Argus editors analyse what to watch for in the metals markets as 2019 begins.
US-China trade tensions, uncertainties over US macroeconomic health, and lingering oversupply are expected to cloud metal prices over the first months of 2019, remaining common themes between markets. Copper scrap spreads are projected to remain little changed over the first quarter owing to split sentiment on a resolution of US-China trade talks. Base metal scrap supplies remain abundant since Chinese scrap import restrictions came into effect in March 2018. Aluminum scrap prices are expected to trade flat at eight-year lows early in the year as typical winter tightness is countered by abundant supplies. In turn, stainless prices will remain under pressure from excess supplies and lower nickel prices. Despite relatively steady steel mill demand outlooks, ferro-vanadium and ferro-chrome are projected to decrease amid easing supplies and lower costs. Cobalt metal supplies are also expected to swamp consistent demand from alloy markets over much of the first half of 2019.
Read our Viewpoint analyses for metals below.
Viewpoint: A380.1 to fall but scrap cushions
US spot prices for secondary aluminum alloy A380.1 are expected to soften in the first quarter as some smelters, facing profitable scrap and raw material spreads, are willing to lower offers in the meantime.
Viewpoint: Australian coking coal rebound to continue
Record ship queues at the Dalrymple Bay Coal Terminal (DBCT) port in Queensland reflect a rising number of new mining projects, expansions and restarts that are boosting Australian coking coal exports, with more to come over the next couple of years.
Viewpoint: Australian iron ore firms turn to technology
Australian iron ore and coking coal mining firms are turning to technology solutions to contain cost pressures driven by older mines, explosives prices and equipment availability.
Viewpoint: China’s EV battery sector may face reshuffle
Potential changes to China's electric vehicle (EV) subsidy policy next year may require domestic battery manufacturers to rethink their product structure.
Viewpoint: China’s steel mill profits may plunge
China's steel sector profits may shrink next year on the back of slowing demand from the real estate and automobile industries. But an expected uptick in infrastructure investment and progress in the US-China trade dispute could offer support to steel prices and profit margins.
Viewpoint: Cobalt prices face supply pressure
US cobalt prices will likely decline in the first half of 2019 as supplies of metal and upstream cobalt products outweigh demand. Meanwhile, greater output and lower production costs will outstrip a bump in indium demand over the same period.
Viewpoint: Copper scrap spreads trend weaker
Copper scrap is poised to maintain weaker spreads through the end of 2018 amid unchanged supply-and-demand fundamentals.
Viewpoint: Cu outlook clouded by trade war
The global market for refined copper is likely to remain in a narrow deficit through 2020, helping to support gradual price gains. Still, an escalation of the US-China trade war and a sooner-than-expected deceleration in global and Chinese economic growth pose major risks.
Viewpoint: Cu spreads range-bound on uncertainty
US copper scrap spreads are expected to show minimal change in the first quarter as global trade tensions and uncertainty over China's economy linger amid mostly unchanged supply-and-demand fundamentals.
Viewpoint: Higher prices ease anode-grade supply woes
An increase in seaborne supply of anode-grade coke in 2018 showed that sellers were correct in their assessment that higher prices would draw out additional availability.
Viewpoint: Imports to drive FeTi prices in 1Q 2019
US ferro-titanium prices are widely expected to decrease early in the first quarter of 2019 on import pressure before trading steady over the remainder of the first half.
Viewpoint: Imports to pressure HC FeCr in 1H
US high-carbon ferro-chrome prices are expected to decrease in the first half of 2019 on an oversupply of alloy across regional markets.
Viewpoint: Indian steel demand faces headwinds
India's steel demand growth may slow in the 2019-20 financial year that starts 1 April, as political uncertainty and problems in the financial sector weigh on infrastructure creation and consumer demand.
Viewpoint: Is galvanised steel losing its shine?
Hot-dip galvanised coil is a steel product used in a variety of sectors, including automotive, construction and agriculture. In recent years it has been the darling of the coil suite, certainly in Europe, helped by the strength of the carmaking industry.
Viewpoint: Rising supply to weigh on FeV
Easing supplies coupled with lower consumption rates are expected to force US ferro-vanadium prices down in the first half of 2019.
Viewpoint: Stainless weakness to persist in early 2019
Excess stainless steel scrap inventory, increased nickel discounts and falling LME nickel prices are all contributing to a weak market outlook for US stainless scrap prices in early 2019.
Viewpoint: Steady output, higher demand buoy FeMo
Steady production levels, higher raw material costs and greater demand are expected to lift US ferro-molybdenum prices in the first half of 2019.
Viewpoint: UBC buying spreads to stay wide in Q1
Mill buying spreads for used aluminum beverage can (UBC) scrap are expected to stay near more than 10-year lows in the first quarter as an abundance of scrap and unusually far-ahead buying offset typical winter tightness.