SMM Metals Reports

China Alumina Imports Fall in March; Further Declines Expected in April

SHANGHAI, Apr. 23 (SMM) – Inbound shipments of alumina to China fell 18.91% to 376,900 tonnes in March due to production cuts at aluminum producers and falling prices, Shanghai Metals Market understands.   
In China, more than 1.32 million tonnes of aluminum capacity has been put offline by the week ending April 18, leaving 660,000-tpy alumina capacity, or an additional monthly increase of 55,000 tonnes of alumina in surplus. 
In Guangxi, alumina price slid to 2,180 yuan ($353) per tonne from 2,380 yuan per tonne (ex-works, including tax) before the Chinese New Year holiday. 
As domestic aluminum prices tumbled, term price for alumina weakened to 2,250 yuan per tonne in Shanxi and Henan, while alumina price at ports held above 2,500 yuan per tonne, leaving domestically-produced alumina in a more favorable position, according to SMM’s Research Team.  
SMM expects a further decline in imports in April due to rising FOB price for Australian alumina and inventory pressures at China’s ports.

SMM Brief on SHFE Aluminum Futures (2014-4-23)

SHANGHAI, Apr. 23 (SMM) – On Tuesday night, SHFE 1407 aluminum contract became the most active one, which dipped to RMB 13,315/mt after starting at RMB 13,340/mt. June aluminum on the SHFE, however, rebounded to RMB 13,385/mt afterwards before finishing the night session at RMB 13,380/mt. Trading volumes totaled 9,866 lots, and positions added 1,454 lots to 110,288 lots. HSBC’s flash China manufacturing PMI rose to 48.3 in April, snapping a 5th straight month of decline. The most active contract moved higher to RMB 13,515/mt on Wednesday thanks to upbeat manufacturing data, closing the day up RMB 245/mt or 1.85% at RMB 13,515/mt. Trading volumes surged to 37,812 lots, and positions increased 7,962 lots to 116,796 lots.  

SMM Copper Market Daily Review (2014-4-21)

SHANGHAI, Apr. 22 (SMM) – With the lack of guidance from LME copper prices , SHFE copper prices started last Friday’s night session at RMB 46,330/mt, and then rose to a high of RMB 46,410/mt. The red metal dipped as low as RMB 46,190/mt and finished down RMB 90/mt at RMB 46,360/mt. Traded volumes stood at around 70,000 lots, while positions were barely changed. As trading remained suspended Monday on the London Metal Exchange, SHFE copper prices recouped early losses to touch a high of RMB 46,830/mt, and closed up RMB 170/mt, or 0.37%, at RMB 46,620 /mt. Traded volumes shed by 47,872 lots, while positions lost by 5,288 lots. SHFE copper prices have found solid support at the 20-day moving average on Monday and are expected to trend higher Tuesday after LME copper prices resume trading.
In the Shanghai physical market, copper was offered Monday at a premium of RMB 800-920/mt over the nearby SHFE copper contract. Traded prices were RMB 48,100-48,200/mt for standard-quality copper and RMB 48,140-48,300/mt for high-quality copper. Trading remained suspended Monday on the London Metal Exchange. Physical supply was still limited, with prices for high-quality copper held firm and premiums up further. As SHFE copper prices staged a rally by the midday, copper premiums narrowed, but were still elevated. Downstream producers barely entered the market after restocking last Friday, while middlemen mostly conducted short-term trading, with sluggish trading activity. Physical premiums are expected to rise as high as around RMB 1,000/mt since tight supply has yet fully improved. As SHFE copper prices stayed in range-bound trading during the afternoon session, a small decrease in copper supply sent premiums for standard-quality copper up a touch and even close to those for high-quality copper. Physical copper was offered mostly at a premium of RMB 830-920/mt over the nearby SHFE contract, with traded prices between RMB 48,200-48,300/mt. Hydro-copper producers discounted goods subsequently on sluggish consumption, with premiums narrowing to RMB 720-800/mt. Premiums are expected to remain high since copper supply shortage has yet fully improved. 

China’s Finished Steel Exports to Fall Slightly in April

SHANGHAI, Apr. 11 (SMM) – China’s exports of finished steel were expected to remain high in April, but would likely fall slightly compared with March’s levels according to Steelease, Shanghai Metals Market's ferrous branch. 
In March, China exported 6.76 million tonnes of finished steel in March, surging by 40.8% month-on-month and 28.0% year-on-year, according to China Customs. 
Such sharp growth was in line with Steelease’s previous predication for exports of finished steel during March, given fewer working days in February and the arrival of peak-demand season for many overseas manufacturing sectors.  
Steelease foresaw high volumes but a decline in April’s exports from March’s level due to the following three factors.  
First, the global economy began to recover in March following a severe winter, boosting steel demand as well. April is a traditionally peak-demand month, so operating rates at manufacturers in the north hemisphere normally rise, increasing steel demand. 
Second, manufacturing activity in South Korea and India, two of China’s major finished steel export destinations, continues to recover. South Korea’s manufacturing PMI for March was 50.4, up from February’s 49.8. March manufacturing PMIs in the euro zone and India were 53 and 51.3, respectively, and although both readings were down slightly from February, the indices remained 50 and signaled expansion in activity.    
Third, orders for finished steel to be exported in April were largely placed in February and March, a period when relatively low steel prices gave overseas traders and downstream enterprises incentive to place orders. In addition, Chinese finished steel still has a price   advantage over goods from the Commonwealth of Independent States, which will also keep exports high.   
However, it is worth noting that anti-dumping and anti-subsidy complaints against Chinese steel products have been growing recently, so China’s long-term finished steel export outlook is not optimistic. 

Indonesian scrap imports grew 23% in 2013, says government data

 According to recent government statistics, Indonesian scrap imports were up significantly during the year 2013. The country’s imports of scrap totaled 2.40 million tons during the year, 23.4% higher when compared with the scrap imports during a year before.
The largest scrap exporter to Indonesia during 2013 was the US. The scrap imports by Indonesia from the US totaled 572,000 tons, accounting for almost one-fourth of the total yearly scrap imports by the country. The second largest exporter was Australia with 378,000 tons, followed by Singapore with 332,000 tons.
According to data, the US exported 407,000 tons of scrap to Indonesia during Jan-July this year. The scrap imports from the US soared 169.1% over the previous year. Australia was the second largest scrap exporter to Indonesia with total exports going higher by 49.1% y/y to 265,000 tons. In third place was Singapore with total exports of 171,000, up 62.6% year-on-year. However, scrap imports by the country declined sharply during the second half of the year.
The Indonesian scrap imports during the month of December ’13 alone totaled 164,000 tons. The scrap imports during the month plunged by 36.8% when compared with the imports during same month the previous year.
Author: Paul Ploumis