Commodities Roundup: Lead, zinc in surplus; China further consolidates steel sector; copper mining slowed by pandemic

commodities

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.

MetalMiner, a sister site of ours, scours the landscape for what matters. This week:

Lead, zinc markets in surplus

According to the International Lead and Zinc Group (ILZSG), the lead and zinc markets posted supply surpluses during the first half of the year.

The lead market was in surplus by 78 kt during the first six months of the year, while the zinc market was in surplus by 205 kt during the period.

Chinese steel consolidation

MetalMiner’s Stuart Burns outlined the latest move in Beijing’s drive toward consolidation of its massive steel sector.

"China Baowu Steel Group, the country’s top steelmaker by output, is itself the product of a consolidation of Baoshan Iron & Steel and Wuhan Iron & Steel in 2016, plus further additions since,” Burns explained. “Baowu has now absorbed stainless producer Taiyuan Iron & Steel (Group) Co Ltd (TISCO) by taking a 51% controlling stake.”

Burns also put the sheer size of the Chinese stainless steel sector in perspective.

“To gauge the size of these state-engineered behemoths, TISCO may be No. 2,” he wrote. “However, at 4.5 million tons of capacity, it is greater than half the size of Europe’s 7 million tons stainless steel production and nearly twice as large as the U.S.’s 2.6 million tons.”

U.S. steel imports jump in July

While U.S. steel imports are down by nearly one-fifth in the year to date, imports surged in July.

The U.S. imported 2.4 million metric tons of steel in July, up from 1.3 million metric tons the previous month, according to the U.S. Census Bureau.

On a month-over-month basis, the U.S. saw the largest import increases for rebar, galvanized hot dipped sheets, and blooms, billets and slabs.

Indian researchers hail Li-S battery technology

MetalMiner contributor Sohrab Darabshaw outlined work on a new type of lithium-sulfur battery by a team of Indian researchers.

“Researchers at the Shiv Nadar University and the Indian Institute of Technology (IIT) Bombay claim to have developed a technology for production of this eco-friendly lithium-sulfur (Li-S) battery,” Darabshaw wrote. “The researchers claim the battery is three times more energy-efficient and cost-effective than the Li-S batteries currently in use, the Hindu Business Line reported.”

Pandemic impacts copper mine output

The COVID-19 pandemic has impacted operations in some of the top copper-producing countries.

According to the International Copper Study Group (ICSG), global copper mine production in the first five months of the year fell 2.2% compared with the same period in 2019.

Peru, the No. 2 copper producer in the world, saw major drop-offs in production. Copper mine production in the country in April and May fell by 33% and 41%, respectively, according to the ICSG. Through the first five months of the year, Peru’s mine production dropped by 23%.

Steel oversupply makes its way to ... China?

For a long time, Chinese steel oversupply has been the lament of steelmakers outside of China. China's massive steel sector floods global markets and, as a result, depresses prices, those steelmakers would argue.

For now, however, given the relative progress of China’s economic recovery relative to the rest of the world, the oversupply dynamic has briefly been flipped on its head, Burns explained.

“On the one hand, global steel demand was depressed in the spring, impacted by lockdowns and restrictions as a result of the COVID-19 pandemic,” he wrote. “Steel producers looked to dump excess capacity.

“As a result, China was able to access low-cost metal from overseas markets keen to find a home for unwanted metal. Ironically, China has briefly become the home for unwanted global overproduction.”

Global aluminum output rises in July

Meanwhile, according to data compiled by the International Aluminum Institute, global aluminum output reached 5.45 million metric tons in July.

July output marked an increase from the 5.30 million metric tons produced the previous month.

Chinese production totaled 3.13 million metric tons in July, up 3.3% from the previous month.

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