.78 |
83 | Other non-precious metal products | 1,300 | 1,639 | 1,214 | 1,510 | 93.36 | 92.11 |
TOTAL | 98,726 | 104,365 | 80,669 | 127,611 | 81.71 | 122.27 |
Table 11. Main articles of Ukrainian export of copper
and products in 2000-2001 (January-February).
Commodity | 2000 | 2001 | ||||
Physical volume,
ths. tons |
Currency earnings, USD mln. | Physical volume,
ths. tons |
Currency earnings, USD mln | 2001/2000 ratio, %
(physical volume) |
2001/2000 ratio, % (currency earnings) | |
Crude copper; copper anodes for electrolytic refining. |
1,782 | 1,621 | 5,316 | 8,585 | 298.36 | 529.57 |
Refined copper, crude copper alloys | 7,282 | 7,091 | 11,576 | 19,614 | 158.96 | 276.59 |
Copper and copper products (copper group), including copper scrap and wastes |
18,962 | 18,616 | 18,210 | 30,383 | 96.04 | 163.21 |
Table 12. Main importers of Ukrainian copper and
products in January-February 2001
Rating | Country | Percentage in total export, % | Percentage in total supplies within this group, % |
1 | Germany | 36.5 | 34.6 |
2 | Turkey | 11.1 | 9.7 |
3 | Switzerland | 9.8 | 11.0 |
4 | France | 6.4 | 6.6 |
5 | USA | 4.9 | 6.2 |
6 | South Korea | 4.8 | 5.0 |
7 | Hong Kong | 4.3 | 4.2 |
8 | Russia | 4.3 | 4.5 |
9 | Belgium | 3.9 | 3.7 |
10 | China | 3.0 | 3.1 |
Other countries | 11.0 | 11.4 | |
TOTAL | 100,0 | 100,0 |
Table 13. Main articles of Ukrainian export of
aluminum and products in 2000-2001 (January-February).
Commodity | 2000 | 2001 | ||||
Physical volume,
ths. tons |
Currency earnings, USD mln. | Physical volume,
ths. tons |
Currency earnings, USD mln. | 2001/2000 ratio, %
(physical volume) |
2001/2000 ratio, % (currency earnings) | |
Crude aluminum, Crude aluminum alloys | 56.7 | 63.0 | 46.6 | 60.6 | 82.24 | 96.22 |
Aluminum and products (aluminum group), including aluminum scrap and wastes |
71.2 | 75.9 | 50.3 | 71.0 | 70.64 | 93.56 |
Table 14. Main importers of Ukrainian aluminum and
products in January-February 2001
Rating | Country | Percentage in total export, % | Percentage in total supplies within this group, % |
1 | Hungary | 27.5 | 24.8 |
2 | Italy | 13.5 | 17.5 |
3 | USA | 12.3 | 10.9 |
4 | Russia | 8.0 | 6.6 |
5 | Slovakia | 7.7 | 7.9 |
6 | Japan | 7.6 | 8.8 |
7 | Germany | 6.1 | 4.5 |
8 | Cyprus | 3.0 | 3.5 |
9 | Hong Kong | 2.4 | 2.7 |
10 | Latvia | 2.4 | 1.9 |
Other countries | 9.5 | 10.9 | |
TOTAL | 100.0 | 100.0 |