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MetalMiner’s precious metals index, tracking a basket of platinum, palladium, gold and silver prices in several geographies across the globe, is now officially in a three-month uptrend this December after several months of declines.

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The Global Precious Monthly Metals Index (MMI) came in at a value of 87 for its December 2018 reading, up 2.4% from 85 last month, continuing a steady upswing. To wit, this past September’s value — 81 — was the sub-index’s lowest point since January 2017.

The U.S. palladium bar price, as tracked by the MetalMiner IndX, keeps steamrolling higher. Itself in a four-month uptrend, that price clocked in at $1,192 per ounce at the beginning of the month, with reports that during the past 30 days, palladium actually outpriced gold for the first time in 16 years.

Meanwhile, platinum reversed its uptrend from last month, landing lower at $806 per ounce. This widens the platinum-palladium spread even further, forcing many analysts to wonder what will happen in 2019.

2019 PGM Outlook

The World Platinum Investment Council (WPIC)’s latest quarterly report contained some bad news for platinum producers — but potentially good news for buyers.

(more…)

rolled aluminum on table with worker
uwimages/Adobe Stock

We tend to view the issue of China’s excess aluminum manufacturing capacity through the simple lens of its impact on the U.S. and European markets, but comments in a recent Aluminium Insider article show that the flood of low-cost aluminum from the People’s Republic of China is having a global impact.

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Markets like the U.S. and EU have mechanisms they can swiftly employ to counter a rising tide of cheap imports as the U.S. has shown, but some developing countries are still struggling months or years after western markets have already put some form of protection in place.

Despite repeated requests made to the government by some private sector primary aluminum producers like Hindalco and Nalco to impose anti-dumping tariffs on imports of primary aluminum and scrap, the chairman of Vedanta Resources, one of the country’s largest producers, dismissed such claims as simply an attempt to profit by raising import prices.

What are We Agarwailin’ About? 

Anil Agarwal is quoted as saying that the import of 17,000 metric tons in ingot and wire rod is so small in a market with a production capacity of 4 million metric tons, half of which is exported, that imports have a negligible impact on domestic mills. He is quoted as going on to challenge the notion that increasing scrap imports is undesirable, as suggested by many.

Referring to an increase of 29% over a three-year period, Agarwal noted imported scrap is typically used in automotive and detox applications where primary aluminum is cost-prohibitive. Rising scrap imports should be seen as a positive sign of the health of these industries rather than a worrying undermining of primary producers’ positions. Pointing to a 21% increase in primary metal exports between April and September of this year, jumping from 638,000 metric tons last year to 772,000 metric tons this year, he suggested Indian primary producers remained competitive in the international marketplace despite China.

The problem, though, is not just the excess Chinese downstream capacity but even more so of displaced capacity that had previously served the U.S. market (much like U.S. concerns over the health of the domestic downstream manufacturing sector), Agarwal raised concerns that India’s downstream semi-finished manufacturing capacity was under threat of substitution from cheap Chinese imports if action wasn’t taken.

Over the past seven years, imports of downstream products into the Indian market have grown at some 12% per year as a result of which the market share for imports as a percentage of domestic consumption has increased from 40% in 2011 to 60% now, a further article reports.

Whether India will impose anti-dumping or raised tariffs on China’s semi-finished aluminum products remains to be seen. Narendra Modi has his hands full with state elections at present that are not going well for him personally or his party, and do not bode well for upcoming national elections in the spring of next year. On the other hand, maybe picking a trade fight with India’s old adversary is just the sort of distraction he may welcome to divert attention.

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