Major European rolling mill cancelling 5xxx orders
EUROPE ROLLING MILL ALERT. Various European producers of both rolling slabs and flat rolled products have started contacting their customers advising of possible delivery problems due to the magnesium shortage; could lead to a wave of Force Majeure declarations.
One European rolling mill has approached customers unilaterally cancelling the supply of 5xxx alloy sheet and offering to renegotiate the terms to continue supplying.
The Magnesium crisis has reached producers of other slab, which some of them have also cancelled their deliveries through Q4 of this year.
By Bloomberg News
(Bloomberg) — Scarcity could generate sharp upside spike
risk in aluminum prices ranging from 15% to 25%, Goldman Sachs
Group says, citing historical price spikes since 1980.
* “On top of growing cost pressures, the aluminum market has
tightened markedly and, like gas before it, is approaching the
potential for scarcity pricing conditions, particularly in
China’s market,” analysts including Nicholas Snowdon wrote in
note dated Tuesday.
* Global primary aluminum market is expected to swing to a 1-
million-ton deficit this year from 1-million-ton surplus last
year as China’s power crisis becomes more acute and policy cuts
more aggressive
* Goldman estimates just under 3-million-ton/year smelting
capacity has been suspended in China amid power rationing,
policy cuts; Risks are skewed toward further supply rationing in
near term given pressure on power system ahead of winter demand
* The potential for removal or cuts to China’s 13% aluminum
semis export rebate also skews near-term price risks to upside,
as any cut will be fed into the incentive being transferred into
ex-China aluminum prices
* Goldman continues to hold a 12-month aluminum price target of
$3,200/t
* READ: Aluminum Hits $3,000 for First Time in 13 Years on
Supply Snarl
Major European rolling mill cancelling 5xxx orders
EUROPE ROLLING MILL ALERT. Various European producers of both rolling slabs and flat rolled products have started contacting their customers advising of possible delivery problems due to the magnesium shortage; could lead to a wave of Force Majeure declarations.
One European rolling mill has approached customers unilaterally cancelling the supply of 5xxx alloy sheet and offering to renegotiate the terms to continue supplying.
The Magnesium crisis has reached producers of other slab, which some of them have also cancelled their deliveries through Q4 of this year.
By Bloomberg News
(Bloomberg) — Scarcity could generate sharp upside spike
risk in aluminum prices ranging from 15% to 25%, Goldman Sachs
Group says, citing historical price spikes since 1980.
* “On top of growing cost pressures, the aluminum market has
tightened markedly and, like gas before it, is approaching the
potential for scarcity pricing conditions, particularly in
China’s market,” analysts including Nicholas Snowdon wrote in
note dated Tuesday.
* Global primary aluminum market is expected to swing to a 1-
million-ton deficit this year from 1-million-ton surplus last
year as China’s power crisis becomes more acute and policy cuts
more aggressive
* Goldman estimates just under 3-million-ton/year smelting
capacity has been suspended in China amid power rationing,
policy cuts; Risks are skewed toward further supply rationing in
near term given pressure on power system ahead of winter demand
* The potential for removal or cuts to China’s 13% aluminum
semis export rebate also skews near-term price risks to upside,
as any cut will be fed into the incentive being transferred into
ex-China aluminum prices
* Goldman continues to hold a 12-month aluminum price target of
$3,200/t
* READ: Aluminum Hits $3,000 for First Time in 13 Years on
Supply Snarl
