- LME Aluminum 3M Select trades $66 higher at $2,643/mt; prices extend Thursday’s gains (8:45 AM CDT)
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Aluminum prices surged over 2% in London following the suspension of bauxite exports from Guinea by Emirates Global Aluminium. The company is seeking clarity from local customs authorities about the halt, which impacts the supply of bauxite, a vital raw material for alumina production. Despite the export disruptions, Emirates Global stated that its alumina refinery in Abu Dhabi remains operational. In response to the supply constraints, alumina futures in Shanghai have reached their highest levels since their launch in June 2023.
The recent export stoppage compounds ongoing supply issues in the alumina market, following earlier curtailments by Alcoa and Rio Tinto. In contrast, Chinese producers are ramping up output to take advantage of favorable market conditions, with approximately 6.4 million tons of new capacity set to come online next year. This increase could potentially exert downward pressure on prices, even as smelters struggle with rising alumina costs. (Bloomberg)
- CME Group blocked Istim Metals' application for an aluminum warehouse registration due to objections from metal market participants, following a controversial fee increase by Istim at its London Metal Exchange (LME)-registered depots. Istim, which dominates LME metals storage, applied in July to list a warehouse in Gwangyang, South Korea, for CME’s Comex aluminum contract. The rejection, announced on October 4, was heavily influenced by traders’ concerns over the fee hike, which has contributed to ongoing disruptions in the LME’s aluminum market. Traders have faced difficulties withdrawing metal from Istim’s warehouses, further complicated by elevated re-registration fees, which remain above the industry norm despite partial reductions. (Bloomberg)
- LME Copper 3M Select trades $22 higher at $9,595/mt; prices extend yesterday’s gains (8:45 AM CDT)
- CME HRC Steel last traded at $705/st; prices trade $4 higher from yesterday’s settle
- Nippon Steel has agreed to sell its 50% stake in the AM/NS Calvert mill in Alabama to joint venture partner ArcelorMittal for $1, should its $14.1 billion bid for US Steel succeed. This move is intended to alleviate potential antitrust issues arising from Nippon’s increased footprint in the US steel market post-acquisition, as both companies produce auto steel sheets. The transaction, contingent on regulatory approval for the US Steel deal, would also see Nippon injecting cash and forgiving loans totaling $900 million. The deal faces opposition from President Biden, and a US security panel’s review has been delayed until after the November presidential election, pushing a final decision further into the future. (Bloomberg)
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