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13 February 2012/ Number 9239.


Monday Chinese Cu imports fall nearly 20%: 2 Spanish group plans steel rolling mill in Brazil’s Ceará state: 3 Sims to write off $614m in secondhalf 2011 result: 4

Glencore international unhappy with plans to introduce new LMe fees
London By aLex harrison Glencore International has told brokers informally that it is unhappy about the new fee that the London Metal Exchange plans to impose from March 1, Metal Bulletin understands. Glencore is a very large user of the LME market and higher fees would add to its costs if brokers passed them on. Suggestions that Glencore has written an official letter to all its brokers may be wide of the mark though, Metal Bulletin understands. “There’s nothing in writing with a Glencore letterhead on it. It was more a case of them saying to a couple of brokers: Tokyo ‘Look, we’re unhappy with this new arrangement,’” one market source said. Glencore’s discontent about the fee is telling. The plan to introduce the new fee has proved controversial since it was announced late last year and, following a meeting with members earlier this week, the board of the LME has decided to look again at its plan at the end of February. People who attended the meeting with LME chief executive Martin Abbott and chairman Sir Brian Bender said they thought it was possible the board would decide to postpone the introduction of the fee of £0.50 ($0.77) per lot on segregated and non-segregated cross trades, and exclude earthquake that hit Japan early last year, knocking out the Dai-ichi nuclear plant and slashing Tepco’s power capacity. This will be a “strong blow” to mini-mill operators, according to Katsutoshi Kurikawa, head of the Non-Integrated Steel Producers’ Association (Fudenko) and president of EAF operator Godo Steel. Non-integrated steelmakers spend more than eight times the manufacturing industry average on power, as a proportion of sales revenues, he said. Average consumption in the manufacturing sector for every ¥1,000 ($13) of sales is 0.53 Kw, compared with 4.38 Kw short-dated carry trades from the charge. The LME said when it announced the fee that it expected it “to be passed along to the recipients of the client contract”. But the resistance among some brokers to the new fee results in part from their fears that they will not be able to pass them along to clients, and also to a belief that such changes to the cost of operating on the LME should not be made till the future ownership of the exchange is clear. Abbott argues that the fees are necessary in any case to develop its business, but also to provide for a clearer commercial valuation in the event that the exchange is sold. pClick here for full story for the EAF-based producers. Japanese mini-mills are already struggling with tepid demand in the construction sector. Tokyo Steel, the biggest EAF operator, may be forced to cut output at its main Utsonomiya plant, north of Tokyo, and shift production to other plants, the company said. President Toshikazu Nishimoto called on Tepco to rethink its decision. Production costs at Utsunomiya would go up by nearly ¥1,500 per tonne, or ¥600 million per year, based on last year’s output at the plant of 400,000 tonnes, he said. pClick here for full story

opposition to electricity price hikes grows at Japanese mini-mills
Japan’s scrap-based steel producers have called for the country’s main electricity supplier to reverse a price increase, which they say could force them to reduce output. Tokyo Electric Power (Tepco) wants to raise power prices by an average of 17% from April, and also lift its night-time rates by 40%. The rate hikes are an after-effect of the

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after opening at $8. Germanium prices in China dropped this week amid pale demand. down 100 yuan from a week ago. Copper prices fell to $8. pClick here for full story LoNdoN “I don’t see any major hiccups with our supply chain. given that the arbitrage window has been shut recently.648. pClick here for full story Click here for contacts and subscriptions . Copper scrap imports in January almost halved month-on-month to 230.5817-1.150 382. Imports of unwrought copper and copper fabricated products declined 18. “Even their body language is changing.600 836. Domestic germanium prices were 8. The benchmark price from China’s largest nickel producer is at 147.000-141.3245 ShaNghai Jinchuan raises nickel prices by 1.840 94. market participants said. Premiums for copper delivered to Shanghai have dipped as low as $60 per tonne this week.7% from December’s record high to 413.000 tonnes. Clashes have reportedly erupted in Athens over the deal.5829 1.” a second producer said. from 138.3008.2 per lb) on February 10.33 on February 3. from $319.1 London Precious Metals Gold am Spot Silver midday Platinum am Palladium am $1. This can only suggest two things: consumers in Japan are either still sitting on a big inventory. A Nalco tender for 30. or they have simply cut output.605.000 tonnes of alumina at $324 per tonne was awarded to Noble Group during the week. as rumours emerged that the Greek austerity agreement may yet fail.000 yuan per tonne on February 8. up 2. because well-stocked traders stopped buying while downstream users showed few signs of returning to the market in a big way. “I haven’t received many since the beginning of this year.50 $33.705 per tonne. Some small producers have been suspended for inspection following a major cadmium pollution incident in China’s Guangxi province. Metal Bulletin understands.716. ShaNghai Jinchuan Group raised its nickel prices by 1. reversing an earlier premium.1-10.750 9. pClick here for full story LoNdoN China germanium prices hit by flagging demand MB aLUMiNa iNdEX: $321.40 per tonne on February 10.00 per oz $702.964 tonnes. LME Stocks (tonnes) Copper Tin Lead Zinc Aluminium Aluminium Alloy Nickel NASAAC Comex Gold Feb Comex Silver Feb Nymex Platinum Apr Nymex Palladium Mar fell rose rose fell fell unchanged rose rose $1. The January import volume was nonetheless 13. up from $21.200 25 180 540 to to to to to at to to 312.420 $1.50 per oz $3.488 156.400 per tonne in Thursday’s officials.4% Bismuth prices rise on ‘temporary’ guangxi suspensions Bismuth prices in China edged up after some producers temporarily suspended production following a pollution scandal in Guangxi. as opposition turned violent.000 yuan per tonne ($10. Shanghai Futures Exchange copper prices ShaNghai have been lagging those on the London Metal Exchange.” the trader said. But domestic spot stainless steel prices remain unchanged after the Chinese New Year holiday.647.40: February 10 Metal Bulletin’s fob Australia alumina index crept up to $321.000 tons.25 per tonne.00 per oz Barclays Bank $/£ $/£ 3 months £/YEN €/$ 1. Inbound shipments may hold at a high level in February due to shipping schedules. tracking recent rebounding nickel prices on the London Metal Exchange.740 2/ Metal Bulletin Daily/ Monday 13 February 2012/ Number 9239.000 yuan ($23.15 1.” one Chinese germanium producer said.99-123.600 yuan ($1320. An advancement means they have some flexibility.00 per oz $1.466.5828 -1.450 137.715. there was a marked change in attitude. among the market participants he had spoken to during the week.500 yuan per kg.000 yuan per tonne. We required an advancement on our contract with [our supplier] and they agreed. This was 37. Now people in aluminium are complaining about the cost of alumina. A trader added that. “My sales into Europe are achieved at 8.000-142.027.6% higher year-on-year.90 $701.50/06 per tonne. as sentiment changed among market participants.000 yuan a couple of days ago. compared to December’s 450.357) per tonne ex-works. Base metals prices fall in LME officials on renewed greek woes Base metals prices dipped again during official trading on the London Metal Exchange on February 10.1365) per kg on Friday. according to customs data.355.3244-1. “I asked for 20 tonnes [and] got half at 138. but the guy told me his plant was shut down temporarily for self inspection.000 yuan from February 2 when Jinchuan made its most recent price change by cutting its nickel by 4. Three-month LME nickel settled at $21.” a buyer told Metal Bulletin. basis three months.Non-ferrous metals China’s January copper imports fall by nearly 20% ShaNghai China’s copper imports fell for the first time in eight months in January after higher London Metal Exchange prices shut down the opportunity for arbitrage and business slowed before the Chinese New Year. and reached a new low for the day $8.” one Chinese bismuth buyer said.000 per tonne on February 2.250 5.2% lower year-onyear.4% on February 10.5818 122. to a key account.45 850 60 125 2. according to preliminary customs data. but should fall later. Metal Bulletin bismuth prices in China climbed to 140.

it should stop operating and leave the country.1 Spot 63. general director Raul Vera La Torre said in a filing with the country’s securities regulator. Producers in Europe are now offering €1. Merchant bar was sold this week at $700-710 per tonne fob main Turkish port for February production and delivery. it added. SMV. pClick here for full story london Turkish merchant bar exporters slash prices by $20 on softer scrap costs Turkish merchant bar exporters have cut February export prices by $20 per tonne on softening ferrous scrap costs and sluggish demand. Metal Bulletin was told. pClick here for full story China’s iron ore imports fall 7.124 employees walked out on February 6 following legal action that retroactively suspended an increase in wages for the 2010-11 period. down from $149-150 cfr yesterday. and things in Brazil were more severe.” an iron ore trader in Shanghai said.32 million tonnes. as a sluggish steel market and high-priced iron ore deterred buyer interest.343. according to Vera La Torre. while Ceará state. The rolling project is designed to be divided into two phases: the first will have a 500. pClick here for full story london China’s iron ore import market eased again towards the end of the week.494 per tonne.335-1. and this is expected to be granted by June. The Spanish group will invest about $600 million in the steel project.5% Indian fines stood at $148-150 per tonne cfr on February 10. I bought 1.240 ($1.” an iron ore trader in Dalian said. January imports fell to 59. Grupo Añon’s rolling mill could be fed by the CSP slab plant. market participants told Metal Bulletin. “I heard that a few steel mills in Hebei which shut their furnaces during the Chinese New Year have yet to restart due to the weak market. according to traders.000 tpy rolling capacity for both long and flat steel products. and deals have been scarce.” a trader in Shandong said. A 10. The miner is expected to set a meeting with the country’s labour minister to discuss the issue. Grupo Añon has already applied for an environmental licence.4% monthon-month in January. an industry analyst said.653) per tonne delivered for grade 304. pClick here for full story sheet. with market participants attributing the decline to supply disruption from Australia and Brazil due to bad weather. pClick here for full story SHangHaI 3/ Metal Bulletin Daily/ Monday 13 February 2012/ Number 9239. However.150-1.Iron and steel Spanish group plans rolling mill in Brazil’s Ceará state São Paulo By ana Paula Camargo Spain’s Grupo Añon has signed a memorandum of understanding with Brazil’s Ceará state to build a rolling mill close to Vale’s proposed slab plant. in Brazil’s northeastern region. The rolling mill’s output will go to meet Brazilian market demand. Prices have gone down due to lower scrap costs.593-1.200-1. Shougang Hierro Perú said its mining operations are suffering as a result of the strike. Eduardo Neves. so people are being exceedingly cautious about buying. citing higher demand in the market and less import offers from China.3% average increase in the February alloy surcharge for the flat-rolled product to €1. and steel mill profits are quite poor. “Once this licence is issued.460-1.5% Fe iron ore prices fall to $148-150 cfr Shougang Hierro Perú workers start new strike Unionised workers at Peruvian iron ore producer Shougang Hierro Perú have gone on strike for an indefinite period. down 13. but still $1-2 higher than a week earlier.” Neves said. from January’s €1.200 tonnes at $700 fob for February production and March delivery.190 per tonne delivered transacted for production in February and March. One Australian miner wanted to sell a cargo of Robe River fines at $128 cfr yesterday. told Metal Bulletin. he added. plans to hold a 10% stake. Consumers have been purchasing small parcels to serve their immediate needs. The few buyers that are in the market have bought only small tonnages. down from $710-720 fob previously. depending on both domestic and global economic conditions.” he added. 2mm cold rolled stainless sheet for April production. The 1. but the offer found no takers. “Merchant bar has been sold at $700-710 fob.” a trader in Israel told Metal Bulletin. pClick here for full story SHangHaI “Some of Vale’s iron ore mines halted production due to the heavy rains. infrastructure director at state development agency Adece. but “no deal has been closed yet”.4% on supply issues Europeans seek $65 hike on 304 stainless sheet European mills are seeking increases on their domestic base prices for stainless China’s iron ore imports fell by 7. São Paulo The precise product mix has still to be disclosed.” the Sindicato de Empleados de Shougang Hierro Perú union said in a statement. according to preliminary customs data. Mills and traders have been struggling to secure orders. “Last month. and the company had to declare force majeure on around 2 million tonnes of iron ore deliveries. Neves did not rule out the possibility of exports. “Downstream demand is really bad. The latest offers are €50 per tonne higher than the €1. Companhia Siderúrgica do Pecém (CSP). Neves said. mainly in the country’s northeastern area. we saw that operations in Port Hedland were disturbed temporarily by a cyclone. which will be increased to 1.9% year-on-year.2 million tpy at a later stage. is also helping boost prices. “If Shougang Hierro Perú does not respect Peru’s labour laws. the company will be allowed to commence construction. Click here for contacts and subscriptions . but did not give an estimate of iron ore output losses. while the project’s start date has not yet been confirmed. Prices of 63.

we still haven’t seen any impact from the cold weather. We are quite optimistic for the near future. However.500 per tonne for the past two weeks after reducing them by 10% since the beginning of the year. The latest export tender held by the Kanto Tetsugen.800-1. it said.350-1. which brings together traders from the Tokyo area.” the merchant said. February 10. Scrap intake and shipments for the last six months of 2011 were around 7 million tonnes. as market participants remained reluctant to pay higher prices. with little market movement heard. they are some ¥800 per tonne lower than the export tender held last month by Tokyo dealers. Levels fell back on Friday as nickel dropped. “What will have an impact in the short term is the freezing weather and the lack of scrap availability.870 London Prices not likely to increase in near term.136) per tonne on Friday. There is a feeling that scrap prices are reaching a bottom.130-1. compared with $138 million in the same period a year earlier.200 $2. Equally important.350 ($2. February 10. with a merchant reporting on Wednesday numbers as high as £1.” it added. but gains have recently become steadily less pronounced.218. demand has not been exceptional – it’s just been normal. it said. depreciation and amortisation (ebitda) to be around $141 million for the first half of its financial year to June 30. Prices were higher midweek. saw the average winning bid come in at ¥30. “The impairment [$594 million after-tax] arose predominantly within the North America segment and related to acquisitions and joint ventures made and accounted for prior to the end of fiscal 2008. The index was stable on Friday. it said.64 published a week ago.Scrap and secondary Sims to write off $614m in second-half 2011 results London by danieL GLeeSon Metal recycler Sims Metal Management will write off $614 million in its half-year results for the period to December 31.” a producer in Germany said. yet a merchant said more deals were likely to be concluded in the afternoon and into early next week.000 per tonne. as poor weather in northern Europe exacerbated the scarcity of material. down from £1. traders said. Tokyo It expects its underlying earnings before interest. “This week. Prices are firmer now.00 4/ Metal Bulletin Daily/ Monday 13 February 2012/ Number 9239.842 ($399) per tonne fas.300-1. €/tonne diecasting 1. Similarly. 2011. A shortage of scrap on the continent.870 ($2.” the company said. Tokyo Steel. pClick here for full story Uk 18/8 stainless steel scrap solids prices increase on fluctuating ni. but are unlikely to move up much as buyers hold off on picking up new material. coupled with high demand.810 per tonne fas. The level was only marginally higher than the export tender held by a dealer in Osaka earlier last week. 18/8 prices stood at £1.325 a week ago. which area saw the average winning bid come in at FAS ¥30.500-30. “They were in the market with [HMS 1&2] 70:30 last week. has left purchase prices unchanged at ¥29. but I haven’t heard anymore. though. London Non-Ferrous scrap Europe Aluminium European free market Floated Frag Cast Mixed turnings 6% LME Cash primary (lowest midday bid) LME Cash alloy (lowest midday bid) (€/tonne eff Feb 10) 1.250-1.330 1. The company is to release its results to the market on February 17.000 per tonne after three weeks of declines.” it said. which as the largest EAF operator in the country acts as Japan’s unofficial domestic benchmark price-setter. relating to acquisitions made before the financial crisis of 2008. no deal was confirmed prior to publication. increased demand Prices for intermerchant 18/8 stainless steel scrap solids increased last week on a rise in nickel costs and increased demand. pClick here for full story Click here for contacts and subscriptions . a second producer said.820-1.400 1. merchants say Metal Bulletin’s Daily Ferrous Scrap Index was unmoved on Friday February 10 at $421.160. to €1. the average domestic price at european secondary aluminium prices stay flat European secondary aluminium prices remained largely flat on Friday February 10. “Results in the first half for Australasia and Europe (excluding the UK traditional metals business) remained solid. While the figures are significantly higher than the settlement prices for the few deals that were taking place during the Chinese New Year.482) per tonne. taxes. but there are few factors to actually drive them significantly higher for now. “[Turkish mills] will be buying today and into next week. “First-half results were affected by continued difficult operating conditions for the traditional metals business. “I don’t think that prices will increase though. DIN226 pressure diecasting ingot prices picked up on the low end. with only around 3 million tonnes of that activity in the last three months of the calendar year.820-1. London Japan’s scrap prices steady after January dip Japanese scrap prices for domestic and export shipment were little changed at the end of last week. had pushed prices up over the course of the last few weeks. The company said the write down will not affect its dividend policy or its growth strategy for the whole business. the end of last week was virtually unchanged from the previous week’s level of around ¥27.1 Non-ferrous foundry ingots Aluminium Europe MB free market Duty paid delivered works pressure ingot price (DIN226/A380) Reminder: Prices are MB copyright.416-2. particularly in North America.” he said.” There was a rumour of a European merchant selling a cargo of HMS 1&2 (70:30) on Thursday.00 $2.” he said.19 per tonne cfr Iskenderun on an HMS 1&2 (80:20) basis. it said in a statement. 2012.275-1.0572.870 previously. down more than $12 from the $433. from €1.380 per tonne after the LME nickel market broke through $22.