Friday, April 17, 2009
Raw Material Pricing - Party like it's 1999
I was dreamin' when I wrote this
Forgive me if it goes astray
But when I woke up this mornin'
Coulda sworn it was judgment day
As I was doing the research for this article, that tune kept going through my head. The events of the last 6 months do feel more like a dream than reality. Judgment day? We'll talk more about that later in the update series.
Raw materials are a large component of costs for metal stampers. So what has happened to the prices of the most commonly used raw materials?
Metal stampers care most about these input costs:
something to make the steel not rust (usually zinc or nickel)
For Copper, Aluminum, Zinc & Nickel, prices are back down to 2004 levels. In a few cases, even below 2004 levels. See these charts, courtesy of Kitcometals.com
Steel prices are down below 2007 levels.
So it's not 1999, but in a lot of ways, it's 2004 all over again.
What does this mean for stampers? Well, a major input cost has reverted to 5 years ago levels. Is that enough to ensure a return to profitability? Not usually. Stay tuned for the next part of the puzzle.
Tuesday, September 30, 2008
Copper fell in London, heading for the biggest quarterly decline in more than two decades, on concern that worsening financial turmoil will slow global growth and crimp demand for industrial metals.
Copper has lost 25 percent this quarter, the worst performance since at least 1986
Saturday, September 27, 2008
Copper fell to a one-week low after the U.S. government's $700 billion plan to bail out the finance industry faltered and regulators seized lender Washington Mutual Inc., raising concerns that economic growth will stall.
Sunday, June 01, 2008
Industrial metals lead, zinc and tin fell sharply on Thursday, hit by waning demand and rising stockpiles in warehouses.
While zinc is certainly down from recent highs (as much as $2 in December/January 06/7) to "only" a buck now, it was 50 cents 5 years ago. So we still have some adjusting to do to get back to historical levels.
The other metals are the same story. Copper was $4 recently, now it's "only" $3.67. But 5 years ago, less than a buck.
A year ago nickel touched $25 briefly. It's currently $10, but was $5 5 years ago.
Sunday, April 20, 2008
from Yahoo Malaysia
A strike by Chilean mining subcontractors in its fourth day and denting output will keep state-run copper powerhouse Codelco's Andina and Salvador divisions closed through the weekend, the firm said on Saturday.
Thursday, April 03, 2008
Mexico's copper output plunged 49 percent in January from a year earlier because of a strike at Grupo Mexico SAB's Cananea mine, the nation's largest producer.
This past Monday, they reported
Striking miners and other workers scuffled with rocks and sticks at Mexico's largest copper mine, injuring nearly two dozen people, the mine's owners and local media said Sunday.
Grupo Mexico SAB issued a statement urging government authorities to intervene after Saturday's scuffle at the Cananea mine in the northwestern state of Sonora, where strikers tried to block other workers from entering the facility.
Copper is now at $3.90+ and still seems to be headed upwards.
Saturday, March 01, 2008
Chile's state-owned Codelco, the world's largest copper producer, said output fell 6.6 percent last year, the third straight annual drop, because of aging mines and labor protests.
Production dropped to 1.67 million metric tons from 1.78 million tons in 2006, Santiago-based Codelco said in a statement. A strike in June and July curbed output, and the amount of copper in the rock at mines declined.
Global stockpiles of the metal have tumbled this year, and copper prices have climbed 27 percent. Production will rise in 2008 with the opening of a new mine, Codelco Executive President Jose Pablo Arellano said at a news conference.
Friday, January 25, 2008
Maybe, but so far, it's still hanging out in the $3 neighbourhood, a far cry from $2.50 a year ago and $0.80 5 years ago.
Thursday, January 17, 2008
Copper drops, but not as much as you might think (or wish for)
But copper at $3 is a lot better than a year ago, when it was up to $4.
Likewise, zinc is still above "normal" levels, but has subsided recently to a buck (it had been $2 just over a year ago).
Nickel, having been close to $25 a year ago, is down around half that now. For a while, in late 2007, it was actually down under 12
Saturday, December 15, 2007
Since copper is often used in construction, the red metal usually moves with economic news. Traders still considered the Federal Reserve's announcement of a series of measures aimed at addressing the problems in the short-term funding markets, which could boost fuel demand. The moves were made in conjunction with many of the world's other major central banks. The announcement came a day after the Fed announced a quarter-point reduction in its benchmark interest rate, a move that was widely criticized for not giving enough help to the markets.
With concerns over the U.S. economy, copper supplies are at a nine-month high. Data showed inventories monitored by the London Metal Exchange were at 3,675 metric tons, up 193,000 tons, its highest level since the middle of March.
For all that copper goes up slightly and down slightly, it's still awfully expensive in terms of long term trends. Copper is back to where it was a year ago, but still more than 3 times the price it was 5 years ago (about 80 cents US).
International Herald Tribune
The EU began an inquiry into whether Chinese exporters, including Baoshan Iron & Steel and Wuhan Iron & Steel, sell flat-rolled steel in the EU below cost, a practice known as dumping. The inquiry covers €1.2 billion, or $1.7 billion, of imports of hot-dipped metallic-coated steel.
The investigation will determine whether the steel "is being dumped and whether this dumping has caused injury," the European Commission, the executive arm of the EU, said in the Official Journal.
The commission has nine months to decide whether to impose provisional anti-dumping duties for half a year and EU governments have 15 months to decide whether to apply "definitive" levies for five years.
Here's another, similar article, from the Toronto Star, a local (to Toronto) newspaper.
EU officials have warned of a protectionist backlash if China doesn't do more to open up to European exports. They've also asked that Beijing address the valuation of the yuan, which they say gives Chinese exporters an unfair price advantage.
Wednesday, November 14, 2007
Canadian/American currency exchange
The drop in value of the US $ is really starting to hurt us Canadian manufacturers.
On the one hand, it's nice to get your raw materials cheaper. For instance, copper isn't hurting us nearly as much as you might think, since it's basically valued in US $ and we're buying it in Canadian.
On the other hand, exports are a big part of our economy. It's hard to say, even for an individual company, what fraction of sales are exported, because not all are direct exports. Some products, especially small metal parts, the area we're in, get combined with other things by another canadian company before being exported to the US.
But sales to the US are hurting. If we keep the US$ price, we are losing our markup. If we ask for the Canadian price, it varies from one shipment to the next, an unfamiliar situatior for most american customers, who reject the idea. Even if they don't, it prices us out of the market when compared to similarly qualified US suppliers.
It's going to be an intesting ride ...
Saturday, November 03, 2007
Copper continued its recent slide on Friday in U.S. trading. December-stamped copper contracts were at $3,325, down 3.75 cents on the session. The red metal dropped more than 20 cents on the week.
The metal moved lower throughout the week as economic concerns in the U.S. continued. Since the metal is often used by builders in construction, economic growth or lack thereof often moves the copper market. Investors continued to mull the US Federal Reserve's decision to lower its interest rates by 25 basis points to 4.5% on Wednesday.
Thursday, November 01, 2007
Copper prices fell in Shanghai as global stockpiles kept rising, renewing concern that demand is slowing for the metal used in wires and pipes.
Friday, October 05, 2007
Copper headed for a fourth weekly advance in London as a strike by Peruvian workers cut production and on speculation a report will indicate economic growth in the U.S., the second-largest user of the metal. Lead gained to a record. A three-day strike by workers at a smelter and two mines owned by Southern Copper Corp. in Peru reduced output by 10 percent, Chief Executive Officer Oscar Gonzalez Rocha said yesterday.
The Motley Fool had this humorous comment. The effect for metal stampers, if they're correct, is more price increases in copper.
So here's the latest metal muddle. Workers at three of Southern Copper's (NYSE: PCU) Mexican mines have been on strike since the end of July. Wednesday, their Peruvian brethren struck for the third time this year. This isn't a knock on Southern Copper specifically. Dozens of Peruvian mining unions have agreed to a national strike beginning Nov. 5. Thus, these miner grievances are anything but minor.
Production outages, of course, support the price of copper as stockpiles fall. So it's a great time to own a copper producer, so long as its operations aren't being disrupted.
Wednesday, July 11, 2007
At the end of May, there were reports of a fall in copper prices.
Well, yes and no.
Copper hit a high of about $3.75 US at the beginning of May, fell to a low of $3.20 in early June, but is as I write is back up to almost $3.60.
Other materials: zinc got up to $1.85 in the early days of May but is down to $1.55 at the moment.
Brass is an alloy of zinc and copper, so the price of brass will be a blend of the copper and zinc prices.
Nickel (the major component at the moment for stainless steel surcharges) has dropped from $24 in early May to a little over $15 now. However, I haven't seen the prices change much yet, probably because the service centers still have stock at the old prices. Hopefully that will change soon.
Saturday, May 26, 2007
Copper may fall next week on speculation that demand will slow in China, the largest buyer of the metal, following a surge in imports in the first quarter.
copper rebounded on Friday, but analysts think the overall trend of rising copper stocks and lower demand over coming months could pressure prices down further.
Copper futures shed 2.3%
Copper futures in Shanghai fell by [...] nearly 4 percent, by midday on Friday before closing [...] down 2.3 percent from the previous close, because of growing investors' concern about rising stocks of the industrial metal in China.
Friday, May 11, 2007
Copper headed for its largest weekly decline in three months in London on speculation that demand growth will slow in China, the world's biggest user. Nickel and zinc rose.
China's copper imports probably slowed in April, said analysts including Kevin Norrish at Barclays Capital.
``The Chinese market is suffering temporary indigestion after the amount of material delivered into Shanghai in the first quarter,'' Norrish said today by phone from London. ``Some people expected them to buy this week when they returned to the market after the holiday, but that hasn't happened.''
Sunday, April 15, 2007
Zinc has now fallen from the $2 US/lb that it was late last year to about $1.50 US now. However, many platers buy zinc on contract, and so until their contracts run out, higher prices will prevail. By comparison, zinc was $0.50 in June of '05
Copper is again on the rise. It got down as far as $2.50 in February, but is up around $3.30 now. A year ago it was $4.00, so it's a bit off the peak, but not enough to feel comfortable.
Nickel is climbing and shows no sign of stopping. It's currently about $22.75, up from $16 at the year boundary, from $8 a year ago, and $3 five years ago.
Zinc is used in almost every method of rust-proofing steel (except stainless steel). Nickel is used in stainless steel. Brass is a combination of zinc and copper.
Saturday, April 14, 2007
Copper prices rose in New York, extending a six-week rally that is the longest since May, on speculation that supplies will be disrupted at mines in Indonesia and Argentina.
Workers at the Grasberg mine in Indonesia plan a ``rally'' starting April 18 that will last until owner Freeport-McMoRan Copper & Gold Inc. agrees to raise wages, said Frans Pigome, who heads the local group behind the action. In Argentina, Xstrata Plc delayed some copper shipments after a flood disrupted rail services. Prices have risen 47 percent in the past 10 weeks.
The disruption of supply ``only adds fuel to the bullish fire,'' said Jim Wyckoff, senior markets analyst at TradingEducation.com in Wesley Chapel, Florida. ``The market is technically and fundamentally bullish.''
WEIRTON -- More than 1,100 Independent Steel Union Members have joined the ranks of The United Steelworkers.
The ISU formed in 1951 and now, 56 years later, after increased competition from foreign steel companies on the U.S. steel industry, the once massive union was forced to dissolve.
Saturday, March 24, 2007
Zinc, having hit $2, is down to $1.45, but there was a short run up a few weeks ago.
Nickel, which was $3 5 years ago, is now $22, more than 5 times the price of 5 years ago and shows no sign of slowing down.
You can see the historical charts yourself here: Copper, Zinc & Nickel
all courtesy of Kitco Metals.
Sunday, March 18, 2007
Philippine copper output is expected to rise 85% this year and gold output by 16% due to the opening of new mines funded by foreigners, Environment Secretary Angelo Reyes said yesterday.
“Our projections show that, indeed, the Philippine mining industry is facing a major take-off in the next two to three years as five of the world’s largest mining players are now in the country doing exploration and mining development,” Reyes told Reuters in an e-mail, in response to questions.
Tuesday, March 06, 2007
Scotia Capital metals analyst Onno Rutter Sunday said the quality of future copper projects is generally lower than currently producing copper mines, noting lower grades and the remote locations in politically unstable areas.
In a presentation to the Prospectors and Developers Association Conference in Toronto, Rutter said the project pipeline for copper “appears barely adequate to supply the market.”
But the timeframe is fairly long ...
Scotia forecasts an annual global copper demand growth rate ranging from 3.7% to 4.6% until 2010. Meanwhile, despite some direct predictions, Rutter insisted that copper reserves are not running out any time soon, estimating that 28 years of copper supply is still available in proven and probable reserves.
Rutter asserted that the world remains in a copper supercycle where inventories remain low by historic standards, and price volatility is expected to remain high over the next four years.
Meanwhile, Rutter speculated that long-term copper demand may be impacted by what he called irreversible substitution.
Nickel and copper led a global slump in commodities Monday as tumbling share prices stoked concern that slowing Chinese and U.S. economic growth would curb demand for raw materials.
Nickel fell 3.7 percent, its biggest drop in a month, after stockpiles rose for a fourth consecutive session. Copper dropped 3 percent and oil fell almost 2 percent. Commodities climbed to record levels in May before ending lower last year.
Thursday, March 01, 2007
Copper prices fell the most in more than three weeks on the London Metal Exchange and zinc posted the largest drop since Feb. 2, after U.S. new-home sales and manufacturing data indicated a further slowdown in metals usage.
Sunday, February 25, 2007
Production at the Kamoto mine is scheduled to begin late this year and according to the company, once fully operational, the mine will produce 150,000 tonnes of copper and 5, 000 tonnes of cobalt per annum at one of the world’s lowest operating costs.
A new source of copper would be a handy thing 'round about now, what with copper prices still way above "normal" and once again on the rise.
Metal stampers need stable resource prices in order to make good purchasing decisions. This up and down stuff is nuts. Makers of small parts especially have no market clout with the suppliers and must accept whatever the going price is. Which can make or break profits for small part stampers.
Friday, February 23, 2007
London Metal Exchange copper traded on Friday at its highest since Jan. 2
Thursday, February 08, 2007
Copper prices have fallen 15 percent so far in 2007 and are down almost 40 percent from May's record $8,800-a-tonne high.
Traders said many of the funds had or were about to leave the base metals complex to return to their core activities such as equities, bonds and currencies.
'The game has changed completely...base metals are no longer the apple in the eye of the funds,' the trader said.
Saturday, February 03, 2007
Zinc plunged the most in nine years and copper dropped to a 10-month low, fueled by a report of losses by metals-trading hedge fund Red Kite Management Ltd.
Saturday, January 27, 2007
What motivated China to spend a colossal $3.7 billion on the Tibet railway? At least one of the secret reasons has now tumbled out. Chinese geologists have disclosed having found 16 large copper, lead, zinc, iron ore and, possibly, crude oil deposits along the Qinghai-Tibet railway. The deposits promise to reduce China’s dependence on minerals from several countries, including India.
Critics had questioned China’s claim that development of Tibet was the sole purpose behind the investment, which is not likely to be realised through income from passenger traffic. Some of the reasons cited were Beijing’s need to integrate Tibet with the Chinese mainland and improve military capabilities along the Himalayan border touching India, Nepal and Myanmar.
The deposits are expected to yield 18 million tonnes of copper and 10 million tonnes of lead and zinc, Meng Xianlai, director of the China Geological Survey, has announced. China is starved of mineral resources to feed its burgeoning industry and spends several billion dollars a year on imports.
A penny costs about 1.73 cents these days, with the metals used, zinc and copper, accounting for 1.12 cents of production costs.
According to the latest U.S. Mint figures, a nickel costs the government 8.34 cents to make. The cost of the metals - copper and nickel - account for 6.99 cents.
Spurred to cogitation, a noted economist has just floated the idea of making pennies worth 5 cents, and ceasing production of nickels altogether.
A potential shortage of coins in the United States could mean all those pennies in your piggy bank could be worth five times their current value soon, says an economist at the Federal Reserve Bank of Chicago.
Sharply rising prices of metals such as copper and nickel have meant the face value of pennies and nickels are worth less than the material that they are made of, increasing the risk that speculators could melt the coins and sell them for a profit.
Such a risk spurred the U.S. Mint last month to issue regulations limiting melting and exporting of the coins.
Friday, December 29, 2006
But I think this heist takes the cake, at least at the moment.
In a season of scrap-metal heists, police here may have found the boldest: The theft of $200,000 worth of copper in broad daylight that required a semi-truck to haul away.
The owners of the scrap, Allen Park-based Danou Enterprises, this week posted a $10,000 reward for information leading to the arrest of bandits who stole a 40-yard, 15-ton roll-off box of copper wire Dec. 22 from a demolition site
Thursday, December 28, 2006
Copper demand in China, the world's largest consumer of the metal, is likely to fall seven percent this year
Friday, December 22, 2006
Copper hit an eight-month low on Thursday as a build-up in stocks and worries about a slowdown in demand weighed on the market.
Copper dropped decisively below $3 US as I was battling my cold this week, closing Thursday at $2.878 US.
Zinc also dropped, perhaps in sympathy, in the last few days, but nowhere near as impressively - it's still close to record high levels.
Nickel doesn't seem to be dropping at all.
Just so's you know:
Zinc is used in electroplating and also in pre-galvanized steel stock. So basically, if you want your steel to not rust, one way or the other, you'll need zinc.
If your parts' made of brass, that's copper and zinc.
If your parts' made of stainless steel, a major price factor is nickel.
Wednesday, December 13, 2006
Copper prices fell in New York as U.S. inventories of the metal rose to an eight-month high.
[...] Global stockpiles will continue to rise as production is forecast to increase 5.3 percent next year, creating a surplus of 404,000 tons [...]
'Copper is trading lower because of higher inventories,' said John Gross, director of metals management at Scott Brass Inc. in Cranston, R.I. 'The market is also seasonally softer.'
Tuesday, December 05, 2006
Copper declined in London on speculation that growth in demand in China, the world's largest user of the metal, will keep slowing, creating a supply glut.
Sunday, November 05, 2006
Syracuse Police are trying to figure out who stole 9,000 feet of copper wire from an underground conduit that runs from West Kirkpatrick Street to Hiawatha Boulevard. A National Grid employee told police the person or people who did it, has some knowledge of wiring.
David Hess, a National Grid employee, told police that sometime between October 27 and November 2, someone took the wire. Hess told police National Grid only learned about the theft when contractors went to install street lights.
The copper wire is valued at one dollar per foot, making the value of the entire theft $9,000.
Pole toppled in copper-theft try
Police said they foiled a copper theft early yesterday after a 47-year-old Honolulu man chopped down a utility pole and attempted to rip wire from a transformer
Since May, copper thieves have caused an estimated $300,000 in damage to state freeways along the central and west O'ahu corridor
Pittsburgh Man Arrested In Copper Wire Thefts
And just to show how much the change in economics is changing everything else surrounding it,
Former Oneida Limited Knife Plant To Make Copper Wire, 50 New Jobs
A company with several facilities already in Central New York will turn the former Oneida Limited knife plant in Kenwood into a copper wire manufacturing plant.
Mining firms in fight over mill
Two mining companies are battling over a massive shuttered copper mill near Tucson that holds the key to development plans for both.
The mill is central to a $128 million planned expansion of Mercator Minerals' Mineral Park copper mine near Kingman and to increased production at Asarco's Mission mine in Sahuarita, 18 miles south of Tucson.
Both companies claim ownership of the 30-year-old mill and have asked the courts to decide who gets to keep the hulking steel-and-iron plant.
Toronto-based Mercator Minerals Ltd. has a sales receipt, but Tucson's Asarco LLC has the mill, which is mothballed on its Mission property.
All this, mind you, on one day. A Sunday, at that!
Thursday, October 12, 2006
The London Metal Exchange, the world's largest marketplace for aluminum and copper, said it found no evidence that copper's price gains were artificially buoyed by speculation.
And yet ... that's not really what he was quoted as saying.
Not a shred of evidence has been presented
Gains in copper were from demand and supply in the market, ``not by any mischief on the LME,'' Brydon said.
No evidence presented is not the same as it didn't happen.
And "no mischief at the LME" is not the same as speculation played no role in the runup in prices.
So I found this a very strange article, leaving more questions than answers.
Wednesday, October 04, 2006
Copper in New York tumbled more than 4 percent to the lowest in three months on speculation a slowdown in the U.S. economy may reduce demand for industrial metals.
The price of copper is down 19 percent from a record $4.04 a pound in mid-May. U.S. manufacturing expanded less than analysts estimated in September and spending on home construction dropped for a fifth straight month in August, reports showed yesterday.
Wednesday, September 20, 2006
Copper fell in London to the lowest in four weeks, leading declines in other industrial metals on speculation U.S. demand may be slowing.
Just for a glance, here is 30 day copper pricing.
It was almost $4 in May, $3.65 at the start of September, and it's 3.39 right now.
Sunday, September 17, 2006
Electrical work has fewer options - copper is the only good option with aluminum a second choice for low duty, low power use only - but you keep reading about copper being stolen from job sites. I just had some minor electrical work done in our factory, and the electrician was telling me the price of BX cable has quadrupled in the last 2 years.
The Enid News and Eagle, Enid, OK
“Copper has tripled in price and its life expectancy is 40 years,” Jay Benge said.
The new plastics have longer life expectancies, can stand up to stress levels, such as cold temperatures, and allow for more flexibility, which Gearhart pointed out in an upstairs bath. They cost less, also.
And, that cost also translates into labor savings. The flex in a durable plastic pipe can save for suturing and other fitting tasks, Gearhart said.
“It’s a commodity shortage,” he said about why builders are looking at other alternative materials for copper.
Saturday, September 09, 2006
Copper led declines on the London Metal Exchange on speculation that demand will drop because of a slowdown in the housing market in the U.S., the world's second- largest user of the metal.
On the other hand,
Chile hard-pressed to avert more copper strikes
Yahoo! Asia News
Chile's government would likely pay a high political price if negotiators fail to cut a deal with thousands of union workers at state-owned Codelco, the world's largest copper-producing company.
Codelco faces contract negotiations at three divisions before the end of the year, and must reach deals with some 7,000 workers to avert a strike.
A work stoppage by the biggest union in the country could rattle confidence in the center-left administration of Chile's first woman president, Michelle Bachelet.
Saturday, September 02, 2006
A few of the words in the article need explanation. This article is written for a local audeince in Indiana. People who live in Indiana are called Hoosiers.
The Indianapolis Star
Indiana manufacturers are getting pinched as the cost of the basic ingredients of their products -- steel, aluminum, nickel, copper and other commodities -- have soared.
Auto supplier BorgWarner spent an extra $12 million in the first half of the year because of higher commodity prices, with aluminum contributing the biggest increases. Spot prices for aluminum, which BorgWarner uses to cast transmission parts, have shot up 32 percent in the last year.
So far, Hoosier consumers haven't taken a big hit from these higher commodity prices yet. That's because manufacturers have been able to offset some of the three-year price run-up with cuts elsewhere.
But such cuts often translate to fewer jobs and sometimes lower wages for Hoosier laborers.
Higher commodity prices are hitting the auto industry particularly hard. Because sales competition is so fierce between automakers, they will brook no price increases from their suppliers. So as commodity costs rise, the 90,000 Hoosiers employed at auto companies are under increasing pressure.
Among employees, BorgWarner has cut out overtime for some, asked for wage concessions from others, left vacant spots open and even laid off some workers. In Muncie, BorgWarner announced 76 layoffs last week. It employs more than 800 there making transfer cases.
Friday, September 01, 2006
Chilean miners voted to end their 25-day-old strike for higher pay at La Escondida, the world's largest copper mine, a top union official announced.
In a secret ballot that lasted more than six hours, the workers accepted the union leaders' contract agreement with the executives of the mine[...].
On a 1,607-121 vote, with one blank ballot, workers agreed to return to work, Pedro Marin, the union secretary and spokesman, said.
The new contract will be signed Friday and provides for a five percent wage increase and a 16,600-dollar signing bonus for the 2,052 miners.
Wednesday, August 30, 2006
The Summer of Labour Discontent
We have this oddity from Steel Dynamics. As the guy asks at the end of the quote, why negotiate a deal and then don't endorse it?
Fort Wayne Journal Gazette
No deal for Steel Dynamics
Steel Dynamics Inc.’s only unionized workers are on strike after voting down a tentative agreement reached between the company and union negotiators.
The 435 hourly employees at Steel of West Virginia Inc. walked off the job at 11 p.m. Friday after voting earlier in the day on the contract offer, which was not endorsed by their bargaining committee.
Steel Dynamics noted the strike in a news release Tuesday about its plans to buy back up to 5 million shares of its stock. The company said it does not expect the strike to have “a material impact” on overall financial performance.
Fred Warner, Steel Dynamics spokesman, described the lack of support as “kind of strange.”
“Why wouldn’t you recommend something you tentatively agreed to?” he asked Tuesday.
Meanwhile, no one seems to have a good handle on the Chilean copper strike. On the 29th, Bloomberg said Copper prices fell Tuesday amid speculation that a strike at BHP Billiton's mine in Chile soon would be resolved. Only one day later, they opined Copper gained in London on speculation that workers will keep striking at Escondida.
As Chicago (Transit Authority - the band, not the public transit provider) asked, Does Anybody Really Know What Time It Is?
And now, AK Steel. Locked out for more than 4 months now, here's a new twist. From an article from the beginning of this month, AK sued by provider of replacement workers. Meanwhile, AK recently dropped its suit against retirees opposing changes to their benefits. . And they raised transaction prices for all of its stainless hot-rolled sheet and strip products, and continuous mill plate products by about 10 percent, effective Sept. 3.
Monday, August 21, 2006
As a result, copper prices are up again, 1.5% on the day alone so far.
The thing is, the union wants a share of these current prices. But these prices are artificial and not sustainable. So if they lock in their wages at this artificially high price, the mines will lose money when prices drop again. How is anyone served by that? I don't get it.
Reuters via CNN.com
Striking workers at Chile's Escondida, the world's largest copper mine, have rejected fresh salary and benefit offers in a surprise vote that came after a week of hard negotiations.
'It (the offer) was just rejected unanimously in the assembly, halfway through the presentation,' union secretary Pedro Marin told Reuters late Sunday local time in Antofagasta, the mining town that serves Escondida and a host of other mines owned by multinational companies.
Saturday, August 19, 2006
SANTIAGO (AFP) - The Chilean government stepped into an escalating labor dispute at the world's biggest copper mine after its operator, Anglo-Australian resources giant BHP Billiton, shut operations and broke off negotiations with striking unionized workers.
BHP Billiton said it had been forced to close the Escondida Mine in northern Chile because of safety concerns over actions taken by striking workers and would pursue legal actions against union workers who blocked access roads to the mine.
"This is illegal pressure," Pedro Marin, a spokesman for the striking miners, told AFP. He accused BHP Billiton of trying to "scare" workers.
With the crippling strike in its 12th day and negotiations ended, President Michelle Bachelet stepped into the breach, naming Labor Minister Osvaldo Andrade to mediate in the dispute.
Friday, August 18, 2006
Anglo-Australian resources giant BHP Billiton has closed its operations at the world's biggest copper mine in Chile and ended negotiations with striking workers, the company said.
BHP would take legal action against union workers who had blocked all access roads to the Escondida mine in Chile's Atacama Desert, a spokeswoman said.
"This heightened union activity means we no longer feel that we are able to unequivocably guarantee the health and safety of our people or the integrity of the operations, infrastructure," said spokeswoman Emma Meade.
"As a result, Minera Escondida has today closed its operations and ceased negotiations with the union. We will not negotiate with the union while they are carrying out this illegal activity.
"We will be taking legal action against the union to resolve this.
Saturday, August 05, 2006
Workers at the world's biggest copper mine in Chile threatened to go on strike next week after the collapse of salary negotiations.
The work stoppage [...] will start Monday if management fails to make a new offer to the miners, said the union representing 2,000 workers.
In its last offer Wednesday, the company proposed a three percent salary increase and a 15,000 dollar bonus to each miner, but the union rejected it as an "insult."
The miners are asking for a 13-percent salary increase and a 30,000 dollar bonus, as the price of copper has nearly quadrupled over the last three years.
Mina Escondida produces eight percent of the world's copper.
Wednesday, August 02, 2006
Copper prices rose as labor disputes and supply disruptions in Chile curb production amid growing demand for the metal used in wiring and plumbing.
Copper gained 78 percent this year, partly because of strikes and production glitches in countries including Mexico, Chile and Indonesia. A looming stoppage at Escondida, the world's biggest copper mine, may limit supply. Production at Codelco's Chuquicamata mine was cut by a July 23 rockslide.
``Those are the two biggest open pit mines in the world, so everyone's watching them,'' said Herwig Schmidt, a London-based trader at Triland Metals Ltd.
Monday, July 31, 2006
Material substitution is always an option for a stamper, but it usually takes a lot of work with the customer designer and the supplier to negotiate a change in raw material. Not something one does lightly, but occasionally necessary when material prices go through the roof.
I know I've pointed this out before, but it was months ago ... it's worth mentioning again. I run a small metal stamping shop. We use slide forming machines to get our stamping done. Slide forming machines are more sparing of expensive materials because they, as a general rule, don't use a carrier strip to get their work done. So there's less scrap. To check out slideforming some more, follow this slideforming link.
MEPS - Stainless Steel Review
Nickel prices have retreated somewhat from the record high they reached earlier this month. Although the price drew back from crossing the $US30,000 per tonne mark, it remains at over $US27,000 (cash buyer price) at the time of writing. Such elevated prices are causing increasing concern to stainless producers and their customers.
As a result of nickelâ€™s price surge, stainless mills have already announced increased alloy surcharges for August sales. In Europe and North America, surcharges for type 304 flat products have almost doubled since January, and they seem certain to rise again in September. Along with hikes in basis figures, this has propelled transaction values for many nickel-bearing grades to record highs.
Therefore it is not surprising that users of austenitic grades are casting around for alternatives and examining whether they could cut costs by switching to other materials. Stainless producers say they have not witnessed much substitution so far. This is partly because the price of many replacement materials has also gone up significantly.
Among stainless steelâ€™s rivals, copper prices have risen by almost 60 percent so far this year and also stand at record high levels. Galvanized steel sheet prices are currently about 40 percent above those of January, largely because of a 52 percent increase in the price of zinc.
Perhaps the most attractive alternative to stainless is aluminium, where the London Metal Exchange price in late July was a mere 3 percent up on its January figure.
They may be playing it down, but it is clear that some mills are concerned about long-term loss of market share. Stainless producers themselves are offering their customers a range of alternatives in an effort to prevent business being lost to non-ferrous or carbon steel materials. Such options include lower-nickel duplex grades and ferritic types. In the meantime, nickelâ€™s fluctuations will continue to create problems for the stainless industry worldwide.
Wednesday, July 05, 2006
Copper rose in London amid optimism that a possible pause in U.S. interest rate increases may help boost demand for metals. Nickel and zinc also advanced.
Nickel is used extensively in Stainless Steel. Some chinese produces of SS are cutting back. That may help in a while. The article contains more details.
Wednesday, June 28, 2006
LEADING mining company directors have expressed concern about the level of speculative investment that has fuelled the copper priceâ€™s bull run, as new industry research raised doubts about Chinaâ€™s appetite for the red metal.
The FTSE 100 directors, who asked not to be named, said that they questioned the sustainability of the high copper price â€” which remains about 80 per cent up on last yearâ€™s level despite having shed almost $2,000 (ÂŁ1,100) a tonne over the past month.
Tuesday, June 27, 2006
Canadian mining companies Inco Ltd. and Falconbridge Ltd. have reached a three-way deal to merge with Phelps Dodge Corp. of Arizona in what would be the biggest takeover in Canadian corporate history.
The companies said Monday the union would create the world's largest nickel producer and largest publicly traded copper producer.
The new company will be named Phelps Dodge Inco Corp. Its corporate office and copper division will be headquartered in Phoenix, while Inco Nickel, the new company's nickel division, will be based in Toronto.
Monday, June 05, 2006
BHP Billiton, the biggest mining company, spends 61 cents to produce a pound of copper and sells it for $3.15.
The market's largest-ever profit margin is evidence that copper is headed for a record plunge, perhaps as much as 25 percent in a day, said an analyst, John Tumazos of Prudential Equity Group LLP. Copper doubled in the past year on betting by speculators, he said.
After a fivefold increase since 2001 to a record level in May, copper fell 11 percent in one week, the most ever, a sign that the rally might be over. The volatility of copper - the rate at which the price moves up or down - during the past 10 weeks was at the highest level in history, according to data compiled by Bloomberg. Prices fluctuated by 48.5 percent in the week ended May 26
Tuesday, May 30, 2006
Thieves pried away sections of copper roofs, gutters and wiring from four Quebec City churches over several nights last week, the latest in a string of bizarre thefts across Canada linked to high metal prices, police told AFP.
The heists, described as the boldest so far, follow thefts of aluminum ladders and soccer goal posts in Vancouver, manhole covers in Montreal and trucks filled with scrap metal en route to foundries in Toronto, police said.
Emboldened thieves have stripped unfinished new homes of their copper piping, stolen park light fixtures, and even wires from hydro and cable companies.
Tuesday, May 23, 2006
Unorthodox uses of Aluminum
So, for instance, all of my customers who are publicly traded, and even the bigger ones that are not, I list with this service. I find things out that otherwise it might be months until I learned if this little eagle eyed robot wasn't keeping an eye peeled for me.
I also have it scan for words of import to metal stamping in general, like copper, steel and aluminum. This occasionally has some amusing side effects - I learn about every (English language) production of Steel Magnolias in existance, and every theft of copper wire (now that copper has become so expensive).
The troller picked up these articles this morning about Aluminum. They only peripherally involve Aluminum, but of course the troller is a very simple beast - it's not analyzing the content, only running a text search. I have no doubt that in 5 years AI will read the stories and figure out if Aluminum is a major factor in the story, and then I'll stop getting these.
In the mean time, what a comment on our society!
Troubled congressman keeps his cool / FBI says Louisiana lawmaker on film with $100,000 bribe:
It takes a particular kind of nerve to be filmed taking $100,000 in alleged bribe money out of an FBI informant's car, have the FBI later find the very same money wrapped in aluminum foil in your freezer -- and then adamantly claim that you have done nothing wrong.
I'd say it does.
Other people had amusing things to say about the scandal.
In an article in the Baltimore Sun with the byline Democrats have criticized GOP ethics, but now face fallout from Jefferson case
"Why the freezer? Why not the mattress?" asked Lara Brown, a political scientist
Jefferson's troubles are "a throwback to the kind of corruption one would have expected in the '40s and '50s," said Larry Sabato, a University of Virginia political scientist
But another historian said
"I don't remember anything along the lines of money in the freezer," said Don Ritchie, a Senate historian. "We've been calling them 'frozen assets' around here."
On a more serious note, another big use for Aluminum in recent years has been to bludgeon your neighbour with an Aluminum baseball bat. This is only one of about 5 stories like this I've heard.
Hate Crime Trial Begins for Man Accused of Baseball Bat Bludgeoning
from the New York Sun
The defendant, Nicholas Minucci, 19, is charged with assaulting Glenn Moore, 23, with a 34-inch aluminum Louisville Slugger in the early morning hours of June 29. [the trial opened with ...] prosecutors describing the attack as unprovoked racial violence and the defense depicting it as community policing.
Community policing. What an interesting turn of phrase.
If you're interested in the man behind the Aluminum, google him
For an insight into why Aluminum prices are so high, check out the astonishing number of assaults with Aluminum baseball bats. According to Google, about 102,000 articles.
You know, every time they take a bat into evidence lockup, it reduces the amount of free Aluminum left in the world for metal stamping ...
Monday, May 22, 2006
Copper and aluminum futures in Shanghai fell on concerns supply is outpacing demand.
Copper stockpiles rose by almost a fifth last week to a 12- week high, the Shanghai Futures Exchange said May 19. Commodity prices had their biggest weekly drop in more than 25 years in the U.S. and Europe last week, led by metals and grains.
Remember this great link to current copper pricing.
It looks like copper fell as the markets opened in Asia but rose again as the markets opened in New York. At the moment, it's reporting $3.425, up from $3.40 over the weekend.
Thursday, May 18, 2006
Copper and zinc dropped for a second consecutive day in London amid concern rising global interest rates will curb demand for metals.
Copper Consumers Seek More Talks With LME
over record prices for the commodity and the way it's traded on the exchange.
Consumers want to look at the way the LME functions in terms of hedging, price discovery and the physical market, said Simon Payton, the council's secretary general.
Hedge and pension funds have been targeting copper and other commodities, seeking better returns than from stocks and bonds.
No kidding, eh?
This might be a lot of fun for people who love to play their little games with the commodities market, but this is making stamping a living out of brass or copper a total crapshoot. My customers won't accept the price increases I need to get for this stuff. Never mind the fact that I have no other choice ...
``Prices are very bad, very difficult,'' Centner said in an interview yesterday. ``The financing aspect, the working capital issue, is becoming a nightmare. In general the copper business is built on credit.''
About 85 percent of total turnover on the LME may be derived from funds rather than from normal industry business
The LME has said that it strives to provide ``an orderly market'' for metals and would take action if it identified any cases of manipulation. An LME spokesman wasn't available to comment for this article.
"it's difficult to change the rules because it's a free market and they can't forbid funds access to the market."
Tuesday, May 16, 2006
Copper prices fell sharply Monday as traders took profits from recent highs.
The July futures fell as far as $3.4640 per pound in overnight screen trading on the New York Mercantile Exchange, a loss of 40 cents. By Monday morning, however, they had trimmed this loss to 9.4 cents at $3.7700.
There does not appear to be any major metals-specific industry news behind Monday's decline, said Edward Meir, analyst with Man Financial.
"Instead, we think the weakness has been brought about by the increasing alarm expressed in the swooning U.S. equity markets over rising commodity prices and their impact on inflation," he said. "This is a legitimate concern, as rising inflation will keep the Fed on a more hawkish course for much longer, and eventually lead to a slowdown in growth.
In other words, there's no good technical reason having to do with actual mining or consuming of coppoer behind this recent price rise, it's all money speculation.
I don't think stampers are well served when their base metal prices are so fluid.
Saturday, May 13, 2006
Less than a month ago I was writing about how it hit $3 and what a disaster that was.
Copper posted its steepest fall in two weeks today on concerns that the doubling of prices to record highs in the past year may not be justified.
Friday, May 12, 2006
Copper soared above $4 a pound for the first time and nickel and zinc rose to records on signs that higher prices have done nothing to curb demand. Gold climbed to a 26-year high and platinum jumped to the highest ever.
Stockpiles monitored by the London Metal Exchange fell the most in five weeks, as makers of wire and pipe tapped inventory to make up for a shortfall from mines. Strikes and declining ore grades in Mexico and Indonesia have cut copper output this year. Demand will climb 5.7 percent this year after rising 1.8 percent last year, according to Citigroup Inc.
[...] a London-based analyst said. ``Every day I'm stunned as prices keep going up.''
Friday, April 21, 2006
Bloomberg.com: Latin America
Copper headed for a sixth consecutive weekly gain in London, the longest period of rising prices since October, driven by supply disruption and speculation demand growth may accelerate. Nickel rose to the highest since at least 1987.
Production stoppages at Grupo Mexico SA, the world's seventh largest copper producer, continue at its zinc and copper operations. The company said this week it may not be able to deliver the metals to customers in May. Industrial production in China, the world's largest copper consumer, expanded 17.8 percent last month after gaining 20.1 percent in February.
And this, from Reuters, news that some additional capacity might be coming on-stream.
China's Xiangguang Copper Co. Ltd. aims to start production at its new copper plant in early July but has no time table to start work on its planned expansion, company officials said.
And finally, some speculation as to when Copper might fall again - hey, I made a joke - speculation seems to be becoming a factor in the Copper marketplace.
Copper won't defy gravity forever
The blistering rally in copper prices may start to cool later this year as new production finally comes on stream, but most analysts are not expecting a big correction anytime soon.
As miners from Chile to China ramp output to grab a piece of the commodities boom, supplies of copper could begin matching demand later this year and next.
Because of high demand for the industrial metal, thanks to the relatively robust world economy, copper has appeared resistant to any downside risk.
The world's big investment funds, who have no intention of ever taking delivery of the metal, have been piling in to grab big returns for their portfolios, and driving up the prices in the process.
Indeed on Thursday, precious metals suffered a correction with gold sliding 4 percent and silver losing 14 percent. But while copper wobbled, it ended the day only a fraction lower and by Friday was up $54 at the bid price of $6,350 a tonne.
But most market players don't believe copper can defy gravity forever.
Thursday, April 20, 2006
Click on the link to see the charts.
Kitco - Spot Copper Historical Charts and Graphs
Here's some useful information, from Copper Facts
Copper has been mined for over 7,000 years. The Island of Cyprus in the eastern Mediterranean was a major source copper for the ancient world. The word copper originates from the Roman name for Cyprian metal cuprum. The abbreviation of cuprum and the symbol on the Periodic Chart of Elements is Cu.
Copper is one of the oldest metals and has been important throughout the development of civilization. And it continues to play a crucial role in our global economy today. Copper consumption continues to grow -- due in part to its physical properties of high ductility, malleability, thermal and electrical conductivity, and resistance to corrosion. It is a major industrial metal ranking third after iron and aluminum in terms of quantities consumed.
Saturday, April 08, 2006
Copper touched a record peak of $5,830 per ton Friday, edging closer to the magic $6,000 level, as tight global stocks and supply concerns propelled the red metal to new highs.
'A lot of short-term funds have been shifting heavily into gold and other commodities since the start of the new quarter,' said Akira Doi, director at Daiichi Commodities Co. Ltd.
Copper for delivery in three months rose $24 a ton on the London Metal Exchange from Thursday's London close at $5,807 a ton.
Used widely in electronics and construction, copper has risen more than 8 percent this week and 32 percent since the start of the year as inventories have dwindled on soaring demand, especially from China. Strikes by miners around the globe have also hurt deliveries.
CNN money also has a little breadbasket of commodities that, I guess, is updated realtime while the markets are open. They list copper, silver, platinum and gold. Of those, we stamp copper and I don't know anyone who stamps the others. And there are some amusing ones ... did you know pork bellies are worth more per pound than lean hogs? Learn something new every day, I guess.
Friday, April 07, 2006
Copper rose to a record, heading for its biggest weekly gain in more than six years, amid supply disruptions and falling stockpiles. Zinc traded at an all-time high and New York gold futures advanced to a level not seen since January 1981.
Demand for industrial and precious metals is soaring as investment funds increase purchases of commodities whose returns have beaten those on stocks and bonds.
Copper, which is used in wiring and plumbing, has risen 7.8 percent this week, the biggest increase since July 1999, amid a squeeze on supplies.
It's worth pointing out that an expensive marketplace for copper (and related alloys, like brass) makes slide forming all the more attractive. Unlike some other stamping disciplines, slide forming does not use a carrier strip, and so waste material is minimized.
Friday, March 17, 2006
Copper Prices continue to hang out in the high rent district
Monday, February 27, 2006
Copper may fall this week after the Grasberg mine in Indonesia, the world's second biggest for copper, resumed operations following the end of a three-day blockade, easing concern about a shortage of the metal.
Six of 11 traders, analysts and investors polled by Bloomberg on Feb. 23-24 said copper will be little changed and four said it will drop. One forecast a gain.
Operations were stopped at Grasberg on Feb. 22 after villagers demanding to be allowed to sift through ore in the company's waste piles blocked a road leading to the site. The blockade was lifted at 6 p.m. Jakarta time Feb. 25, Freeport spokesman Siddharta Moersjid said in a telephone interview.
``Workers have returned and started the evening shift,'' Moersjid said. ``The blockade was opened voluntarily, and the protesters have given their demands to Freeport and the local administration. We will continue discussing their demands.''
Wednesday, February 22, 2006
Copper rose for a fifth consecutive trading session in London as output was halted at Indonesia's Grasberg, the world's second-largest copper mine.
Grasberg produced 660,000 metric tons of copper in 2005, about 4 percent of global output. Some analysts previously forecast usage will beat output in 2006.
``This is at a time when the copper market can ill afford to lose production,'' John Meyer, a London-based analyst at Numis Securities, said today in an e-mailed report. ``The suspension could cost some 1,800 tons of copper'' each day, Meyer said.
AK Steel said the price hikes take effect April 1 and will be added to the company's current pricing extras for all aluminized carbon and stainless steel products.
Here are some cute update-themselves graphs of aluminum pricing:
Unfortunately, it won't produce cute charts of longer terms, but you can see them by clicking this link.
As you can see from the longer term graphs (follow the link above), aluminum prices have doubled since 2002. This trend, repeated in copper, steel and nickel prices, shows that we can no longer take for granted the plentiful and cheap availability of these metals. The underlying factors in all cases is a wide-scale (delayed) industrial revolution in large areas of what we once called the third world. This has the ability to outstrip mining efforts for these metals and, at least in the short term and perhaps for a good long time to come, will drive up demand and therefore prices.
Now the good news, at least for aluminum, is that recycling is relatively cheap, aluminum is a low-melting point element, but even still, the scrap is worth a small fraction of the original price. Better not to make scrap at all.
In this way, certain less-wasteful processes, like slide forming, will likely become more prominent in the next few years, as the true costs of waste metal becomes increasingly obvious.
Tuesday, February 07, 2006
Dow Jones via Yahoo Asia
Funds sent flagship base metals copper and aluminum to new highs in Asia Tuesday, despite an absence of clear fundamental drivers, participants said.
The London Metal Exchange's benchmark copper contract hit an all-time high of $5,110 a metric ton, the latest in a string of records as speculators and new buy-and-hold investors continue to target metals markets.
By 0520 GMT, LME copper had eased back to $5,085/ton, but is likely to re-challenge the record, heading into London trading hours, traders said.
Monday, January 30, 2006
Copper may rise for a second consecutive week on speculation that funds are still increasing their holdings of the metal on expectations supply will continue to fall short of demand.
Eight out of 12 analysts, traders and investors surveyed by Bloomberg News on Jan. 26 and 27 said the metal will gain. Two expected a decline and two little change. Copper reached a record last week, bringing gains in the past year to 57 percent. Global demand has outpaced supply since 2002.
``The rally is not over yet,'' Francisco Blanch, a commodity strategist of Merrill Lynch & Co. in London, wrote in a Jan. 27 report. Gains in prices will come from ``unforeseen supply disruptions, ongoing bottlenecks at various smelters and critically low inventory levels.''
Thursday, January 19, 2006
Copper is used in everything from automobiles to ordnance. Copper allows electricity to be generated, transported and conducted to the various outlets in a modern home. Copper is also relatively scarce compared to other metals like iron or aluminum that make up a good portion of the earth itself. So copper serves as an excellent metallic bellwether for potential future resource scarcity, according to a group of researchers who compiled data on its extraction, use, recycling and discard to estimate whether there is enough copper available to make a developed standard of living available to all the world's people. The short answer is: no.
While some theorists had predicted that metal use would decline as economies advanced beyond building metallic infrastructure, the teams' data showed that overall copper use in the U.S. climbed to a high of 238 kilograms per person by 1999. Declines in areas like manufacturing and railroads were more than offset by increases in areas like motor vehicles and domestic devices. In fact, residents of Canada, Mexico and the U.S. required an average of 170 kilograms of copper per person. Multiply that by overall population estimates of 10 billion people by 2100 and the world will require 1.7 billion metric tons of copper by that date--more than even the most generous estimate of available resources.
Thursday, January 05, 2006
Prices in the US rose overnight on news of the Codelco strike. Company officials claimed that output had not been hurt by the strike but there was widespread concern in the market over possible disruptions to supply from Codelco which produced 1.84m tonnes of copper in 2004.
Copper's gains rubbed off on aluminium which increased marginally from the seventeen year peak reached on Wednesday. Three-month aluminimum traded at $2,309.5.
Friday, December 30, 2005
Here's news of a potential, slight break in the price rise ...
Copper may decline for a second consecutive day in London as inventories in London Metal Exchange-monitored warehouses rose to a 14-month high.
Inventory climbed 1,825 metric tons, or 2.1 percent, to 89,575 tons, the LME said today. That's the highest since October 2004. Stockpiles have gained 11 percent in two days.
``If further large deliveries are seen then this may well start to address some of the complacency in the market,'' Will Adams, an analyst at Saffron Walden, England-based Basemetals.com, said in a report today.
Forget silver and gold. Copper has been a truly precious metal over the past five years. The price of this ultra-useful base metal has risen from a low of $0.61 a pound in late 2001 to as much as $2.14 a pound this month. That makes the doubling of silver prices and the near-doubling of gold over that same time period look downright chintzy by comparison.
While gold and silver both have their uses, they pale in usefulness in comparison to copper. I don't want to sound like a paid spokesperson of the Copper Council, but this metal is used in everything from wiring and plumbing to motors, circuits, and corrosion-resistant alloys. Given its place in construction and manufacturing activity, it won't be any surprise to hear that China's economic growth has sucked up a lot of the world's copper production in recent years.
Friday, December 02, 2005
Copper rose to a record in London, heading for its seventh week of gains, on signs global economic growth is boosting demand, outpacing supplies from mining companies and scrapyards.
Construction spending in the U.S., the world's No. 2 copper consumer, rose for a fourth straight month in October, while manufacturing growth last month in the 12 nations using the euro was the fastest in more than a year, government and industry reports showed yesterday. Copper demand outpaced global production by 114,000 tons in the first eight months of this year, the Lisbon-based International Copper Study Group said.
Copper rises after China sells reserves at high price
Copper prices rose again on Wednesday after China sold reserves of the metal at a higher price than some traders had estimated, signaling continued strong demand.
In Beijing, the State Reserve Bureau auctioned 14,000 tons of copper on Wednesday at $4,601 to $4,743 per ton.
"People in the Shanghai market were surprised" by the auction prices, said Edward Meir, a commodity analyst. Copper is gaining because of some shortages and good demand, he added.
And something to look forward to:
China To Auction Another 20,000 Tons Of Copper On Dec 7
SRB sold 20,000 tons at the first auction on November 16, and nearly 13,500 tons in the second auction on November 23. In the third auction on November 30 [...] it sold 13,834 tons.
Tuesday, November 29, 2005
Liu Qibing, the Chinese copper trader whose wrong-way bets left his government with an estimated $300 million in losses, scored 90 out of 100 in a course on international investing at Wuhan University.
The son of farmers from the central province of Hubei is now at the center of a scandal that has reverberated from Beijing to London. He's under house arrest and hasn't been heard from since mid-October, a government newspaper reported. Liu, 37, was ``low-profile'' during his college days, says classmate Xiong Shenjie.
The case shows disclosure and risk controls at Chinese agencies haven't kept pace with the economic boom that has made the country the world's biggest copper consumer and No. 2 oil user, analysts and traders say. Liu's losses resulted from his ``personal actions,'' an unidentified government official said in the state-owned China Daily.
``It's hard to imagine Liu could have done what he did 100 percent without the knowledge of his superiors,'' says Gavin Wendt, a commodities analyst at Fat Prophets Fund Management in Sydney. ``There was some form of negligence. The superiors may think they can save face by shifting responsibility to one individual.''
Liu has been under house arrest since mid-October, the Economic Observer, a state-owned newspaper based in the eastern province of Shandong, reported Nov. 21, without citing anyone. Phone calls to the media-relations department of the Public Security Bureau in Beijing, which oversees the police, weren't answered. Liu didn't pick up calls to his mobile-phone and home numbers.
Wednesday, November 23, 2005
You know Cobalt? Artists have a colour they call Cobalt Blue, because Cobalt is an ancient ingredient in some pigments.
Cobalt may just be the new copper. Or aluminum. Or steel. Possessing neither the glamour of precious metals like gold nor the industrial muscle of iron, this silver-white by-product of copper or nickel mining has always been considered a minor element on the world trading markets.
But cobalt is suddenly in vogue, thanks to surging demand for products that contain it. Known since at least 2000 B.C. as a coloring agent that produces a rich blue hue to glass, the metal now is an integral part of orthopedic implants, rechargeable batteries for hybrid cars and cameras, and aircraft engines and armor systems.
Mining companies are responding by stepping up production. Canada's Inco will develop a nickel-cobalt mine in the French Pacific territory of New Caledonia, while U.S. copper giant Phelps Dodge just acquired a controlling stake in a vast copper-cobalt deposit in Democratic Congo.
Monday, November 21, 2005
China is being forced to disclose its holdings of copper for the first time, as the nation seeks to limit losses from a trader's wrong-way bet on a drop in prices.
Saturday, November 19, 2005
Well, keep wondering .... a spate of articles today yield more questions than answers ...
International Herald Tribune
Speculation that China will refuse to deliver up to 200,000 metric tons of copper from its reserves to cover a massive gamble on futures contracts is driving prices to record highs and unsettling the global market for the vital industrial metal.
Copper hit a record $4,160 a metric ton on Thursday before falling back slightly on Friday after Chinese state media reported that Liu Qibing, a futures trader based in Shanghai, had amassed futures contracts on the London Metal Exchange betting that prices would go down. Instead, prices have continued to climb sharply this year on strong demand from China's booming economy and some unexpected supply shortfalls from major producers in Chile and the United States.
If prices remain at their current levels or continue to rise, Liu's trades could lead to losses of $200 million or more, according to some analysts.
'The next step is to see whether they really want to deliver this copper,' said a Shanghai-based market analyst who spoke on condition of anonymity.
Some traders and market analysts have suggested that China may refuse to honor the contracts, which come due on Dec. 21, after Beijing denied that Liu had been working for the government's secretive State Reserves Bureau when he made the trades.
'As far as I know, the loss was a result of his personal actions instead of the government,' the official China Daily newspaper reported Thursday, quoting an unidentified official at the bureau."
These other articles contain similar information, much of it speculative ...
Thursday, October 06, 2005
High oil and natural gas prices continue to ripple through the economy, affecting everything from chemical producers and glass makers to delivery charges, air fares and office rents.
Also in the news today ... a rather sobering explanation of an explosion in 2003 ... aluminum dust, in the right circumstances, can explode. And, more frightening (at least to me, because someone operates one of these just across the parking lot from us), an explosion in an outside dust collector can travel back into the factory.
Dust accumulation blamed in â€™03 blast
According to the report, the aluminum dust ignited in the factoryâ€™s dust collection system. The dust originated in a scrap system at the plant, and a high concentration of the dust, when suspended in air, is extremely combustible.
The plant manufactures cast alloy aluminum wheels, and until the time of the explosion, had dried and melted down scrap metal chips created during its manufacturing process. The dust from the process was separated from the chips and conveyed to dust collectors on the outside of the building, according to the report.
When the dust in the collector exploded, it sent a pressure wave through the systemâ€™s ductwork and back into the building, according to CSB Chairman Carolyn Merritt. A fireball then erupted in the building, which lofted and ignited more aluminum dust that had accumulated on the rafters and equipment, she said.
And copper prices continue to rise ...
Copper prices climbed to a record for the third straight day in New York as global inventories declined, suggesting demand remains high for the metal used in wiring, manufacturing and construction.
Other reasons cited:
short-term supply problems in Canada, the United States and Zambia, as well as falling warehouse stocks, continued to drive the market.
Copper, used in construction and electronics, is on the crest of a wave of buying that has been driven by demand from China, speculative activity and, most recently, supply worries.
In Canada, Falconbridge Ltd. declared force majeure on Tuesday at its Kidd Creek copper-zinc plant in Canada as a strike entered its fourth day.
In Zambia several plants have cut production or closed and more are threatened by energy shortages, although the government has scrapped import duty on fuel in an attempt to keep the copper sector running.
In the United States, Asarco closed its Hayden smelter in Arizona for repairs. The company is already gripped by a 3-1/2-month strike, reducing output by around 20 percent.
Sunday, October 02, 2005
Falconbridge Ltd., Canada's biggest mining company, idled its Ontario copper refinery and zinc plant today after talks with a union on a new contract broke down.
Thursday, September 22, 2005
Copper prices in New York rose to a five-week high as U.S. inventories declined, renewing speculation that demand will exceed supply for the metal used in cars, homes and appliances.
Now, as I understand the article, this was at least partly due to funds buying futures as opposed to "real" demand, i.e. consumption, but the net effect on price for stampers is the same.
Saturday, September 17, 2005
Recycled Steel bigger deal, Free Trade when it's convenient, Copper prices
Schnitzer Steel Industries, Inc. announced today the new creation of the position of President of its Metals Recycling Business.
U.S. Reviewing Duties on Cement, Lumber and Steel
The Bush administration is weighing the possibility of suspending duties on Mexican cement, Canadian lumber and foreign steel in order to aid in the rebuilding of U.S. Gulf Coast cities following Hurricane Katrina.
And there are signs copper prices might have stopped rising ...
Copper Heads for a 2nd Weekly Drop in London as Stockpiles Rise
Copper headed for a second consecutive weekly decline in London after inventory expanded as producers increased output
Tuesday, September 13, 2005
More Katrina Effects
Zinc prices spiked last week on fears that stockpiles of Zinc in New Orleans might be damaged, destroyed or unavailable for a long time. But it seems that (a) much of the stocks are dry (either on high ground or stacked higher than the water reached), (b) water doesn't much bother Zinc, since it's primary application is rust-proofing (c) the Zinc in New Orleans hasn't been all that active anyways for a while, so if it's inaccessable for a while that's OK and (d) even if it's inaccessable, it's not gone.
Interestingly enough (at least from this distance - I might feel differently if I were down there), Zinc is one of the heavy metals they expect to find in abundance in the polluted wastewater from New Orleans. Too bad they can't effectively remove the metals from the polluted waters and reclaim them.
In the aftermath of Hurricane Katrina, preliminary sampling results show high concentrations of fecal coliform bacteria (E. coli) which can be attributed to both point and nonpoint sources. Failing waste water treatment plants, debris, and animal waste or carcasses have contributed to the concentration of bacteria in the receding floodwaters. High organic loads are expected from marshes and forests transporting sediments, nutrients and organic material into the receiving waters. Pesticides from row crop agriculture and highly urbanized areas, as well as oil and grease from submerged parking lots, roads, highways, and driveways will be unusually high. Sediment from construction sites, nutrients from fertilized lawns, and heavy metals (zinc, cadmium, chromium, copper, and lead) are also expected to be sources of pollutants within urbanized areas.
MM, mmm, good.
For more about pollution effects of Katrine (not really related to metal stamping), see this article. Let me leave you with just a few thoughts:
(a) We all live downstream and
(b) The newest fear is radiologicals that might have escaped from hospitals and universities. Say what? People had permits to use radioisotopes in a below-sealevel floodplain area regularly visited by hurricanes and they weren't required to store them in a way that would prevent spreading in a storm? Well, now, isn't that good news.
(c) Like shrimp? Among the first living creatures to be impacted are shrimp Soon the only way to eat shrimp will be in the dark. Avoid the ones that glow.
Hydrogen was a hot topic last week. Air Products, a major hydrogen supplier for cold rolled steel making, warned that it may be unable to supply customers. This week they announced that, by a number of strategies, they've been able to make do. These include converting some customers to gaseous rather than liquid hydrogen and using up excess product in various places in the distribution chain. Some work is being done to partially restart their Sarnia, Ontario facility too. In addition, they have determined that their facility in New Orleans, while currently inaccessable because of water, is largely undamaged and *should* restart without too much hassle when the water is drained away.
Interestingly enough, hydrogen is also used to make computer chips.
The construction trades are worried about availability and cost of steel (especially rebar, I would imagine), cement and gypsum in the wake of the hurricane. For two reasons - it'll be needed to rebuild New Orleans, and shipping of heavy products such as these goes best by boat. With the port of New Orleans out for a while, shipping by ship is going to be disrupted in a major way.
Truth about Trade and Technology says the US should drop their anti-dumping laws on four products, lumber, cement, shrimp and steel, all of which will be needed in the reconstruction (well, maybe not the shrimp). I've been saying this for a while, not just about those 4 products, and not just post-Katrina, but they make a point that now would be an even better time than previously.
The first steel company layoffs because of the hydrogen problems have occurred. And steel company shares are already dropping and earning forecasts revised downward, because of the expectation that recycled scrap steel and other raw materials will be at a premium with so much shipping knocked out.
All in all, an interesting start to the week.
Sunday, August 21, 2005
Summer Time, and the Living is Easy
It's been a slow time, partly because several of the steel bloggers have been on vacation (not just me - Steve was in Turkey) but also, it seems, because everything in steel is just SLOW these days.
I'll do a review in the next few days of what came into my inbox while I was away, but trust me, it wasn't much.
In the mean time, let me take some time to comment on some things I often don't comment on. Other bloggers and other blogs and in some cases some of the material they've been blogging about.
The first thing I've been meaning to address for some time is a criticism that I often post news without much in the way of commentary, and I often post a fair bit of the news item.
Let me say that it's not because I have no opinions. On the contrary - ask anyone who knows me personally. But I believe strongly in separating reporting from commentary. If I can't make it clear which part is my comment, I'd rather put it in a separate entry.
In the beginning, when I started this Blog, it was as much an education for myself as anything else - I was having a hard time making a living in the stamping industry in the face of wildly fluctuating input costs for steel and copper - I'm still having a hard time trying to figure out how to price my products in this environment. I've been in this business now for about 15 years (this is my second career) and we've never seen such wild fluctuations (and such wild political interference making things worse) as the present. So in the beginning I often had no comment ... I didn't know what to make of the news myself.
Now I do know more and can comment, at least semi-intelligently, on most items I report on. However, I still do cut and paste a fair bit of the article. I do this because my primary news source is, well, news items. Unlike much of the internet, these tend to vanish in a few weeks to a few months, depending on the source, leaving the part I quoted as the only extant copy of the reportage. Since my archives have been kept forever (and I have a bit of space to spare on my server) this seemed like a good thing.
You may disagree, either with the reasons or with the result, but that is why I do it the way I do.
Over at the National Association of Manufacturers, their Blog has been giving Lou Dobbs a hard time. Poor guy. Personally, I never watch Lou. I like Larry King and I like Aron Brown, but Lou just doesn't do it for me. So I haven't a clue if NAMs objections to Lou are fair or not. But check them out for yourself if you watch Lou. They have a special section of their Blog called Dobbs Watch.
Oh, they really got a chuckle out of Lou's program being knocked off the air by the latest windows 2000 PnP worm. I'll comment on that later. Lou wasn't the only guy caught with his Plug'n'Play down. Shame on all of them. The warnings signs were there for a week or more.
I did notice, though, that NAM came out heavily in favour of the new judge appointee Judge John Roberts. And they did an interesting set of articles about how he's being put under more scrutiny than previous appointments.
Living in Canada, I don't follow US politics much. One wishes US politics would stay on their own side of the border, but as bill 201 and the Byrd Ammendment proved, sillyness "south of the border" tends to leak across the border into Canada (not to mention handguns and bounty hunters).
However, I have noticed a certain nastyness in American politics in the last 10 years or so, a kind of "dirty tricks", pull-no-punches, forget the fairness, we just have to win kinda thing. Look how hard they went after Clinton, for doing less in the oval office than, we are told, Kennedy or Roosevelt did. I don't know why politics in the US has descended to this level, but it has. It's really seems to gotten to the schoolyard level, the "my father's bigger than your father" and "your mother wears army boots".
It would be laughable if it wasn't so serious. Because it's about real issues, though, we have to put up with it, and describe the indescribable.
It's at times like this that you really realize that English is missing certain important words and concepts. In German, this manner of conducting oneself is called "Sweinerei" - piggishness or piggery. But the connotation is willfull conduct that is totally irresponsible, totally inexcusable and totally outside the boundaries of decent human conduct, even perhaps bordering on corrupt. In Hungarian, the word is the same, just translated - Disznosag (sorry, no accents on this keyboard). It's enough to give pigs a bad name. In English the closest you can come is "dirty tricks", but that's wayyy too tame. "Pork Barrel" is closer, but only applies to, well, pork barrelling. (Postscript - I went for my walk, and realized that there's a closer word in English - skullduggery. But that's still not really bang on. It's closer to the line from Hamlet "Something is rotten in the state of Denmark").
To us here in Canada, most of American politics seems to have devolved to this level now. Not just in appointments to the supreme court, or in silly impeachment proceedings against sitting presidents for whom they were sleeping with, but in everything. The WTO throws out the 14,000th appeal by the US, they re-appeal. Isn't there a point when common decency says the world trade court has said a thousand ways we can't conduct ourselves this way, let's just take our lumps and move on?
Someone needs a Miss Manners for the American political system.
If they were to put as much energy into stopping the flow of guns into Canada as they have put into persuing Clinton over Monica (or whitewater), probably half of the shooting deaths in Toronto this year wouldn't have happened. Now that's a real issue, for the people who live here and the families and relatives of the slain. 25 lives. Where are the priorities?
Now, about that there computer worm.
Among those hit were offices on Capitol Hill, which is in the midst of August recess, and media organizations, including CNN, ABC and The New York Times. Caterpillar Inc., in Peoria, Illinois, reportedly also had problems.
According to WindowsITPRO, companies effected include companies such as ABC, Caterpillar Company, CNN, Daimler Chrysler, The Financial Times, Kraft Foods, The New York Times, The San Francisco International Airport, SBC Communications, United Parcel Service (UPS), and Walt Disney
Were all their IT departments asleep at the switch? The warnings had been there for at least a week!
Maybe they should do what I do. I subscribe to Yahoo News. Years ago they initiated a clipping service called Yahoo Alerts. One of the first phrases I gave it to check on was "Windows 2000". Every day it sends me news about windows 2000. Mostly it's boring, but I get notice of every new worm that's out there as soon as any IT rag that Yahoo scans mentions it. Gives me generally several days to patch my systems. And I'm just a little guy.
Well, that's enough rambling for today. The weather is nice out and I'm going for a walk. Queen sang
I want to ride my bicycle
I want to ride my bike
I want to ride my bicycle
I want to ride it where I like
but I can't because the door to my bicycle locker is jammed and the supers haven't fixed it yet, so I'm walking instead.
Time to go. See ya!
Friday, July 29, 2005
Copper prices broke through the $3,500 a tonne level for the first time ever in nominal terms on Thursday as copper inventories hovered around long-term low levels. The price was also pushed higher on recent US data that suggests that demand for metals may be stronger than expected.
Monday, July 18, 2005
Late breaking news ... Whirlpool will be holding a conference call at 11AM this morning.
[next morning] the Toronto Globe & Mail had this take on the issue:
Whirlpool offer for Maytag seen as bid to block Chinese
Whirlpool Corp. has proposed a $1.35-billion (U.S.) bid for Maytag Corp., a move that will help wring out costs by buying the iconic American brand known for washers -- and keep it out of the hands of a low-cost Chinese rival.
But some observers yesterday suggested Whirlpool's move, which would give it almost 50 per cent of the U.S. appliance market, is a defensive tactic.
Analysts see Whirlpool trying to keep Haier from increasing its share in North America by buying the strong Maytag name and combining it with low-wage manufacturing.
But the best comment is buried in here:
David Silver [an analyst] expects Haier to outbid Whirlpool. "I think it [the winning bid] is going to be upwards to $19 a share.," he said.
"Haier can definitely afford to do so," Mr. Silver said. "They are the largest producer of appliances in China, and the Chinese are not as demanding as American investors in that it doesn't have to be every quarter that they see a profit. They are willing to take a loss in one or two quarters to see a large gain in the future."
It's been said before but bears repeating: the (North) American expectation that a company show profit and issue dividents every quarter does not work well for certain types of very long investment ventures, especially heavy industries like steel (and maybe even some medium industries like big stampers). It makes for decisions which are too short term. Ultimately, investor climates where they think longer term (China, Japan) will have an advantage over North America unless we smarten up.
On the drive in to work today, I heard this on the radio ...
Switzerland-based Xstrata may bid for Toronto-based Inco after failing to buy WMC Resources Ltd., Australia's The Age newspaper said today, citing people it didn't name.
Inco spokesman Steve Mitchell said he wasn't aware of the story and declined to comment on the issue. Xstrata also declined to comment.
Nickel prices on the London Metal Exchange averaged $14,715 a metric ton in the past 12 months, compared with $9,578 a ton in the previous five years, on surging demand from China, the world's fastest growing major economy.
Inco, of course, is a major player in the nickel marketplace, and nickel is a major component (cost and otherwise) of stainless steel.
The Xstrata web site says, about themselves, Xstrata maintains a meaningful position in six major international commodity markets: copper, coking coal, thermal coal, ferrochrome, vanadium and zinc, with additional exposures to gold, lead and silver.