Metal prices reach new heights

Metal prices continue to rise significantly. Copper is approaching the USD 7,000 per tonne mark, its highest level since mid-2018, while nickel is climbing above the USD 16,000 per tonne mark for the first time in eleven months. The prices are driven by the good mood, firm stock markets, hopes for the early availability of a vaccine against Covid-19 and the further appreciation of the Chinese Yuan. The latter will lead to consumers in China having more purchasing power. Aluminum, on the other hand, was the only metal to fall yesterday. According to data from the International Aluminium Institute (IAI), global aluminium production in September rose by 4% year-on-year to 5.42 million tonnes or 180.8 thousand tonnes per day. On a daily basis, this is the second largest quantity ever. After the first three quarters, aluminum production is 2% higher than last year and is on a record course. The expansion in September is exclusively attributable to China, while production outside China declined slightly.

The IAI took over the data from the National Statistics Bureau from the beginning of the week. This reported record aluminium production in China (+7.9% year-on-year to 105 thousand tonnes per day). High aluminum prices have encouraged smelters to produce as much material as possible. The Chinese data provider SMM puts the average profit margin of the smelters in China for last week at the equivalent of around USD 275 per tonne. In our opinion, the high production rates should therefore be maintained for the time being. The commissioning of new processing capacities has also contributed to the increase in production. According to the state research institute Antaike, new capacities in the order of several hundred thousand tons have been added. Further capacities are to follow in the coming months. In experts opinion, China is producing well above demand despite the economic recovery and infrastructure measures, so that aluminum exports should soon increase noticeably again.

Source: Commerbank Research, Photo: Fotolia