Aluminum- A Question of Supply & Demand

Underpinning this update is news coming out of Tokyo of a record premium price paid by two Japanese buyers for bulk Aluminum through the London Metal Exchange (LME) which is due to be shipped in the October-December Quarter by British-Australian mining giant Rio-Tinto Ltd. Sources close to the negotiations say that Rios offer of $420 per tonne beat other producers offer of between $435 and $460 from suppliers such as Alcoa.

 

This comes of the back of American Alcoa Inc’s  April report that global aluminum demand will exceed production this year, putting an end to nine years of surplus supply of Aluminum driven by high Chinese production. Naturally this excess supply lowered global prices, which for an industry worth $90Billion dollars a year globally will see its impacts felt right throughout the global economic system.

Further driving this global market phenomenon is the closure of many smelters despite forecasts for global Aluminum consumption to increase by 7% throughout the year 2014, with a lot of this stemming from Aerospace and automobile industries.  The closure of smelters outside of China, in particular Japan, USA and Europe.

 

The properties that make aluminum a metal so useful are its lightness, corrosion resistance, non-magnetic, non-toxic, good reflector of light waterproof and odorless, very ductile and also cheap comparing to other alloy.

As a world leader, Shanghai Metal Corporation (SMC) offers Aluminum in various type and size with offices and subsidiaries located throughout  Asia, Europe, Australia, and the Americas. More information on aluminum can be found on our website here. Be sure to join the conversation in our LinkedIn group, Facebook, Twitter & Tumblr. You can also scan the QR code below with your smart device to connect with us on these platforms.

 

Dominick F.//SMC Editor

Sources; Reuters; Bloomberg; Wikipedia; Yahoo! Finance; Cedar Recycling

#BuildingValueAcrossTheGlobe

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Shanghai Pilot Free Trade Zone – Celebrating The First Year Anniversary

It has been almost a year since the China (“China (Shanghai) Pilot FTZ”) was formally launched. With high expectations that the new free trade zone would be the new Hong Kong or Singapore, the FTZ pioneers an unprecedented degree of openness in relation to foreign investment and international trade in both goods and services.

The FTZ has drawn great attention from the market, resulting in thousands of companies registered in the 28 square kilometers areas of the city. Close to the Shanghai’s existing financial service hub in Lujiazui, the current home of Shanghai Stock Exchange, HSBC and numerous other financial institutions in the city, a number of international bankers, lawyers, new ventures have settled within the FTZ, encouraged to be established to further facilitate overseas investment.

These institutions follow the objective of promoting and leading the development of an open Chinese economy. The efforts to create a new financial hub, however, has been facing some challenges as the government is itself still assessing its options, as well as regulations that allow foreign investment in banks and other financial companies.

Although some barriers to foreign investment such as real-estate brokerages, internet cafés, rail freight transport, wholesale trading, health care investment were removed, many foreign investors initially were disappointed by the so-called “negative list” of closed sectors. The “negative list” approach means that all sectors will be opened up, except those specifically excluded by law e.g. industries ranging from finance to property to entertainment and media. Officials said at the time that the list would be shortened in 2014.

As part of the next big wave of Chinese economic reforms, the FTZ’s guideline underlying the physical trade is easier to understand. It refers to (1) the trade relationship between the FTZ and abroad, which goods can freely exit from and enter into China free of customs supervision and (2) the relationship between the FTZ and the rest of mainland China, which movements of goods shall be subject to applicable taxes and regulation.

The challenge, for instance, is associated to guidelines when applied in the financial industry. According to the report published by JP Morgan, the government is unlikely to make an aggressive move in reforming the financial market.

In this sense, there remains significant uncertainty about how the experiment will work in practice — in particular, whether companies registered in the zone can benefit from the looser policies nationwide or only within the boundaries of the FTZ.

From what it’s been looking like since the last year, the FTZ is not a simple trial zone for financial liberalization. At the heart of the reform is to redefine the relation between the government and the market, said the JP Morgan report, “We’re crossing the river by feeling the stones”, Ms. Sun, general manager of Ganjie Business Registration Agency, summarized.

Shanghai Metal Corporation is an integrated global manufacturer, exporter, and supplier with offices and subsidiaries located throughout Asia, Europe, and the Americas. Our company manufactures an array of value-added Metal Products, Building Systems, Shipping Containers, and Machinery. To learn more about our metal products, please visit our website. Please also follow us on Twitter, Facebook and LinkedIn. Try also our new mobile application by scanning the QR code below.

You can also read more articles by our team at SMC: 

Understand The U.S. Energy System By Energy Source

Four Our Brazilian Readers: A Indústria Siderúrgica Torna-se Global

The Steel Industry Is Becoming Global

Russian Billionaire Sells 10% Stake of His Holding Company

More Women Needed In The Mining Industry

Mining Industry Market Analysis

The Case of Corruption Scandals in China

Good News For China’s Steel Sector

In Economic Turmoil, Environment Remains Key

South Australia Set To Open The Biggest Australian Copper Mine In The Country

China’s Coal Prices

Traditional Business Norm Still Powerful In Digital Age

Ethiopia; Export Extraordinaire

Monopolistic Concerns for the Iron Ore Market

THE WORLDWIDE MINING EQUIPMENT MARKET IS LOOKING UP

SMC #BuildingValueAcrossTheGlobe

Source: deloitte.com, forbes.com, ft.com, online.wsj.com, china-briefing.com

Pictures: businessspectator.com.au, online.wsj.com, yahoo.com

Camilla G.//SMC Editor

Shanghai Metal Corporation Presents Our August Interns

Shanghai Metal Corporation is happy to welcome our August International Interns. Here at Shanghai Metal Corporation, we are always looking to improve and to innovate our products and services for our global clientele. In order to grow and expand our expertise, we rely on people from all over the world to bring us new ideas and new perspectives.

We are proud to say that our August interns come from different countries and various walks of life. Their intensive educational and work experience will bring a new dynamic to our company. Shanghai Metal Corporation’s Internship Program was created to teach and cultivate the world’s future business leaders. Our August Interns will be trained in International Trade and International Marketing by our professional teams.

Sweden/Brazil

India

Canada

United Kingdom

Finland

Shanghai Metal Corporation cannot wait to see how our international interns will contribute to our company and to our clients. We have no doubt that each one will thrive in Shanghai Metal Corporation’s dynamic, multicultural environment.

Want to gain an international working experience in Shanghai? Apply to Shanghai Metal Corporation’s Internship Program and send a copy of your Resume or CV to hr@shanghaimetal.com.

Written by:

Alexis Ty // SMC Editor

International HR Consultant

Reasons Why You Should Import From China

With the depression of steel prices on the global market, steel has become less expensive. In many cases, raw steel is imported from China and the local metal manufactures then complete the process and sell locally. Demand however, currently doesn’t match output, which creates a buyer’s market for steel. China, therefore is a highly attractive market, price is the major reason for the high import demands from China, but other reasons include:

Depressed prices. Again, Chinese steel manufacturers often have overproduced product in comparison to the global demand. This has caused a depression of steel prices for both foreign and domestic steel. With relaxed tariffs in the US, the cost of imported steel is still less than that of domestic manufacturers and steel mills.

Over ordering. Having a lot of raw material sitting around has the potential to work to your benefit. China’s steel industry has started to slow down their production, but the raw material has already been acquired and is costing manufacturer’s overhead costs just to keep it.

High-quality. China’s government has recently tightened up their regulations concerning steel mills, closing many that couldn’t maintain the minimum standards set. This has left the companies that are still in business taking a greater concern on the quality of their products and manufacturing methods.

Excellent customer service. With the slowing down of production, China’s steel manufacturers are fighting harder over a smaller market share and offering inducements to get your business. One of the primary inducements they can offer is excellent customer service and keeping current and potential customers happy and satisfied.

Price locks. Taking the worry out of a fluctuating market price helps raw steel importers control their bottom line. Instead of waiting for the price to creep down, inhibiting manufacturing while waiting for the price to bottom out, you can plan ahead for costs by ordering now, at the current rate, and having the steel shipped to your facility on your schedule.

Dependable shipping schedules. With the accumulation of raw materials, scheduling your order becomes easier. The Chinese companies already have the material for your order in stock and can begin work on it, immediately. This allows for planned ordering and shipping without having to worry about the global market availability.

Modernized facilities and an emphasis on increasing economic output have made China an attractive market. Cheap shipping and a ready supply of materials will keep Chinese steel flowing into global marketplaces.

 Jessica R // Editor SMC

Применение алюминиевой фольги для консервирования продуктов

Алюминий начали широко применять при изготовлении аппаратуры для производства и хранения крепкой азотной кислоты, пероксида водорода, органических веществ и пищевых продуктов благодаря его высокой коррозионной стойкости и нетоксичности.

Алюминиевая фольга стала очень распространенным упаковочным материалом, так как она гораздо прочнее и дешевле оловянной. Также алюминий стал широко использоваться для изготовления тары для консервирования и храпения продуктов сельского хозяйства. Но хранение не ограничивается маленькими баночками, алюминий используется для строительства зернохранилищ и других быстровозводимых сооружений, востребованных в сельском хозяйстве.

Также широко алюминий применяется в военной промышленности при строительстве самолетов, танков, артиллерийских установок, ракет, зажигательных веществ, и дл многих других целей в военной технике.

Широкое применение алюминий высокой чистоты находит в таких новых областях техники как ядерная энергетика, полупроводниковая электроника, радиолокация.

Большое распространение алюминий получил как антикоррозийное покрытие, он прекрасно защищает металлические поверхности от действия различных химических веществ и атмосферной коррозии.

Egor T.//SMC Editor

Dispute Resolution Moves To Stabilize World Copper Prices via Indonesia

According to the London Metal Exchange on Monday 28^th July 2014 world Copper prices appear to have stabilized despite rising global demand putting inflationary pressures on the price. This is a direct result of the American natural resource company Freeport-McMoRan who has an industry leading global portfolio in mineral assets, significant oil and gas resources and a growing production profile. Yesterday Freeport was able to settle a six month long tax dispute with the Indonesian government, allowing for the resumption of Copper exports from major Indonesian mines such as in the Grasberg mineral region in West Papua (containing approximately 35.6 billion pounds of Copper) to key global Copper consuming nations such as China and India. Freeport-McMoRan is expected to export approximately 756,000 tonnes of Copper in the second half of 2014.

Settlement of this on-going tax dispute has doused the predominately bullish global Copper market in cold water despite sturdy factory growth in both China and the Euro-zone strengthening the overall world demand for Copper ore throughout the month of July. Additionally, economic data from Beijing has confirmed that the Chinese economy has weathered the economically choppy first half of 2014 and is expected to return to calmer waters where economic growth and expansion can really regain traction. This emphasizes that the Copper industry is finally solidifying its expected movement away from a demand-basis and more toward supply-surplus, ultimately stabilizing the previous up-and-down nature of world Copper prices throughout the first half of 2014.

Furthermore, the London Commodity Futures Trading Commission has highlighted that global Long-positions of Futures and Forward contracts on Copper have peaked at an eight year high and have begun their descent into a predominately short-positions as world Copper supply moves into surplus, relieving excess demand and putting deflationary pressures on Copper prices. This is particularly so on the back of the news of Indonesia re-initiating their exports to major international Copper consumers such as China via Freeport-McMoRan.

Shanghai Metal Corporation stocks a wide selection of Copper-related products and raw materials for all your construction or manufacturing needs. Please take the time to browse our online catalog at: http://www.shanghaimetal.com/Copper–tpl3.html.

Zenn B.//SMC Editor

Traditional Business Norm Still Powerful In Digital Age

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Social Media Era

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In the era of social media and interconnectivity of people through smartphones, it is easy to think you are always connected or can easily reach others through the internet. However, a website address or a person’s LinkedIn account is easily lost in translation if a person does not have something tangible to remind them to reconnect after the meeting. Regardless of the all technology in everyday life, there is still a need for adding a personal touch, such as a business card, to your networking strategy.

In today’s day and age many professionals are bombarded with emails and many are left unread.  Business cards can be a creative and tangible reminder of the connection created.  So why not make your brand stand out with a premium stainless steel business card? When meeting in person, networking with business cards is an affordable approach to reconnecting in the future after your initial meeting.

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A business card attracts attention and showcase personality.

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The creative stainless steel design portrays more than just your contact details but also adds a persona to the company brand. With highly saturated markets that are hard to penetrate you must ensure that you stand out from your competitors. Don’t follow the crowd strive to be modern, sharp and elite.

The powerful team at Shanghai Metal Corporation has the technology and resources to help make this idea reality.  Act now and contact us for further information and start seeing the results.

Citation: Notes on Design . (2014). Sessions. Retrieved July 8, 2014, from Why Business Cards Still Matter in the Digital Age: http://www.sessions.edu/notes-on-design/why-business-cards-still-matter-in-the-digital-age

Ashley G. // Editor SMC

Алюминий в авиа и электротехнической промышленности.

В настоящее время алюминий и его сплавы применяют во многих областях промышленности и техники. Прежде всего алюминий и его сплавы используют авиационная и автомобильная отрасли промышленности. Широко применяется алюминий и в других отраслях промышленности: в машиностроении, электротехнической промышленности и приборостроении, промышленном и гражданском строительстве, химической промышленности, производстве предметов народного потребления.

В авиапромышленности алюминий стал главным металлом благодаря тому, что его использование позволило решить задачу уменьшения массы транспортных средств и резко увеличить эффективность их применения. Из алюминия и его сплавов изготовляют авиаконструкции, моторы, блоки, головки цилиндров, картеры, коробки передач, насосы и другие детали.

В электротехнической промышленности алюминий и его сплавы применяют для изготовления кабелей, шинопроводов, конденсаторов, выпрямителей переменного тока. В приборостроении он используется при производстве кино- и фотоаппаратуры, радиотелефонной аппаратуры, различных контрольно-измерительных приборов.

 

EGOR T. // SMC Editor

Ethiopia; Export Extraordinaire

Although it is the second most populous country in Sub-Saharan Africa, Ethiopia has the lowest ratio of merchandise exports to GDP in the world. Historically, Ethiopian industry has been unable to develop into a world player, held back by a variety of economic problems. This is now changing however, as a World Bank report published this week reports positive statistics.

Ethiopia’s development model is partly inspired by the East Asian experience that realised high economic growth through the development of new export sectors and government-led development investments. Benefiting from a global commodities price windfall in the 2000s, Ethiopian exports grew at one of the highest rates in Sub-Saharan Africa. In tandem, GDP grew 9.7% in 2012/13.

According to this study, a large part of this comes from the comparative advantage Ethiopia possesses in over 80 goods and services in Africa. Many of these, such as horticultural goods, sesame seeds, soy beans and footwear, have seen considerable export growth over the last year. Ethiopia’s nascent manufacturing industries are also beginning to grow rapidly from a low base, after being positively affected by changes in the global trade regime and
the introduction of new trade preferences.

Exports and imports of goods and services as a share of GDP increased from 37.5 percent in 2001/02 to 48.7 percent in
2011/12. This figure remains low, though, considering the projected growth curve, so it is safe to assume that it can only go up from here. The major investor in Ethiopia today is China,  which which the value of trade topped $200bn last year.

Indeed, China is completing changing the dynamics of trade within the entire region. Premier Li toured 4 major East African nations last year, where he renewed an offer of $20bn in loans to Africa between 2013 and 2015. In Ethiopia, Chinese firms have invested heavily in recent years with their worth swelling well over $1bn in 2014, according to official figures. Beijing is also a key partner in Ethiopia’s bid to expand infrastructure such as roads, railways and telecom services.

The growth of Ethiopia thus, looks to signal a change in global trade patterns, with a new axis of development avoiding Western nations altogether. Rarely has such growth been sustained, yet the future looks bright for now, particularly in light of the slow and asymmetric recovery in the EU & US. The core of this growth will require steel, particularly the construction industry, which accounted for 25% of all economic activity in China over the last 10 years. Chinese steel firms eager to develop relations with this part of the world to fulfill this promise mutual growth.

For more information about SMC, follow us on twitter @Shanghai_Metal

Lloyd P.//SMC Editor

 

 

 

Shanghai BRICS Bank Signals Bright Future

This week the leaders of the developing world met to announce a massive new project. Like Bretton Woods 65 years, the creation of a new global bank is sending shockwaves across every country. The BRICS development Bank, to be situated in Shanghai, will serve the purpose of financing new projects across the emerging continents as well as acting as a soverign relief fund.

The leaders of the 5 BRICS countries – Roussef of Brazil, Putin of Russia, Zuma of South Africa, Modhi of India and Xi of China – met in Fortaleza, Brazil, to announce the launch of this $100bn project. These 5 nations together account for 21 percent of global economic output and have contributed more than 50 percent of world economic growth in the past decade. The hope now is that they will also possess a financial institution to rival the western powers’ IMF and World Bank.

 

 

 

 

 

 

A statement from Russian President Putin that the creation of the bank would ‘help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies’. In other words, the hegemony of the west is being challenged and eroded in, primarily, the financial world, and, by consequence, the geopolitical world.

The news provides markets across the developing world that their governments have direct control over their economic interests in the global setting. For the Steel industry, this may mean an improvement in integration across the developing nations, with trust being built to improve cross border transactions.

metallic coated steel department, SMC
galvanized-steel.shanghaimetal.com
galvalume-steel.shanghaimetal.com

 

Lloyd P.//SMC Editor