Commodities Roundup: Copper price; Zinc narrative; Facebook wind power deal

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Here’s a quick rundown of news and thoughts from particular commodity markets, including copper price movements, Facebook's wind power project deal and much more.

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

Copper price movements

The copper price heated up at the end of February, rising as high as around $9,600 per metric ton.

Since then, however, the red metal has cooled off, falling in a band just below $9,000 per metric ton over the last several weeks.

Major banks, like Goldman Sachs and JP Morgan, have differing opinions about the copper price narrative. MetalMiner's Stuart Burns delved into whether or not the easing of the price is here to stay.

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"JP Morgan is apparently not so bullish as Goldman," Burns wrote. "According to Reuters, the bank is saying the lack of concentrate supply is a temporary, pandemic-induced issue that is past its peak.

"As a result, mine supply is now increasing. Greater concentrate supply will improve metal availability. This is the case for Chinese smelters and for the rest of the world, which has also seen exceptionally low refining charges.

"JP Morgan is forecasting copper prices to peak at $9,000 per ton this quarter and slide back to $7,865 per metric ton over the second half of the year. It argues more plentiful mine supply will take the steam out of the copper market."

Tata Steel to introduce carbon surcharge

Elsewhere, Tata Steel plans to introduce a carbon surcharge on hot rolled and cold rolled coil, MetalMiner contributor Christopher Rivituso reported.

The surcharge will take effect July 1.

"The planned surcharge scheme stipulates for now a €12 ($14.30) per metric ton of hot and cold rolled coil from TSE’s plants at Port Talbot (Tata Steel UK) and IJmuiden (Tata Steel Netherlands), the spokesman told MetalMiner," Rivituso reported.

As we've noted previously, HRC prices have continued to rise in Western Europe.

Zinc narrative

The zinc market has behaved similarly to that of copper, Burns explained earlier this week.

Just like copper, zinc treatment charges have declined.

"Reuters reports last year’s 10-year high smelter treatment charge of $299.75 per metric ton based on the expected surge in mine production failed to materialize," he wrote. "Covid lockdowns rocked large supplier countries such as Peru and Mexico.

"As a result, this year’s benchmark smelter terms have almost halved to $159 per ton, Reuters reported. That marks its the second-lowest level in a decade.

"The last time treatment charges were this low, zinc rose to $3,596 per ton in 2018."

Facebook reaches deal on wind power project

Social media giant Facebook announced a deal with Indian firm CleanMax for a wind power project in India.

Facebook will purchase power from the project, as its energy mix in the country will be 100% renewable.

As MetalMiner contributor Sohrab Darabshaw noted, 50% of the project has already been commissioned.

Pandemic, rising materials costs impact breweries

The Covid pandemic changed the way businesses across a wide variety of sectors have to operate.

Breweries, for example, have had to adapt in the face of pandemic-related restrictions and shifts in consumer preferences.

In a conversation with MetalMiner last month, Josh Gilbert, founder of Temperance Beer Co. in Evanston, Illinois, looked back on the last year for the brewery.

“One of the most challenging things is that you can change your hours based on ‘Oh OK, summer’s coming up, we’re going to have more people drinking beer so we’ll extend our hours,'” he said. “Like we do every year. This was just ‘OK, now next week everything’s changing.'”

Among other changes, Gilbert said the brewery went from an about even split between filling kegs and cans to a split overwhelmingly in favor of cans. As people spent more time at home over the last year, demand for aluminum cans increased. (As with many other products, an aluminum can shortage resulted.)

Gilbert also cited rising costs for things like cardboard case trays and can ends (the latter for which lead times surged from 10-14 days to over three months).

Russia's NLMK Group posts strong Q1

Amid rising prices and robust demand, steelmakers enjoyed a strong Q1.

Russia's NLMK Group benefited, with crude steel output up 12.1% from the previous quarter.

Furthermore, NLMK's flat product sales in the US rose by 16% from the previous quarter.

Find more insight on MetalMiner’s LinkedIn.

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