LME prices fell below $2,100/t on 9 November. The SHFE cash price has also fallen sharply in recent days and is now trading around RMB 15,520/t. The market’s expectations of production cuts during the Chinese winter season for environmental reasons has dimmed in recent weeks, and this has seen prices drop in China. Market expectations were probably over inflated, and CRU’s estimated cut of 839,000 tonnes of primary aluminium from winter closures between November 2017 and March 2018 remains unchanged. Moreover, cuts across the alumina and carbon products sectors will be more severe in equivalent aluminium terms. Another factor weighing down on the market is the fact that Chinese demand in construction markets is slowing also (partly due to winter related cuts in activity) and the reported stock level has hit a record level of 1.66 million tonnes. However, stocks should decline over the rest of the year if aluminiumproducers implement winter cuts as required by the government.
Fundamentally, the market will move back into surplus in Q1 in China as production always exceeds demand during this period, as end-use activity is curtailed by the Chinese new year holiday period. However, the surplus in Q1 2018 should be a lot less than this year due to the production cuts. The market will be watching stock levels keenly to see if this is the case. Producer margins are also getting squeezed as raw material prices have been rising significantly of late. Smelters are facing increases in costs as they see the impact of the sharp rises in alumina prices and in calcined petroleum coke, coal tar pitch and anode prices.
Aluminum Highlights
Week Ending: November 10, 2017An update on industry activity and economic indicators
Market ViewBy: Paul Williams, Head of Aluminium – CRU Analysis
The views expressed in the “Market View” are those of the author and do not necessarily represent the views of the Aluminum Association
The Aluminum Association has released the 2017 version of Aluminum in Green Buildings – A Guide to Environmental Declarations. The updated Guidelines detail how life cycle assessments (LCA) and environmental product declarations (EPD) are awarded for green building credits in major rating systems, and what architects and designers can do to meet the requirements.
The Guidelines, reflect the latest development of environmental declaration requirements in major green building codes and rating systems, including: LEED v4; Green Globes 2013; IgCC 2012; and CALGreen 2010/2012.
New Building Guidelines Prove the Aluminum Advantage
November 8 – Aluminum imports of ingot, scrap and mill products into the U.S. and Canada (excluding cross-border trade) totaled 720 million pounds in September 2017, up 5.5 percent over the September 2016 total of 683 million pounds. Including scrap, which accounted for roughly 52.7 percent of reported aluminum exports in September, exportstotaled 557 million pounds, down 3.6 percent from a year ago. Excluding scrap, exports totaled 263 million pounds, decreasing 16.4 percent from last year. Exports of scrap increased 11.7 percent year-over-year. Through the first three quarters of 2017, imports were up 25.0 percent to 7,458 million pounds, while exports were up 3.4 percent to 4,754 million pounds.
November 10, 2017
November 9 – The Association’s “Index of Net New Orders of Aluminum Mill Products” for October rose five-tenths of one percent over the previous month. Orders for flat roll products (sheet, plate, can stock and foil) were down 1.3 percent, while orders for extruded products increased 7.2 percent and orders for redraw rod were up 4.7 percent. Compared to October 2016, orders increased 4.6 percent. On average, orders recorded by domestic producers through October 2017 were up 1.4percent over last year.
November 10 – The Aluminum Association, in cooperation with the Aluminium Association of Canada, reported primary aluminum production in North America (U.S. and Canada) was at an annual rate of 3,947,875 tonnes during October 2017, up 5,279 tpy (+0.1%) over the September 2017 rate of 3,942,596 tonnes. The production rate in the U.S. increased two-tenths of one percent m/m, while the Canadian rate rose one-tenth of one percent. Compared to a year ago, the North American annual rate was nine-tenths of one percent below the October 2016 rate of 3,983,591 tonnes. Actual production through October 2017 totaled 3,293,975 tonnes, down 2.1 percent from a year ago.
November 8 – Canadian housing starts increased 1.6 percent in October, to a seasonally adjusted annual rate (SAAR) of 222,771 units according to the Canadian Mortgage and Housing Corporation (CMHC). This followed a decrease of 2.8 percent in September (revised). The six-month moving average (216,770) rose for the ninth time in the last ten months. The SAAR of urban starts increased to 205,935 in October, 2.5 percent above theSeptember rate. Multiple urban starts were up 12.5 percent to 149,593 units, while the single-detached urban starts segment fell to 56,342 units (-17.1%).
November 10, 2017
November 7 – The total number of job openings in the U.S. was essentially unchanged at 6.1 million(0.0%) on the last business day of September according to the U.S. Bureau of Labor Statistics. Manufacturing job openings fell to 425 thousand, down 2.3 percent from August(r), but 30.4 percent above a year ago. Hires in the manufacturing sector declined 7.2 percent from the previous month, but were up 20.2 percent over the level reached a year ago. Total hires in September were an estimated 333 thousand, while separations totaled 323 thousand (+7.3% m/m).
November 9 – According to this week's release by the Federal Reserve Board, the Nominal Broad Dollar Index closed the week at 120.73 on Thursday (due to the observation of Veteran's Day), a decline of three-tenths of one percent from the previous week's close of 121.10. The result is the second consecutive weekly drop in the Index and followed a decrease of two-tenths of one percent the previous week. Over the last six months, the index is down 3.3 percent, while it's off 2.7 percent over the last 12 months.
The nominal broad dollar index is a weighted average of the foreign exchange values of the U.S. dollar against the currencies of a broad group of major U.S. trading partners.
November 10 – On the NYMEX, the near-month WTI crude oil futures (Cushing, OK WTI Future Contract 1) closed the week at $56.74/bbl on Friday, November 10, up $1.10 (2.0%) from last week's close of $55.64/bbl. Weekly oil prices increased for the fifth consecutive week, likely a result of geopolitical worries and continued expectations that members of OPEC and other major producers will extend output curbs when they meet at the end of the month. Active U.S. oil-drilling rigs increased for the second time in three weeks by 9 to 738. Compared to last year, oil rigs have increased by 286. Brent Crude on London's ICE Futures exchange closed the week up at $62.52/bbl (+2.3%). Friday's spread between the two was $6.78/bbl, up from last week's spread of $6.43/bbl.
November 9 – The U.S. Energy Information Administration reported that natural gas spot prices rose at most locations this report week (Wednesday, November 1 to Wednesday, November 8). The Henry Hub spot price rose from $2.64/MMBtu last Wednesday to $3.15/MMBtu.
At the New York Mercantile Exchange (Nymex), the December 2017 contract price rose 28¢ from $2.893/MMBtu last Wednesday to $3.175/MMBtu.
5The Aluminum Association, founded in 1933, works globally to aggressively promote aluminum as the most sustainable and recyclable automotive, packaging and construction material in today’s market. The Association represents North America and foreign-based primary producers of aluminum, aluminum recyclers, producers of semi-fabricated products and foundries as well as suppliers to the industry or distributors or jobbers.
The Aluminum Association's statistical programs provide industry information on primary aluminum production, new orders of mill products, industry shipments, end use market estimates, inventories, recycling and foreign trade on a monthly, quarterly and annual basis. Special surveys provide data on specific subjects such as primary capacity, flat roll capacity, inventories and castings shipments. Custom reports are available on a for-fee basis. Web briefings are also available upon request.
Industry OverviewAluminum Statistical Review (Annual Fact Book)Aluminum Highlights (Weekly)Aluminum Situation (Monthly)Summary of Producer Shipments and Inventories (Monthly)
Primary AluminumPrimary Aluminum Production – U.S. and Canada (Monthly)Primary Installed Capacity (Annual)Shipments of Primary Aluminum by Form (Quarterly)
Mill ProductsIndex of Net New Order Receipts for Aluminum Mill Products (Monthly)Can Stock Shipments (Monthly)Electrical Conductor Shipments (Monthly)Extruded Products Shipments and Press Utilization (Monthly)Flat Roll Capacity (Annual)Foil Shipments (Monthly)Forging and Impacts Shipments (Monthly)Rod, Bar, and Wire Shipments (Monthly)Sheet and Plate Shipments (Monthly)
End UseExtrusion Shipments by End Use (Quarterly)Fin Stock Shipments by End Use (Quarterly)Foil Shipments by End Use (Monthly)Sheet and Plate Shipments by End Use (Quarterly)
RecyclingNew Can Stock (Class) Scrap Receipts (Monthly)Used Beverage Can Reclamation (Annual)
Foreign Trade (based on government customs data)Summary of U.S., Canada and Mexico Imports and Exports (by Commodity), MonthlyForeign Trade Online Database - U.S., Canada and Mexico Exports & Imports of Aluminum (By Commodity, by Country)
For a complete list of statistical publications and reports visit our bookstore.
