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Nonferrous Market Update

Mine supply disruptions have dominated the headlines on the nonferrous front. Macquarie Research reports that “the Indonesian mining ministry rocked the copper market again … by announcing that it had recommended that PT Freeport Indonesia (PTFI), the operator of world #2 mine Grasberg, be granted a permit to export 1.1Mt gross weight of copper concentrate until 16 Feb 2018.”

NonferrousBeat2017Issue1MktRptChart1Meanwhile, Fastmarkets reported that “Freeport-McMoRan expects first-quarter production and sales to fall by 17% at its PT Freeport Indonesia (PTFI) operations, which declared force majeure on nearby deliveries from its Grasberg copper mine.” At the world’s largest copper mine, Escondida in Chile, labor negotiations have reportedly failed to make any progress according to Reuters, putting further pressure on global copper supply. The nickel market has also been hit by supply disruptions in the Philippines as the Filipino government continues to take a tough stance against nickel mining, helping to underpin nickel prices.

For the year-to-date (through February 20), the LME official 3-mo. asking price for copper was up 8.8% while the corresponding prices nickel price was up around 10%. As of February 20th, lead prices lead the nonferrous pack, up 14 percent year-to-date, while aluminum and zinc prices advanced around 11 percent each since the end of 2016. The only major nonferrous metal in negative territory as of late February was tin, with the LME 3-mo. tin asking price down 6 percent for the year-to-date. 

NonferrousBeat2017Issue1MktRptCharts

On the scrap export front, softer demand from mainland China and a stronger dollar contributed to another drop in U.S. nonferrous exports last year. U.S. copper and copper alloy scrap exports declined 1.2% in 2016 to 943,305 metric tons according to Census Bureau trade data, the fifth consecutive annual decline. Aluminum scrap exports, including UBCs and remelt secondary ingot, posted an even sharper drop last year, falling 12.8 percent by volume year-on-year to 1.35 million metric tons in 2016.

Nonferrous Beat

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