Argus Metal Prices. North American market prices, news and analysis. Contents. Issue Monday 18 December 2017

Transcription

1 North American market prices, news and analysis Overview A surge in LME nickel prices lifted stainless steel scrap prices and negated downward pressure from lower European ferro-chrome prices. The Argus daily HMS 1/2 (80:20) cfr Turkey assessment was little changed at $359.20/t as a US supplier's sale was offset by several Baltic and European deals. US spot premiums for special high-grade zinc held at 8-10 / lb for a second week amid rising exchange prices. The Comex copper prices rose to $3.146/lb to continue a rally that started a week earlier amid a weaker dollar. News Viewpoint: China s steel exports unlikely to rebound SDI expects higher 2018 steel demand, prices Liberty House to restart South Carolina mill China cuts some steel export taxes Great Lakes drives US raw steel output higher Contents Commentary 2 News 5 Markets 9 Markets Key prices Stainless steel scrap 304 (18-8) solids del US processor 18 Dec solids del US processor 18 Dec Aluminum P1020 US midwest premium 13 Dec nc P1020 US midwest transaction 18 Dec US billet price del US 18 Dec /10 extrusions scrap del US 12 Dec Scrap cans (UBCs) del US 13 Dec A380.1 secondary alloy del US 14 Dec Zorba cif China 15 Dec Copper, brass del US Cathode grade A premium 13 Dec nc Cathode grade A transaction 18 Dec Bare bright scrap cash spread 13 Dec Bare bright scrap spot price 18 Dec #1 wire and tube scrap cash spread 13 Dec #1 wire and tube scrap spot price 18 Dec Brass alloy scrap, Cu next active spread 13 Dec nc Brass scrap C260 transaction price 18 Dec Steel feedstocks HMS 1/2 80:20 cfr Turkey 18 Dec Iron ore fines 62% Fe cfr Qingdao 18 Dec HMS 1/2 80:20 cfr Taiwan 15 Dec HMS 1/2 80:20 fas Los Angeles 15 Dec Shredded scrap fas New York 15 Dec Pig iron basic cfr New Orleans 15 Dec Ferro-alloys fob North America Molybdenum 65% Mo, Mo 14 Dec Titanium 70% Ti 14 Dec Chrome HC 60-65% Cr, Cr 14 Dec Manganese HC min 80% Mn $/lt 14 Dec nc Minor metals Antimony min 99.65% cif 12 Dec Indium ingot 99.99% fob $/kg 12 Dec Silicon % Si fob 14 Dec Titanium 85% Ti non-tin turnings 14 Dec nc Titanium 6Al 4V aero turnings 14 Dec Zinc prices Zinc special high grade premium 18 Dec nc Zinc special high grade transaction 18 Dec Nickel prices Cathode 4x4" (truckloads) premium 14 Dec nc Cathode 4x4" (truckloads) transaction 18 Dec Incorporating MetalPrices.com, Argus Weekly Heavy Melt and Ferrous Scrap Price Index

2 Notice MetalPrices.com has transitioned to Argus Metal Prices and provides North American coverage of the metals industry. The platform features: Over 300 global price assessments Exchange data from the LME, CME (COMEX and NYMEX) and SHFE Breaking news from all metals markets keeping you up to date In-depth analysis and market commentary Please contact with any queries. Stainless steel scrap prices del US processor Low High ± 304 (18-8) solids (18-8) turnings solids turnings Ferro-chrome prices fob US Low High ± HC min 60-65% Cr 6-8% C fob US warehouse LC min 60-65% Cr 0.05% C max 1.5% Si fob US nc LC min 60-65% Cr 0.10% C max 1.5% Si fob US nc LC 60% Cr 0.15% C fob US warehouse nc Charge chrome fob US warehouse nc Commentary US stainless: Scrap prices rise with LME nickel A surge in LME nickel prices lifted stainless steel scrap prices Monday and negated downward pressure from lower European ferro-chrome prices. The European ferro-chrome benchmark for the first quarter of 2018 was set at $1.18/lb, dropping by 21 /lb from the fourth quarter. This led some stainless steel traders to believe that it would pressure scrap prices lower. But a 3pc increase Monday of three-month LME nickel prices reversed sentiment and triggered a 1 /lb increase in scrap prices. Three-month LME nickel prices rose to $11,595/metric tonne (t) Monday, up by $345/t from Friday. Argus assessed processor buying prices for single truckloads of 304 stainless scrap solids at /lb Monday, up from /lb Friday, and 304 turnings were assessed at /lb, up from /lb. Processors were reluctant buyers and will remain cautious until they receive firm indications from US stainless steel mills on requirements and prices for January. Based on the first quarter benchmark ferro-chrome price of $1.18/lb, US mills are expected to pay approximately 85 /lb for the intrinsic value of chrome in stainless. Processors now await the values for nickel, ferrous and molybdenum. Argus assessed 316 scrap solids at /lb Monday, up from /lb Friday, and 316 turnings at /lb, up from /lb. Processors increased nickel-bearing scrap prices to boost material flow as many dealers have chosen to hold material in Zinc prices del US Low High ± Special high grade zinc premium Old zinc diecast scrap hopes of higher prices in the first quarter of Turkey ferrous: Mills resist $360/t cfr Turkish deep-sea ferrous scrap import prices were little changed Monday as a US supplier's sale above the equivalent of $360/t cfr Turkey on an 80:20 basis was offset by several Baltic and European deals concluded below this level. The Argus daily HMS 1/2 (80:20) cfr Turkey and HMS 1/2 (75:25) fob Rotterdam steel scrap assessments both increased by 50 /metric tonne (t) to $359.20/t and $334.20/t, respectively. A US supplier sold a Canadian-origin cargo containing 13,500t of shred and 16,500t of bonus at an average price of $370/t cfr Iskenderun for late January/early February shipment on 15 December. The premium HMS 1/2 (80:20) value of this cargo is $362.30/t cfr Turkey. Still, Turkish mills are resisting paying European and Baltic suppliers the US-deal price on the basis that several suppliers from these regions sold cargoes on the same day at the equivalent of below $360/t cfr Turkey. A St Petersburg supplier sold HMS 1/2 (80:20) at $356/t and bonus at $366/t cfr Iskenderun for early to mid-february shipment on 15 December. A second St Petersburg supplier sold HMS 1/2 (80:20) at $351/t and bonus at $361/t cfr Iskenderun for end of January shipment on 15 December. A Baltic supplier sold HMS 1/2 (80:20) at $356/t and bonus at $366/t cfr Iskenderun for early February shipment on 15 Page 2 of 14

3 December, market participants said. Three continental European/UK cargo sales were also concluded for Iskenderun mills on 15 December, market participants said. A continental European supplier sold 20,000t of HMS 1/2 (75:25), 15,000t of a mix of P&S and #1 HMS, and 5,000t of new cuttings at an average price of $357/t cfr Marmara on 15 December, market participants said. US exporters are now targeting $ /t cfr Turkey for premium HMS 1/2 (80:20) for February shipment. A US supplier that regularly ships two to three cargoes to Turkey each month has still not concluded any bookings for January shipment and may only offer February shipment to Turkish mills because of January shipment sales secured to other overseas destinations. Still, Turkish mills will need to sell large volumes of rebar to export markets in the next week before they show interest in the new US target scrap prices, market participants said. US zinc: Premium flat as transaction price rises US spot premiums for special high-grade zinc held unchanged for a second week amid rising exchange prices. Argus assessed US high-grade zinc premiums unchanged at 8-10 /lb in the latest week. With premiums plat, the transaction price rose by $99/t in step with a rise in LME prices Monday. Spot demand remains weak but participants expect spot premiums to rise in the first quarter as stocks continue to fall amid improving economic growth in the US, China and Europe. Three-month LME zinc price strengthened to $3,201/metric tonne (t) Monday, up from $3,102/t a week earlier. LME zinc prices are up by 24pc from the start of the year. Declines in LME stockpiles have supported exchange prices but have had little effect on spot premiums thus far. LME zinc warehouse stocks have dropped for 23 successive trading days and have dropped on 44 of the last 45 days. LME stocks are now at 191,900t, its lowest levels since 27 November 2008 when stocks were at 190,875t. The zinc deficit continues to climb as consumption grows while production stays relatively unchanged. The global zinc market was in a deficit of 504,000t in January-October, compared with a deficit of 202,000t for the whole of 2016, according to data from the World Bureau of Metal Statistics (WBMS). Global refined zinc production increased by 0.1pc and consumption grew by 2.5pc, compared with the first 10 months of last year. Global zinc production has remained tight after Switzerland-based commodities company Glencore halted 500,000 t/yr of zinc in concentrate capacity in October 2015, when zinc prices hit a six-year low. Glencore announced last week that it will restart output at its Lady Loretta mine in Australia during the first half of 2018 and that it expects it to produce 100,000t. But the restart will not offset lost output from the company's African zinc operations that it sold earlier this year. The company said it will produce 1.090mn t of zinc in 2018, lower than the 1.105mn t it expects to produce in Global demand in the first 10 months of 2017 was up by 288,000t on the year. Chinese apparent demand was 5.6mn t, or 47pc of the global total. Chinese demand for zinc increased by 0.8pc and production of refined zinc fell by 2.2pc. Chinese smelters have suffered from supply disruptions caused by new environmental regulations and inspections earlier this year. Comex Cu: Rally persists as dollar falls The Comex copper price for the most active month rose Monday to continue a rally that started a week earlier amid a weaker dollar. Comex's most active month settled at $3.146/lb Moonday, up from $3.1345/lb Friday and the highest since 27 November when it settled at $3.1575/lb. Copper has gained for nine straight sessions. The dollar index dropped on Monday, giving back most of its Friday gains and in turn supporting copper prices. The drop may be related to the unwinding of longs as traders await the outcome of US tax reform. A weaker dollar makes copper less expensive in foreign currency terms, which tends to increase demand for dollar-denominated copper and strengthen the price. Improving economic growth with possible increases in demand from the US, China and Europe has also supported price. LME stockpiles of copper grew for a second day, up by less than 1pc on Monday but remain 40pc below beginning 2017 levels. New Orleans had the most brought in with 1,400t followed by 275t into Port Klang, Malaysia. The global copper market was in a supply surplus of 5,700t in January-October, down from a deficit of 102,000t for the whole of 2016, according to the World Bureau of Metal Statistics (WBMS). Chilean production fell as a result of lower concentrate Page 3 of 14

4 feed because of strikes, power outages, lower-than expected ore grades, technical issues and severe weather conditions. Global copper consumption for January-October was down by 0.4pc at 19.49mn t. Chinese consumption in January-October rose by 35,000t on the year to 9.68mn t. This constituted nearly half of global demand, WBMS said. Chinese copper demand has been driven by solid growth in the manufacturing, transportation and construction sectors. US stainless steel scrap L: LME Nickel cash official seller R: 304 solids del US processor Oil futures: WTI falls as US crude output rises Nymex crude futures fell amid forecasts by the US Energy Information Administration (EIA) of further output gains from the key shale basins. Nymex January light sweet crude futures decreased by 14 /bl to $57.16/bl. Ice February Brent rose by 18 /bl to $63.41/bl. The February Brent-February WTI spread widened by 29 /bl to $6.19/bl. Crude output from the top US shale basins is expected to rise by 94,000 b/d to 6.4mn b/d in January, according to the US Energy Information Administration (EIA). The Permian basin in Texas and New Mexico will continue to account for the bulk of the increase, the EIA said in its latest monthly Drilling Productivity Report (DPR). Permian basin production should rise by 68,000 b/d from December to January about 2.79mn b/d. Production in the Eagle Ford shale in south Texas is expected to rise by about 4,000 b/d to 1.24mn b/d in January, while in the Bakken in North Dakota it should rise by 9,000 b/d to stay at about 1.18mn b/d. Brent prices have recently received support from the closure of the Forties Pipeline System (FPS), resulting in UK refiner Ineos declaring force majeure on exports of Forties Blend and which has shut in around 410,000 b/d of North Sea crude. The closure is likely to last two to three weeks. But potentially removing some of the support, Italian integrated Eni restarted production at the 100,000 b/d Goliat field in the Norwegian Barents Sea yesterday. Norway's Petroleum Safety Authority (PSA) ordered a halt to production from Goliat's floating production, storage and offloading (FPSO) vessel on 6 October, after an audit of the field's electrical safety identified "a high fault rate". Nymex RBOB gasoline futures rose by 1.77 /USG to $1.6725/ USG. Nymex ultra-low sulfur diesel (ULSD) futures gained by 2.17 /USG to $1.9252/USG Sep Oct Nov Dec 17 Steel feedstocks Oct Nov Nov Dec 17 US zinc scrap L: Ferrous scrap HMS 1/2 80:20 cfr Turkey R: Iron ore fines 62% Fe cfr Qingdao L: old diecast scrap R: special high grade US transaction 26 Sep Oct Nov Dec Page 4 of 14

5 News Viewpoint: China steel exports unlikely to rebound China s steel exports are unlikely to rebound in early 2018 as tight supplies and robust domestic demand encourage steel mills to sell products in the domestic market instead. Exports hit a record high of 112.4mn t in 2015, exceeding 100mn t for the first time. The increase came as domestic demand slumped amid a consensus view at the time that China s steel demand had peaked, with output likely to fall over the next decade. Exports edged lower in 2016 to mn t. But China s shipments have fallen sharply this year, with January-November exports down by around 31pc from a year earlier to 69.83mn t. The fall has relieved some political pressure on Beijing. The surge in Chinese exports in recent years sparked concerns from other producing countries, whose mills struggled to compete with cheaper Chinese imports. Complaints emerged from the EU, US, India, Vietnam and elsewhere, arguing that Chinese overcapacity could lead to a permanent glut of steel that would depress prices and send mills to losses across the world. The fears lead the G20 group of industrialised nations to set up a committee to tackle with the problem, despite Beijing s claims that overcapacity is a global, rather than China-specific, issue. Beijing leads the way But conditions have changed this year. The Chinese government has played a big role, helping drive the elimination of 115mn t/yr of crude steel capacity since last year and eliminating an additional 140mn t/yr of scrap-fed induction furnace steel capacity in the first half of This has help bring supply and demand much closer to balance. Steel demand, which had begun to recover in 2016 on the back of higher real estate sales, has risen further this year boosting domestic prices and eroding the incentive to export. Chinese steel mills and trading firms expect China s exports to fall again next year, but by a much smaller extent than in It is unlikely that domestic prices will be able to maintain sharp gains for another year, which would allow exports to become more competitive. And there may be limits to how much further exports can decline. Some Chinese steel exporters have already cut shipment volumes by more than half year on year so far in 2017, and may be unwilling to lose any more of their key overseas markets. These companies are looking to devise strategies to maintain exports as an insurance against any future downturn in domestic demand. Exports could fall by another 10pc next year, said the manager of a large steel trading firm. Beijing remains committed to its goal of reducing steel overcapacity and bringing Chinese demand and supply closer to equilibrium, and is not particularly concerned about exports, he added. In the shorter term, exports are also likely to come under pressure because of a fall in Chinese steel production in the winter heating season from 15 November to 15 March. Environmental restrictions have been imposed on blast furnace operations in north and east China during the period. Market shifts Market dynamics have also weighed on steel exports in recent months. Chinese exporters have been frustrated by widening bid-offer spreads in key Asia-Pacific markets such as Vietnam in the second half of this year. A large steel trading firm reported getting bids that were around $30/t lower than offers for rebar in Pakistan. Bids for rebar in Myanmar (Burma), among the largest markets for Chinese rebar, have been around $50/t lower than offers. China s high domestic prices have also allowed other suppliers, such as Russia, India, Turkey, Qatar and Iran, to make inroads into large Asian steel markets. China s hot-rolled coil (HRC) exports to Vietnam have been sidelined since October, with Russia- and India-origin material gaining market share. Recent offers of Oman-origin rebar in Hong Kong have been $40/t below export offers from mainland steel producers. HRC offers from Indian producers have been around $10/t lower than Chinese export offers in Vietnam. China s steel prices are mostly set through fixed price negotiations between buyers and sellers, although mills and trading firms are becoming more open to using indexes to price exports. Argus in September launched daily fob China steel export prices for rebar and HRC, as well as finished steel indexes on a cfr Asean basis, to allow for wider sell side participation. Long products under pressure The fall in China s exports has been more pronounced for long products because of the shutdown of induction furnaces, which mostly produced rebar, as well as strong demand for construction steel from real estate and infrastructure projects. The biggest drop in long product exports this year has been for billet, fol- Page 5 of 14

6 News lowed by rebar. Wire rod exports have been less affected. Long product exports are likely to fall further over the next five to six months as domestic demand remains stable while supplies are constrained by environmental restrictions. But Beijing s efforts to rein in soaring new home prices and prevent an asset bubble in real estate are starting to have an impact by curbing investment and price growth in large cities. These developments could slow construction steel demand in the second half of Flat product exports have been mostly stable in 2017, something that is unlikely to change next year. Manufacturing sector demand in China is stabilising, as the government focuses on the services and high-technology sectors in a bid to improve the quality of economic growth. SDI expects higher 2018 steel demand, prices US producer Steel Dynamics (SDI) forecast improved steel demand and prices in 2018 after lowering its fourth quarter sequential earnings guidance as a result of margin compression and planned outage activity in its flat-roll operations. In October, the company completed an equipment upgrade and facility expansion at its Butler, Indiana mill, and an equipment upgrade in at its Columbus, Mississippi mill. These extended outages resulted in higher costs and lower shipments in the fourth quarter, reducing anticipated earnings by $27mn. Flat-roll steel pricing during the quarter is also expected to decline more than consumed raw material costs, compressing margins. "Despite a lower sequential fourth quarter earnings result, we remain confident that macroeconomic and market conditions are in place to benefit domestic steel consumption in 2018," SDI chief executive Mark Millett said. US steel inventory levels have moderated, with the overhang from pre-232 dissipating, Millett said. Demand from the North American automotive sector is expected to be steady in 2018, and the company expects additional growth in the energy and construction sectors. Fourth quarter results at SDI s metals recycling platform is expected to be consistent with the prior quarter, as anticipated improvements in nonferrous earnings offset lower average ferrous selling prices. Long product results are expected to decline amid lower shipment volumes, pressure from imports and excess domestic long products production capacity, the company said. SDI shipped 2.28mn net tons (nt) (2.07mn metric tonnes) of steel externally in the third quarter of 2017, up from 1.91mn t a year earlier. Ferrous scrap shipments fell to 1.22mn gross tons (gt) (1.24mn metric tonnes) from 1.24mn gt a year earlier, 462,683gt of which were shipped externally. Nonferrous shipments fell to 262mn lbs from 280mn lbs. Liberty House to restart South Carolina mill British metals producer and trader Liberty House plans to begin melting and rolling activities at ArcelorMittal s former Georgetown steelworks in South Carolina in the spring of Liberty House, a subsidiary of global industrials group GFG Alliance, completed its purchase of the wire rod mill from ArcelorMittal this month. "We've already had customers contacting us about placing orders, so we're keen to get back up and running as quickly as possible," GFG Alliance executive chairman Sanjeev Gupta said. The mill includes an electric arc furnace with an annual capacity of 540,000metric tonnes (t) and a rod mill with an annual capacity of 680,000t. Steel wire produced at the facility will serve the construction and automotive markets. Formerly ArcelorMittal s primary producer of wire rod in the US, the global steelmaker idled the facility in 2015 citing the impact of imported products on the mill s financial results. US imports of wire rod products rose by 2pc to 1.42mn net tons through October compared with a year earlier, according to the American Iron and Steel Institute. In November, the US Commerce Department set final antidumping duties on wire rod imported from Russia, Belarus and the UAE. The department placed preliminary anti-dumping duties on imports of carbon and alloy steel wire rod from seven other countries in October. Market participants estimate that the mill purchased 30,000-40,000gross tons/month of ferrous scrap and directreduced iron by rail, truck and barge when fully operational. Liberty House plans to develop steel production capacity in the US through acquisitions and greenfield developments with an annual goal of 5mn t of capacity, the company told Argus. The terms of its purchase of the Georgetown mill were not released. Liberty House produces and trades ferrous and non-ferrous metals products across the value chain, from scrap metal recycling to steel production, aluminum smelting, and downstream steel products and services. Page 6 of 14

7 News China cuts some steel export taxes China s steel export duty cuts are unlikely to lift volumes as major export items do not attract any tax or get substantial rebates anyway, while firm demand will likely keep more supplies in the domestic market in the short term. The export tax on most steel billet items has been reduced to 10pc from 1 January compared with 15pc this year. The export duty on round billet has been set at 5pc. Billet export volumes have fallen the most this year of all steel products, as more of this semi-finished product is being used domestically to make long steel items. Chinese mills are looking to import more billet from Iran and Turkey as long as it makes economic sense. China s January-November steel exports fell by 30.7pc to 69.83mn t. A large volume of billet exports are in alloy billet, which are often misleadingly labelled as square bar by exporters to claim a tax rebate. The export tax on high-purity pig iron has been halved to 10pc from 20pc. The finance ministry has left the column on 2018 taxes on various grades of steel scrap blank in the official tariff list, which may imply these rates have been kept unchanged at 40pc. China s steel scrap exports rose to 1.68mn t in January- October compared with 963t in the same period last year. The shutdown of 140mn t/yr scrap-fed induction furnaces this year pushed more scrap volumes into the export market. The official tariff list does not mention any tax on export of rebar, wire rod, hot-rolled coil and cold-rolled coil, the mainstay of China s steel exports. The steel export business relies on tax rebates. As long as these are in place for major products, export volumes will be unaffected, said the manager of a Hebei-based steel mill. The export tax reductions for a few steel items are also unlikely to be of any help in making exports more competitive in several countries that levy anti-dumping duties on Chinese steel products, such as India, Vietnam, the US and the EU. Great Lakes drives US raw steel output higher US raw steel production rose by 2pc in the latest week as the Great Lakes region rebounded from a 4pc decrease in the prior week to offset declines in the midwest and west. US raw steel output increased to 1.70mn short tons (st) (1.54mn metric tonnes) in the week ending 16 December, up from 1.67mn st in the prior week, according to the American Iron and Steel Institute (AISI). Capacity utilization ticked up to 72.8pc from 71.7pc over the same period. Steel production rose by 6pc in the latest week from 1.61mn st from the same prior-year period, when capacity utilization rates were at 67.8pc. Production in the Great Lakes rose to 628,000st from 607,000st in the prior week, while output rose by 11,000st to 213,000st in the northeast. Output in the south was muted for a second straight week, rising by 2,000st to 623,000st compared with an average in the prior three weeks of 660,000st. Output in the midwest fell by 2,000st to 167,000st, and by 6,000st in the west to 67,000st. Year to date production was up by 4.3pc at 87mn st from the same prior year period. Capacity utilization climbed to 74.4pc year to date compared with 70.5pc in the same yearearlier period. AISI's raw steel production tonnage is estimated and compiled with weekly raw tonnage production provided by 50pc of domestic producers combined with monthly production data for the remainder. China's November copper output at multi-year high China's November refined copper output was at its highest since December 2014 as the country looks to increase output ahead of a potentially tighter concentrate market next year, data from the national bureau of statistics (NBS) show. Production was up on the year by 9.2pc at 786,000t in November and output for January-November was up by 9.8pc at 8.09mn t compared with the same period in The International Copper Study Group (ICSG) estimates that the copper concentrate market will be in a 104,000t deficit next year and it is likely China has ramped up output in anticipation of a fall in concentrate supply. China's imports of copper ore and concentrate were up by 2.1pc in January- November compared with the same period last year. China has also increased refined copper output as it looks to become less dependent on imports of refined copper. China's imports of refined copper in January-November were down by 4.7pc on the same period last year. Solid demand Copper demand in China has remained firm this year, driven by consumption from key sectors. Investment in real estate in China, the country s largest Page 7 of 14

8 NEWS consumer of copper, increased by 7.5pc on the year during the first eleven months. Total sales of commercialised residential buildings are up by 10.8pc year on year over the same period. China s official purchasing managers index (PMI) for manufacturing, a leading forward looking indicator, expanded in November to 51.8 from 51.6 in October, suggesting that manufacturing will remain robust in the near-term. Copper stocks on London-based metals exchange LME have fallen by 37.4pc since 3 January and totalled 195,200t on 15 December. Stocks on warrant on Shanghai-based futures exchange SHFE have dropped by 17.2pc since 6 January to 142,129t on 15 December. The fall in exchange inventories reflects the growth in refined copper demand this year. Three-month LME copper traded at $6,777/t on 15 December, up from $5,584/t on 3 January. Rio Tinto plans more driverless iron ore trucks UK-Australian mining firm Rio Tinto plans to double the number of autonomous trucks at its iron ore operations in the Pilbara region of Western Australia by the end of 2019, which will result in 30pc of this fleet being driverless once the programme is complete. The move to increase the share of driverless trucks is part of the firm s plan to boost productivity and to trim operational costs and boost cash flow. Last year, on average, each of Rio Tinto s autonomous haul trucks operated an additional 1,000 hours and at 15pc lower load and haul unit cost than conventional trucks, Rio Tinto said. About 20pc of the existing fleet of almost 400 haulage trucks in the Pilbara are autonomous haulage system (AHS)-enabled. Following the completion of the projects Rio Tinto will have more than 130 autonomous trucks. The project at the Brockman 4 operation in the Pilbara will allow the mine to run entirely in AHS mode once fully deployed, Rio Tinto said. We are studying future additions to our autonomous fleet in the Pilbara, based on value, to help deliver our share of $5bn of additional free cash flow for the company by 2021, Rio Tinto iron ore chief executive Chris Salisbury said. The retrofit programme will assist the iron ore business in delivering an additional $500mn of free cash flow annually from If Rio is able to reduce costs and boost productivity through further automation it may force rival Pilbara iron ore producers BHP and Fortescue Metals to step up their investment in autonomous trucks, while putting further pressure on smaller iron ore producers that are on average higher cost operators. Rio Tinto expects output from the mines it operates in Pilbara to reach 400mn t/yr, chief executive Jean-Sebastien Jacques said. Rio Tinto plans to produce 330mn t in 2017 and has hit an annualised rate of 360mn t during this year, as its Silvergrass mine ramps up to full production. Risk Management Data Services Expanded Introducing Argus North American Natural Gas and Electricity Implied Volatility Curves Robust, independent market valuation tools to support investment and trading decisions. For more information on Argus implied volatility curves, please contact us at moreinfo@argusmedia.com Argus Metals Week February Battery Conference February SnWTa Summit 1-2 March NiCoMo illuminating the markets Register by 15 December and save up to $350 / 350 / 300 Market Reporting Consulting Events Page 8 of 14

9 Markets Ferrous scrap prices by region (weekly) Eastern, 15 Dec Midwest, 15 Dec Southeast, 15 Dec Low High ± Low High ± Low High ± #1 HMS nc nc nc #2 HMS nc nc nc Shredded nc nc nc P&S, 5ft nc nc nc #1 busheling nc nc nc Ferrous scrap export yard buying prices del (weekly) Timing #1 HMS P&S, 5ft Shredder feed Low High ± Low High ± Low High ± Boston 15 Dec New York 15 Dec nc nc Philadelphia 15 Dec Houston 15 Dec nc nc nc Los Angeles 15 Dec nc nc nc San Francisco 15 Dec nc nc nc Seattle/Portland 15 Dec nc nc Ferrous containerized scrap prices fas port (weekly) New York, 15 Dec Los Angeles, 15 Dec San Francisco, 15 Dec Seattle, 15 Dec Low High ± Low High ± Low High ± Low High ± HMS 1/2 (80:20) nc Shredded P&S, 5ft $/gt $/gt Ferrous scrap prices (weekly) Steel feedstock prices Timing Price ± US east coast bulk (fob New York) HMS 1/2 (80:20) 15 Dec Shredded 15 Dec P&S, 5ft 15 Dec US west coast bulk (fob Los Angeles) HMS 1/2 (80:20) 15 Dec Shredded 15 Dec P&S, 5ft 15 Dec Taiwan container cfr HMS 1/2 (80:20) 15 Dec Composites del US consumer $/gt #1 HMS 15 Dec nc Shredded 15 Dec nc #1 busheling 15 Dec nc P&S, 5ft 15 Dec nc US steel feedstock prices (weekly) New Orleans, cif Brazilian basic 15 Dec Ukrainian/Russian basic 15 Dec Hot Briquetted Iron (HBI) 15 Dec Basic 15 Dec Nodular 15 Dec Chicago pig iron, del Basic 15 Dec Nodular 15 Dec Pittsburgh pig iron, del Basic 15 Dec Nodular 8 Dec nc Ferrous scrap HMS 1/2 80:20 cfr Turkey (daily) 18 Dec Iron ore fines 62% Fe cfr Qingdao (daily) 18 Dec Metallurgical Coal low-vol fob Hampton Roads (weekly) 18 Dec nc Metallurgical Coal high-vol A fob Hampton Roads (weekly) 18 Dec nc Metallurgical Coal high-vol B fob Hampton Roads (weekly) 18 Dec nc Ferrous scrap freight Bulk export New York-Turkey (weekly) Bulk export Los Angeles-South Korea (weekly) Containerised export New York- Mumbai (monthly) Containerised export Los Angeles- Taiwan (monthly) Containerised export San Francisco-Taiwan (monthly) Containerised export Seattle- Taiwan (monthly) Coal freight (weekly) Coal panamax size 75kt US east coast - Japan Coal cape size 140kt US east coast - Rotterdam 15 Dec nc 15 Dec nc 30 Nov Nov Nov Nov Timing Rate ± 18 Dec Dec Page 9 of 14

10 Markets Ferrous scrap prices del consumer $/gt (monthly) $/gt Birmingham Carolinas Chicago Cincinnati/ Indianapolis Cleveland/ Youngstown Dallas Detroit Houston/ San Antonio Philadelphia Pittsburgh Average 8 Dec 8 Dec 8 Dec 8 Dec 8 Dec 8 Dec 5 Dec 8 Dec 8 Dec 8 Dec 18 Dec #1 HMS ± nc #2 HMS ± nc #1 busheling ± nc Factory bundles ± nc #1 bundles ± Shredded ± nc P&S, 5ft ± nc Machine shop turnings ± nc Tin can bundles ± nc Ferrous scrap del foundry, specialty consumer (monthly) $/gt Timing Price ± Stainless steel scrap prices Chicago Black/foundry busheling 8 Dec Clean auto cast 8 Dec Clean fresh cast iron borings 8 Dec Ductile-quality shredded clips 8 Dec Low-alloy punchings 8 Dec #1 machine cast 8 Dec P&S, 2ft 8 Dec Cleveland Clean auto cast 8 Dec Philadelphia Black/foundry busheling 8 Dec P&S, 2ft 8 Dec Ferrous scrap dealer selling prices fob (monthly) $/gt Houston St Louis 8 Dec ± 8 Dec ± #1 HMS #1 busheling #1 bundles Shredded P&S, 5ft Machine shop turnings (18-8) solids del US processor (daily) 18 Dec (18-8) turnings del US processor (daily) 18 Dec solids del US processor (daily) 18 Dec turnings del US processor $/ lb (daily) 18 Dec /410 solids del US processor $/ gt (weekly) 14 Dec nc 430 solids del US processor $/gt (weekly) 14 Dec (18-8) scrap solids cif Rotterdam (weekly) 14 Dec nc 304 (18-8) scrap solids cif Taiwan $/ lb (weekly) 14 Dec nc Chrome contained in 304/316 stainless scrap solids del US consumer $/ 15 Dec nc lb (monthly) Iron contained in 304/316 stainless scrap solids del US consumer 15 Dec (monthly) Nickel contained in 304/316 stainless scrap solids spread del US 15 Dec consumer (monthly) Molybdenum contained in 316 stainless scrap solids del US consumer (monthly) 15 Dec Page 10 of 14

11 Markets Ferro-alloys and feedstock prices (weekly) Aluminum prices (weekly) Ferro-boron 17% B fob US warehouse Charge chrome fob US warehouse Ferro-chrome HC min 60-65% Cr 6-8% C fob US warehouse (per lb Cr) Ferro-chrome LC 60% Cr 0.15% C fob US warehouse Ferro-chrome LC min 60-65% Cr 0.05% C max 1.5% Si fob US warehouse (per lb Cr) Ferro-chrome LC min 60-65% Cr 0.10% C max 1.5% Si fob US warehouse (per lb Cr) Charge chrome 52% Cr ddp Rotterdam (per lb Cr) Manganese electrolytic metal min 99.7% fob US warehouse Silico-manganese min 65% Mn 16% Si fob North America warehouse Ferro-manganese HC min 80% Mn 6-8% C fob North America warehouse $/lt Ferro-manganese MC 80% Mn 1-2% C fob North America warehouse Ferro-molybdenum 60% Mo exworks China CNY/t Ferro-molybdenum min 65% Mo max 1.5% Si fob North America (per lb Mo) Ferro-niobium 65% Nb fob US (monthly) Ferro-silicon min 75% Si max 0.1% C fob US warehouse (per lb Si) Ferro-titanium 70% Ti fob North America warehouse Ferro-tungsten 75% W fob North America warehouse Ferro-vanadium 78-82% V max 1.5% Si fob North America (per lb V) Molybdenum oxide min 57% fob US warehouse 14 Dec nc 14 Dec nc 14 Dec Dec nc 14 Dec nc 14 Dec nc 18 Dec nc 14 Dec nc 14 Dec nc 14 Dec nc 14 Dec nc 18 Dec 97,000 99,000 nc 14 Dec Nov Dec Dec Dec Dec nc 14 Dec Aluminum premiums P1020 US midwest premium 13 Dec nc 6061 billet US premium 13 Dec nc 6063 billet US premium 13 Dec nc 6063 extrusion duty paid inwarehouse Rotterdam 13 Dec nc Aluminum mill, extruder scrap prices del US 10/10 extrusions 12 Dec & Dec nc 5052 clips 12 Dec new, bare 12 Dec truck wheels 12 Dec nc 6063 new, bare 12 Dec A356 wheels 12 Dec Cans (UBC) 13 Dec EC wire 12 Dec Litho sheet 12 Dec nc MLC 12 Dec Painted siding 12 Dec Aluminum secondary smelter scrap del US sows 14 Dec Aluminum-copper radiators 14 Dec nc High grade turnings 14 Dec Mixed 2000/7000 solids 14 Dec Mixed 2000/7000 turnings 14 Dec MLC 14 Dec Old cast 14 Dec Old sheet 14 Dec Painted siding 14 Dec nc Tweak 14 Dec Twitch 14 Dec nc Aluminum secondary alloy prices del US A Dec Dec A Dec A Dec A Dec B Dec Aluminum scrap export prices Zorba cif China 15 Dec Taint/Tabor cif Asia port 15 Dec Taint/Tabor cif China 15 Dec Tense cif China 15 Dec Stainless steel coil ex-works US (monthly) 301 surcharge Nov surcharge Nov surcharge Nov price Nov price Nov price Nov Tool steel scrap del US processor (weekly) H13 14 Dec M1 14 Dec M2 14 Dec M42 14 Dec T1 14 Dec T15 14 Dec Page 11 of 14

12 Markets Copper and brass prices (weekly) Minor metals prices (weekly) Copper cathode premiums Copper cathode grade A del US midwest 13 Dec nc Copper cathode grade A in-warehouse Rotterdam 12 Dec nc Copper, brass scrap del US Bare bright cash spread 13 Dec Bare bright next active month spread 13 Dec #1 wire and tube cash spread 13 Dec #1 wire and tube next active month spread 13 Dec Brass scrap radiators 13 Dec nc Brass scrap red brass solids 13 Dec Brass scrap 360 rod borings 13 Dec Copper, brass scrap export prices Bare bright cif Asia cash spread 14 Dec nc Bare bright cif Asia next active month spread 14 Dec nc #1 wire and tube cif Asia cash spread 14 Dec #1 wire and tube cif Asia next active month spread 14 Dec #2 copper cif Asia ports cash spread 14 Dec nc #2 copper cif Asia ports next active 14 Dec month spread nc Scrap motors cif China 14 Dec Yellow brass cif Asia ports 14 Dec Brass alloy scrap C200-series Cu cash spread del US 13 Dec C200-series Cu next active spread del US 13 Dec nc C200-series zinc cash spread 13 Dec nc C210 transaction price del US 18 Dec C220 transaction price del US 18 Dec C230 transaction price del US 18 Dec C240 transaction price del US 18 Dec C260 transaction price del US 18 Dec C270 transaction price del US 18 Dec /30 brass label del Europe 12 Dec nc Brass/bronze alloys del US C Dec C Dec nc C Dec nc C Dec C Dec C Dec C Dec nc Zinc prices del US (weekly) Special high grade zinc premium 18 Dec nc Old zinc diecast scrap 18 Dec nc Antimony min 99.65% cif US 12 Dec Arsenic min 99% fob US warehouse 12 Dec nc Bismuth ingot min 99.99% fob US warehouse 12 Dec nc Bismuth min 99.99% ex-works China CNY/t 18 Dec 72,000 73,500 nc Cadmium min 99.95% fob US warehouse 12 Dec nc Cadmium min 99.99% fob US warehosue 12 Dec nc Cobalt min 99.8% fob US warehouse 12 Dec Germanium dioxide min % du Rotterdam $/kg 18 Dec nc Germanium metal min % cif Main Airport $/kg 18 Dec 1,250 1,350 nc Indium ingot min 99.99% fob US warehouse $/kg 12 Dec Indium min 99.99% ex-works China CNY/kg 18 Dec 1,450 1,550 nc Magnesium min 99.9% fob US warehouse 12 Dec 3,088 3,309 nc Manganese electrolytic metal min 99.7% fob US warehouse 14 Dec nc Ruthenium 99.9% fob US warehouse $/ozt 12 Dec Silicon min 98.5% Si fob US warehouse 14 Dec Silicon min 98.5% Si fob US warehouse 90 days 14 Dec nc Selenium dioxide min 99% ex-works China CNY/kg 18 Dec nc Selenium min 99.5% fob US warehouse 12 Dec nc Tellurium min 99.95% fob US warehouse $/kg 12 Dec Tungsten APT du Rotterdam (per mtu WO3) $/mtu 18 Dec nc Titanium scrap del US dealer/processor (weekly) 6Al 4V aero turnings 14 Dec Al 4V bulk weldable 14 Dec Al 4V clips 14 Dec Grade 1 CP Ti solids 14 Dec Grade 2 CP Ti solids 14 Dec Grades 3-4 CP Ti solids 14 Dec Turnings min 85% Ti non-tin bearing, mixed 14 Dec Turnings min 85% Ti tin bearing, mixed 14 Dec Page 12 of 14

13 Markets Minor metals prices (monthly) Chrome aluminothermic fob US warehouse Molybdenum scrap 99.7% airmelt del US consumer Molybdenum scrap 99.9% pure vacuum del US processor Nickel-Cobalt refinery scrap cobalt contained del US processor Nickel-Cobalt refinery scrap nickel contained del US processor Niobium (columbium) scrap vacuum del US consumer Niobium (columbium) scrap vacuum del US processor 30 Nov Nov Nov Nov Nov Nov Nov Rhenium 99.9% fob US warehouse 30 Nov Rhenium APR catalyst 69.4% fob US warehouse Tantalum scrap 99.9% vacuum melted del US consumer Tantalum scrap 99.9% vacuum melted del US processor Titanium 6Al 4V ingot fob US producer Tungsten 99.9% min Chinese bar del US consumer Tungsten 99.9% scrap del US processor Tungsten 99.9% scrap solids consumer price fob US processor Tungsten carbide scrap inserts fob US processor Tungsten carbide scrap rounds fob US processor 30 Nov Nov Nov Nov Nov Nov Nov Nov Nov Super alloys scrap del US processor (daily) Hastelloy C air melted 18 Dec Hastelloy X air melted 18 Dec Inconel 600 vacuum melted 18 Dec Inconel 601 vacuum melted 18 Dec Inconel 617 vacuum melted 18 Dec Inconel 625 vacuum melted 18 Dec Inconel 718 vacuum melted 18 Dec Waspaloy vacuum melted 18 Dec Nickel cathode premiums del US (weekly) 4x4inch (small lots) 14 Dec nc 4x4inch (truckloads) 14 Dec nc 1x1inch (small lots) 14 Dec nc 1x1inch (truckloads) 14 Dec nc Cupro-nickel scrap del US processor (daily) C70600 (90:10) 18 Dec C71500 (70:30) 18 Dec Monel 400 (R) 18 Dec LME official cash close base metals 18 Dec 15 Dec ± Aluminium Cash buyer Cash seller month buyer month seller Aluminium alloy Cash buyer Cash seller month buyer month seller North American Special Alloy Aluminum Contract (NASAAC) Cash buyer Cash seller month buyer month seller Copper Cash buyer Cash seller month seller Lead Cash buyer Cash seller month buyer month seller Nickel Cash buyer Cash seller month buyer month seller Tin Cash buyer Cash seller month buyer month seller Zinc Cash buyer Cash seller month buyer month seller Page 13 of 14

14 Markets LME official base metal stocks t 18 Dec 15 Dec ± CME Comex closing prices 18 Dec 15 Dec ± Aluminium 1,105,900 1,105, Aluminium alloy 13,000 13,000 nc NASAAC 186, , Copper 196, ,200 1,525 Lead 143, , Nickel 373, , Tin 2,310 2,310 0 Zinc 191, , LME official cash close minor metals 18 Dec 15 Dec ± Cobalt Cash buyer 72,000 72,000 nc Cash seller 72,500 72,500 nc 3-month buyer 72,000 72,000 nc 3-month seller 72,500 72,500 nc 15-month buyer 71,750 71,750 nc 15-month seller 72,750 72,750 nc Molybdenum Cash buyer 15,500 15,500 nc Cash seller 16,000 16,000 nc 3-month buyer 15,500 15,500 nc 3-month seller 16,000 16,000 nc 15-month buyer 15,735 15, month seller 16,735 16,740-5 Aluminium Spot month 2, , nc Copper Spot month 6, , SHFE official closing prices LME minor metal stocks 18 Dec 15 Dec ± Aluminium Spot month 2, , Copper Spot month 8, , Nickel Spot month 14, , Tin Spot month 20, , Zinc Spot month 3, , t 18 Dec 15 Dec ± Cobalt Argus Metal Prices is published by Argus Media group Registered office Lacon House, 84 Theobald s Road, London, WC1X 8NL Tel: sales@argusmedia.com ISSN: Copyright notice. All rights reserved. All intellectual property rights in this publication and the information published herein are the exclusive property of Argus, and/or its licensors (including exchanges) and may only be used under licence from Argus. Without limiting the foregoing, by accessing this publication you agree that you will not copy or reproduce or use any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever except under valid licence from Argus. Further, your access to and use of data from exchanges may be subject to additional fees and/or execution of a separate agreement, whether directly with the exchanges or via Argus. Trademark notice ARGUS, ARGUS MEDIA, the ARGUS logo, ARGUS METAL PRICES, other ARGUS publication titles and ARGUS index names are trademarks of Argus Media Limited. Visit for more information. Disclaimer The data and other information published herein (the Data ) are provided on an as is basis. Argus and its licensors (including exchanges) make no warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of the Data or fitness for any particular purpose. Argus and its licensors (including exchanges) shall not be liable for any loss, claims or damage arising from any party s reliance on the Data and disclaim any and all liability related to or arising out of use of the Data to the full extent permissible by law. Publisher Adrian Binks CEO Americas Euan Craik Chief operating officer Matthew Burkley Global compliance officer Jeffrey Amos Commercial manager Karen Johnson Managing editor Jim Kennett Editor Sean Davidson Tel: metalprices@argusmedia.com Customer support and sales Technical queries technicalsupport@argusmedia.com All other queries support@argusmedia.com Houston, US Tel: New York, US Tel: Washington DC, US Tel: London, UK Tel: Astana, Kazakhstan Tel: Beijing Tel: Dubai Tel: Moscow, Russia Tel: Rio de Janeiro, Brazil Tel: Singapore Tel: Tokyo, Japan Tel: Metals illuminating the markets