Commodities Roundup: Mining in Goa, Aluminum Price Volatile, and Copper’s Recovery

conflict mineral

For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts about particular commodity markets.

From price movements to policy decisions, we scour the landscape for what matters. This week:

Demand for Mining in Goa

MetalMiner’s Sohrab Darabshaw touched on a growing current in India vis-à-vis mining policy in Goa.

As Darabshaw explained, the popular tourist destination was once a prominent mining hub, but mining activity there was largely halted in 2012.

Mining has picked up somewhat since then, but not to pre-2012 levels, he explained. As a result, stakeholders are petitioning the government to allow for a full-scale resumption of mining in Goa. Goa’s chief minister sent Narendra Singh Tomar, India’s minister for mines, a letter asking for a “legislative cure” to the situation.

“The Indian government is perturbed by the slowing down of the overall mining sector in India,” Darabshaw wrote. “For example, a recent report by the Centre for Monitoring Indian Economy (CMIE) pointed out that foreign direct investment (FDI) inflows had slowed down significantly, from U.S. $659 million in 2014-15 to about $36 million at the end of 2017-18. Mining’s overall contribution to FDI had declined from 2.06% to 0.08% in the same period.”

A Cold War with China?

The U.S.’s trade tensions with China throughout the Trump administration have been well-documented.

But a recent investigative report had MetalMiner’s Stuart Burns asking if we could be on the precipice of a new Cold War of sorts.

“A post by Edward Luce in the Financial Times refers to a Bloomberg expose reporting on how China’s People’s Liberation Army has installed secret microchips on motherboards that were used to operate big corporate data servers, giving them unprecedented access to American military and technology secrets on an epic scale,” Burns wrote. “The microchips are said to be smaller than a grain of rice and thinner than the tip of a sharpened pencil, yet could provide backdoor access into the most secret of American technology. We quote Luce when we say, according to Bloomberg, China may have infiltrated U.S. military hardware, including drones, fighter jets and so on.”

Companies like Apple have denied that they knew about the chip. Regardless, Burns opined that China should not be underestimated.

“There may be some who scoff at the suggestion that China could rival the U.S. as a superpower, but that is to misunderstand the trajectory of history,” he wrote. “China is on the rise, faster in terms of technology than it is even economically.”

Copper Continues Recovery

Copper prices had been slumping from June through the summer season, but they have shown signs of recovery of late.

The LME copper price, for example, recently breached the $6,000/mt benchmark. MetalMiner’s Irene Martinez Canorea suggested the metal dubbed “Dr. Copper” could be due for further price support.

“Despite concerns about a Chinese economic slowdown and Chinese manufacturing (with a falling Chinese Caixin Manufacturing PMI), copper looks stronger,” Martinez Canorea wrote. “Despite an easing of supply in Chilean mines, copper remains in a 45,000-ton deficit. In fact, miner BHP forecasts an increase in copper demand.”

Palladium Continues Run Over Platinum

Despite their historical relationship, palladium traded at a premium to platinum for yet another month.

“The U.S. platinum bar price had its own bounceback after having dropped last month. Platinum rose to $814 per ounce, up from $777 per ounce in September,” MetalMiner’s Taras Berezowsky wrote. “However, U.S. palladium bar built up a two-month upward price trend by breaking the $1,000 per ounce level for the first time in eight months, rising to $1,070 per ounce.”

Tariff Exclusion Request Clashes

Not surprisingly, metal producers have clashed with manufacturers over metal tariff exclusion requests.

Exclusion requests to U.S. steel and aluminum tariffs have poured in by the tens of thousands, with buyers arguing that certain metal products they need are not made domestically in the quantity or quality they require for their products.

MetalMiner Executive Editor Lisa Reisman covered the issue this week with respect to grain-oriented electrical steel (GOES).

“At issue is that the power equipment manufacturers want an exclusion for GOES not currently produced in the U.S., and the sole domestic producer has argued its products provide an ‘equal’ substitute,” Reisman wrote.

LME Nickel Price Volatility Lessens

In Martinez Canorea’s Stainless Steel Monthly Metals Index (MMI) report this week, she noted a general sideways trend in the sector, marked by lower nickel price volatility, lower domestic stainless steel surcharges and slightly higher stainless steel prices.

“Nickel prices were more volatile in September, showing two sharp movements (down and up) at the beginning and the end of the month,” she wrote. “Despite the recent downtrend, nickel prices have remained in an uptrend since last summer (June-July), when prices started to increase sharply.”

Aluminum Fluctuates

The aluminum market had a bumpy week.

The LME aluminum price jumped 2% last week after Norsk Hydro announced the shutdown of its Alunorte alumina refinery.

However, the price came back down after reports that Hydro had received permits to use new technology at the refinery related to waste disposal, with a restart of the facility on the way.

“The mere news of the alumina shutdown signifies how tight the aluminum market remains,” Martinez Canorea explained. “Any indication of a production slowdown, even for raw materials, could send aluminum prices higher.”

Share on Procurious

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.