Weekly round-up: Japanese aluminium premium falls on weak demand, base metals mostly stable

The Q2 Japanese premium for aluminium was settled at  $172/t, down 2.8% from the previous quarter, as weak demand in Japan and China outweighed concerns of supply disruptions from Russia. Read More…

On Monday (4 Apr’22) British financial regulators said they would review the halt in nickel trading on the LME. LME also announced an independent review into the events and introduced a daily price limit for all metals. Although open interest for major base metals such as nickel, aluminium and copper has decreased, which is a major concern.

Aluminium:
Over the week, LME 3-month prices of aluminium edged down by $76/t to $3,374/t on 8 April compared to $3,450/t at the end of last week. Another concern is dipping stocks, which fell 3% to 615,750 tonnes (t) w-o-w at LME-registered warehouses.

SteelMint’s assessment for aluminium Tense scrap, exy delhi stood at INR 174,000/t ($2,292/t), and ADC12 stood at INR 215,000/t ($2,832/t), stable w-o-w.

Further, aluminium scrap import prices CIF Nhava Sheva decreased in the range of $20-60/t w-o-w on 8 April, except for extrusion grade which increased by $50/t w-o-w.

Nickel:
Prices of nickel on LME remained positive this week. Three-month prices rose $632/t to $33,855/t towards the end of the week compared to last week’s levels.

Market participants believe that prices might go up further due to high demand and supply shortage. Stocks of nickel were assessed at 73,692 t on 8 April, up 1,302 t as against last week.

The nickel LME impact was also seen on domestic 304 and 316 grade stainless steel scrap prices which increased by INR 2,000/t ($26/t) and INR 12,000/t ($158/t) respectively on 7 April as against 5 April. The effective price of stainless steel grade 304 scrap stands at INR 193,000/t ($2,539/t) and for grade 316 scrap the price is INR 281,000/t ($3,697/t) exy Delhi.
Strong nickel prices on the LME, tight scrap supply and high demand have turned market sentiments bullish, SteelMint notes.

“200 series prices have come under pressure due to the off-season in the utensils market. Falling ferro chrome prices also indicates sluggish stainless demand,”  a trader source said.

Copper:
Despite the fall in aluminium and nickel prices, copper has shown some stability in terms of both cash and 3-month contract prices. The 3-month contract price hovered around $10,300/t- $10,500/t the whole week. However, copper inventory was recorded at 103,775 t, up sharply by 9,800 t from 93,975 t last week.

SteelMint’s assessment for copper armature scrap exy Delhi stood at INR 746,000/t ($9,826/t), up INR 5,300/t ($70/t) w-o-w.

Zinc:
The zinc market has reflected negative sentiments, with the the 3-month contract prices at $4,254/t, down $85/t as against last week. Also, stocks have declined by 14,275 t to 125,675 t yesterday.

SteelMint’s assessment for special high-grade zinc ingots stood at INR 363,000/t ($4,781/t), up INR 15,300/t ($201/t) w-o-w.

Geopolitical tensions in Europe have led to sanctions on Russia which are affecting the entire supply chain of oil and gas as well as base metals. These factors are leading to a hike in gas and fuel prices resulting in reduction of capacity utilisation of mills across Europe.