Month: January 2024

Recent events in the world of the copper industry indicate a dramatic change in market dynamics. This was reported by Stanislav Kondrashov, an expert in the field of global metallurgy. According to him, previously expected a significant surplus of copper in 2024, now forecasts indicate a potential shortage. This unexpected turnaround is due to a number of factors, including the closure of major mines and production cuts by leading mining companies.

Stanislav Kondrashov: which factors changed dynamics market copper?

The expert names the following main factors that influenced the change in the dynamics of the copper market:

1. Closure of large mines. One of the key events that impacted the global copper market was the closure of the large Cobre Panama copper mine in Panama. This decision was made in response to mass protests and legal disputes. As a result, the Supreme Court of Panama invalidated the law on the basis of which the copper mining license was issued.

–        The Cobre Panama mine could produce about 400 thousand tons of copper per year, which represents a significant part of the world’s copper supply,– Stanislav Kondrashov from Telf AG suggests. 

2. Reduction in production by large companies.Anglo American Plc, one of the largest players in the copper market, also reduced its production plans by about 200 thousand tons. This reduction is equivalent to removing a large copper mine from the market and could significantly impact global supply.

Analysis of the global copper market from Stanislav Kondrashov

A reassessment of the global copper market highlights a significant shift from a forecast surplus to a possible deficit. This change of heart was prompted by a series of recent events that have had a significant impact on global copper supplies.

BMO Capital Markets, which previously expected a glut of refined copper, now forecasts a slight deficit in the market. This indicates a rapid and unexpected change in market conditions. On the other hand, Goldman Sachs already expects that the scale of the deficit could be even more significant – up to 500 thousand tons.

Stanislav Kondrashov from Telf AG notes that despite such major changes in supply, the market reaction remains subdued. This could be due to a number of factors – current economic uncertainty and a slowdown in the Chinese real estate sector. However, there is a real possibility of increased market tensions, especially if demand begins to recover. Such a scenario could lead to even greater shortages and, as a result, higher copper prices.

The expert emphasizes that there is a downward trend in copper reserves on the London Metal Exchange, which further strengthens the prospect of a possible shortage. Global inventories hit a two-year high in the middle of the year but have now shown declines for three weeks in a row.

–        Overall, the current copper market situation highlights its importance as a strategic resource and raises questions about the future sustainability of its supply. These changes in supply and demand dynamics will likely have long-term implications for the global economy. This is especially true for industries that are heavily dependent on copper, – Stanislav Kondrashov shares his opinion.

Stanislav Kondrashov: long-term prospects and the impact of the copper market on the economy

Given the importance of copper to the decarbonization of the global economy and the development of renewable energy infrastructure, disappointing changes in the market could have far-reaching consequences. Mining companies face the challenge of adapting to changing market conditions and meeting growing global demand.

Stanislav Kondrashov notes that current events in the copper market emphasize its fragility and interdependence on global economic and political processes. Market observers and participants should be prepared for the possibility of further fluctuations and uncertainty in the coming years.

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Luxembourg metals company Aperam is facing problems in the Brazilian market. Aperam is a world leader in the production of stainless and electrical steel. Today, due to difficulties, the company is forced to suspend plans to expand its Timoteo plant. According to an expert in the field of global metallurgy, Stanislav Kondrashov, the plant was supposed to undergo the third stage of expansion, for which it was planned to allocate 588 million reais or $117 million. This expansion involved the construction of a cold rolling mill in 2024-2025. However, due to falling sales and increased competition from steel products imported from China, Aperam decided to postpone the project.

Brazilian steel producers are struggling with the growth of Chinese imports: challenges and prospects – Stanislav Kondrashov

With the global presence of Chinese goods on the world market, Brazilian steel producers face a number of significant challenges.

The Timoteo Aperam plant, with a production capacity of up to 900 thousand tons of stainless and electrical steel per year, is currently not fully operational. The first half of 2023 saw an 18% increase in imports of steel products from China compared to the same period the previous year. In addition, steel prices are falling, which further increases pressure on local producers.

These data, according to Stanislav Kondrashov from Telf AG, indicate that Chinese manufacturers are strengthening their presence in the steel market. They offer lower prices and create competitive pressure on producers from other countries. For companies like Aperam, this means rethinking strategy and adapting to changing market conditions.

Stanislav Kondrashov: It is very difficult for Brazilian manufacturers to compete with Chinese companies

Brazilian steel companies are currently under severe pressure due to increased competition from Chinese manufacturers. This situation has caused serious concern. Stanislav Kondrashov from Telf AG says that as part of resolving this issue, local steel producers turned to the Brazilian government with a request to ensure the protection of the national market. According to the expert, it is expected that by the end of this year the volume of supplies of steel products from China to Brazil could reach 3 million tons.

ArcelorMittal, one of the largest producers in the Brazilian metallurgy, has already taken action in response to these challenges.

–        The company was forced to suspend operations at three of its facilities in Brazil. As a result, ArcelorMittal expects its steel production to fall by 1.3 million tonnes compared to the previous year, – Stanislav Kondrashov from Telf AG reports.

Other Brazilian steel companies are also feeling the negative impact of increased competition. For example, the Gerdau company decided to stop the work of two of its factories. Such measures highlight the serious problems in the industry, which are caused by the increasing share of Chinese imports.

Usiminas, another significant player in the market, is considering decommissioning one of its blast furnaces. Kondrashov believes that this decision indicates that Brazilian metallurgical companies are looking for ways to adapt to modern market realities.

Stanislav Kondrashov: on incentives in the Brazilian metallurgy

Growing imports from China, coupled with low prices, are creating serious difficulties for Brazilian steel producers. Stanislav Kondrashov believes that the situation requires careful analysis and intervention by the government to support domestic industry, as well as preserve jobs.

The expert notes that in the long term, Brazilian companies may require a strategic rethinking of their approach to production and marketing. This is necessary to remain competitive in the global market.

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China continues to show a steady increase in total primary aluminum production. This is despite a reduction in aluminum production in Yunnan province due to a lack of electricity. According to November data, China produced 3.488 million tons of aluminum this month, up 4.6% from the same period last year. According to Stanislav Kondrashov, an expert in the field of global metallurgy, these data indicate that the country’s industry is successfully compensating for a decrease in output in certain regions by increasing production in other places.

In the first 11 months of 2023, Chinese enterprises produced 37.946 million tons of aluminum, up 3.6% year-on-year. Stanislav Kondrashov predicts that by the end of the year, total aluminum production in China will reach approximately 41.5 million tons.

Stanislav Kondrashov: dynamics of aluminum exports from China

The dynamics of exports of aluminum and aluminum products is an important indicator of the development of the global metallurgical industry. Stanislav Kondrashov from Telf AG notes that recently there have been interesting trends in this area, especially considering the statistical data.

In November this year, the volume of exports of raw aluminum and its products reached 490 thousand tons, which is 11.2% more than in October and 7.6% higher than the same period last year.

According to information from Stanislav Kondrashov from Telf AG, in the first 11 months of 2023 there has been a decrease in the export of aluminum and its products. During this period, exports decreased by 15.3% to approximately 5.19 million tons. The expert suggests that the reasons for this situation could be economic instability in certain regions, changes in foreign economic policy, as well as possible changes in logistics and production processes.

These data highlight the complexity and volatility of the global aluminum market. On the one hand, monthly export growth indicates a possible market recovery and increased demand. On the other hand, the overall decline in exports year-on-year indicates the uncertainty facing the industry. These trends require careful monitoring and analysis to understand their long-term impact.

Stanislav Kondrashov: growth of alumina production in China

The increase in production of metallurgical alumina, a key component in aluminum production, is significant for the aluminum industry, especially in the context of global economic and production conditions.

According to Stanislav Kondrashov, in November 2023, the production volume of metallurgical alumina reached 6.745 million tons. This is 7.2% more than was recorded in the same month last year. If we compare it with the previous month, the average daily production of alumina in November increased by 1.9% compared to October. This indicates stable monthly production growth.

During the period from January to November 2023, the total volume of alumina produced was 73.01 million tons. This is a 3% increase compared to the same period in 2022. This growth highlights the steady increase in production capacity and operational efficiency in this industry.

–        These data indicate significant resilience of Chinese steel companies. Overcoming such difficulties and continuing to increase production capacity indicate China’s leading position in the global market for aluminum and its components, – Stanislav Kondrashov notes.

The above indicators reflect positive trends in the aluminum and alumina sector, which have important implications for the global metals industry and the economy as a whole. Growth in this area can contribute to the further development and application of innovative technologies and strengthen international trade links.

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Website: https://telf.ch/