Commodities Comment:South African platinum supply to remain weak for rest of 2014
Our analysis of supply trends and stock movements from South Africasuggests platinum supply is unlikely to increase significantly over the rest of2014, even as mining operations return to normal after the five-month strike.This should help support the price, currently again well under $1,400/oz.
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North American aluminium orders dropped moderately in August comparedwith July but still look strong on a year-on-year basis, according to latest datafrom the Aluminum Association (AA). New orders for total aluminium millproducts (less domestic can stocks) were down 2.4% MoM and up 3.7% YoY.New orders for plates were down 10.4% MoM and up 18.8% YoY. The heattreatable sheet orders during August were up 5.5% MoM and 3.2% YoY, whilethere was a 3.6% MoM decline and 6.5% YoY growth in orders for non-heattreatable sheet. The net new orders of extruded products dropped by 4%MoM, and were up 10.1% compared with August 2013 orders. The dataoverall indicate robust aluminium demand in North America, although at aslightly slower pace.
The world’s largest zinc smelter, Nyrstar, launched a rights offering onThursday, with shares being offered at half price as part of the company’s bidto raise 600 million euros to fund investment and reduce debt. The rightsoffering is intended to raise 252 million euros and follows the issuance of 350million euros’ worth of senior debt notes. Nyrstar produced 285kt of zinc inconcentrate, 1.09Mt of refined zinc and 179kt of refined lead in 2013
The LME announced on Thursday its new aluminium premium contract willbe launched in 2Q15, a month later than its original plan. The exchange alsosaid it intends to wait for the court ruling in its battle with Rusal overwarehouse regulation reforms before pursuing any further amendments to thecurrent warehousing rules. The reforms have been motivated by the longqueues that formed to access certain metals from warehouses in recentyears, particularly for aluminium, leaving the LME under heavy criticism fromconsumers and attracting the attention of regulators in both the US andEurope. While the court case is about making warehouses with queuesincrease load-out rates and reduce metal intake, a key potential future reformmay involve the cancellation or limiting of rent fees while metal is sitting in thequeue to motivate financially the warehouses to increase their load-out rates.
Alcoa has signed a long-term contract to supply aerospace giant Boeing withaluminium sheet and plate, which is worth more than $1 billion. The contractis said to be the largest ever signed between the two companies. Demandfrom the transportation sector in North America has been exceptionally strongthis year, with producers reporting strong orders from aerospace businesses.Alco also said the deal establishes a foundation for continued collaboration onnew alloys.
Latest fortnightly SteelBenchmarker data from World Steel Dynamics shows asignificant break to the downside for the world hot-rolled coil (HRC) steelexport price. As of 8 September it is down to $534/t, from $554/t two weeksprior. This is the lowest recorded price since 8 July 2013 and well below the$550