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Non-ferrous metals - 5 October

Copper, Nickel and alloys, Ingots, White metals, and High-value metals all covered in this week’s non-ferrous report

Copper

Scrap copper prices post modest gains this week, up an average of £50 per tonne with the LME grade “A” cash seller and settlement coming in at £5,165 per tonne. The primary and scrap copper prices experienced a fair level of volatility over the past montth and prices on the LME are already up 8% against September to $8,338 per tonne.

Market anecdotes suggest that the current primary copper prices are still oversold, and the red metal is likely to find support around $8,190 (£5,084) per tonne, while resistance is likely to be above $8,425 (£5,230) per tonne.

Nickel and alloys

On the LME, nickel prices improved during September, up 17% to $18,830 per tonne. Scrap prices are not echoing this sentiment as yet, and merchants are finding it difficult to gauge the current market conditions.

Ingots

For the start of October, aluminium ingot prices remain relatively unchanged, with the exception of grades LM6 and LM24, which are up by £20 and £30 per tonne respectively. Even with the falling price of scrap in general, merchants still feel that aluminium scrap prices are too high against the low prices being paid for aluminium ingots.

Domestic demand remains buoyant from industry stalwarts such as the automotive and aerospace sectors but market conditions remain tough for UK die casters. Merchants warn that domestic ingot prices cannot be sustained for much longer as the losses being endured by some of the UK smelters may eventually drive them out of business.

One merchant commented that a few customers where trying to negotiate prices for the next 12 months at the current prices, which is his opinion was quite unheard of. “How are we expected survive under these conditions?” he asked.

Merchants mentioned that shortages of scrap, in particular aluminium turnings, could start to push certain ingots grade prices back up. Though overall merchants do not expect prices will see much improvement this side of 2013.

White metals

At the start of the month tin prices started to improve, up 11% on August. Prices for 99% tin caught some of the market uplift, which propped prices up by £343 taking them to £11,836 per tonne.

Lead scrap prices remain steady for the week, with no changes to the price of lead batteries.  Traders report that September was a positive period of trading for the lead batteries markets. Buoyed by the recent rises on the LME for primary lead, merchants report that there has been an increase in the volume of lead batteries collected for the time of year.

High value metals

Most of the high value metals have started to recover some of the losses experienced over the past week. Gold bullion is benefitting from the markets uncertainty over Spain’s potential bail out plans, and investors switching their attention from the currency markets, to “safe haven” buying.  

Fine gold is up 0.39p per gramme to £35.38, while 9ct gold posted modest gains to keep its price just under £13 per gramme.

Recently released US automotive sale data showed strong gains on the year and boosted platinum’s price, up £1.08 per gramme to £33.38 per gramme. Platinum scrap prices followed suit, up £0.79 to £24.34 per gramme.

 

Ferrous overview

UK market overview - what you tell us

Local steelworks had not agreed prices for October deliveries at the time of going to press. The tonnage required will almost certainly be the same as in previous months, but traders say that prices will follow the worldwide trend and fall even lower. Sentiment amongst traders is that the scrap ferrous markets is “very depressed” and are hard pressed to see where if any, an upturn in the market will come from. On the docks and wharves, export prices have already slipped by at least £10 per tonne toward the end of last month and with all the UK’s traditional export markets struggling, the outlook looks bleak.

Dockside prices continue easing as exporters struggle to find markets. A spokesperson for one firm said: “Shortages of all grades seems to get a bit worse almost every week, but each week we also get a little less for whatever we sell. With factory collections particularly badly hit and arising’s from demolition sites sparse we have to pay as much as possible to get any heavy steel into the yard, yet when we sell, we find the price has dropped.”

Smaller exporting firms that normally make container shipments are particularly hard hit by a lack of interest from the Far East; but with Spain and Turkey also buying very little, all sectors of the trade are badly affected by the slump.

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