Commodities Roundup: LME Nickel, Auto Sales Down in China and Oil Price Sliding

Chinese demand Jovanning/Adobe Stock

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 from particular commodity markets.

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

LME Nickel, Stainless Surcharges Fall

Both LME nickel prices and stainless steel surcharges fell in October, MetalMiner’s Irene Martinez Canorea reported this week.

The surcharges dropped for the fourth consecutive month, she noted, while LME nickel prices showed greater volatility than in previous months (particularly at the end of October).

Tata-Thyssenkrupp JV Under Scrutiny

The European Commission will be taking a further look at the joint venture between Tata Steel and Thyssenkrupp amid concerns the deal will lead to higher prices in Europe.

The commission has until March 19, 2019, to make a decision. Of the steel forms under scrutiny is grain-oriented electrical steel (GOES).

Speaking of GOES, MetalMiner’s Lisa Reisman chronicled the latest developments in the tariff exclusion request battle between ABB and AK Steel (the U.S.’s lone GOES producer).

The tariff waiver process continues to come in for criticism from companies and industry groups who argue the process is too lengthy, and in other cases, companies filing for waivers have complained about the influence of domestic metals producers in waiver rejections.

Automotive Sales Cool in China

China, the world’s largest automotive market, has seen sales cool this year.

Detroit automaker Ford is among the companies that have been affected by the decline. According to sales data reported by Ford this week, its October sales in China were down 45% year over year, marking the second straight month it has posted a year-over-year decline greater than 40%.

However, it should be noted Ford’s Lincoln brand has bucked the general trend. While Lincoln sales in China were down in October, they are up 3% through the first 10 months of the year compared with the same time frame in 2017.

Tata Reports Quarterly Earnings

It’s been a busy year for Indian steelmaker Tata Steel.

The Mumbai-based firm recently reported earnings for the quarter ending Sept. 30, showing profit more than tripled year over year.

In addition to the aforementioned JV with Thyssenkrupp — the two firms’ merged European operations would create the second-largest steelmaking entity in Europe, behind only ArcelorMittal — Tata has made other acquisitions, including Usha Martin and Bhushan Steel in India.

As MetalMiner’s Sohrab Darabshaw reported this week, Tata is looking to unify its brand on the heels of its acquisitions and wants to improve safety conditions at the acquired facilities.

Eyes on Dunkerque

Meanwhile, steel tycoon Sanjeev Gupta and his GFG Alliance — of which Liberty House Group is a subsidiary — announced a financing deal to acquire Rio Tinto’s Dunkerque aluminum smelter in France.

As readers may remember, Norsk Hydro previously appeared set to acquire the smelter, but ultimately backed out.

Oil Prices Slide

Oil prices had been skyrocketing this year, reaching their highest levels since 2014 back in September.

The oil price has been sliding in recent weeks, despite posting increases the last couple of days. As MetalMiner’s Stuart Burns explains, the oil price could put pressure on metals like aluminum; however, much remains to be seen, particularly on the sanctions front.

“With Russia supplying some 10% of the world’s crude oil, sanctions threatened against Russian oil companies — or, at least, their owners — remain a potential threat,” Burns noted. “However, it is becoming increasingly clear Trump’s first priority is a low oil price and has shown with aluminum that he is willing to compromise on sanctions against oligarchs like Oleg Deripaska if it means commodity prices remain muted.”

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