Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Trafigura’s metals and minerals trading business posted a robust fiscal year compared to 2018. The outlook for metals remains favourable for 2020 the global metals trader reported in its filing.


Trafigura reported a 7.6pc increase in its total traded volumes for non-ferrous metals to 19.9mn mt, from 18.5mn mt in 2018. Traded non-ferrous metal concentrates increased to 10.6mn mt in 2019 from 10.4mn mt in the prior year. Traded non-ferrous refined metals increased to 9.3mn mt this year from 8.1mn mt in 2018. 


Metal demand was down in sync with the sluggish global economic growth, a slowdown in auto and infrastructure sectors in China, India, and the US, and the US-China trade war, Trafigura indicated in its 2019 report on its non-ferrous metals business. The supply side also remained unimpressive. 


Lead and Zinc Market 

Global demand for lead and zinc slowed down due to low inventories. Zinc shortages continued in 2019  as China had to curb its smelting capacity after facing several environmental regulations. 


The lead market was impacted by weak global consumption, the shut down of Nyrstar’s Port Pirie operations, and a drop in demand for cars in China. However the market remained balanced by the end of the year.


Trafigura reported that increasing supply and constrained smelting capacity drove the lead and zinc concentrates segment during the year. The increase in supply of zinc raw materials were offset by the shortage in global smelting capacity since Q4 2018 leading to a sharp build-ip in the availability of zinc concentrate. spot treatment charges to smelters also increased from $95/mt in September 2018 to $285/mt in September 2019.


Accessibility improved for lead concentrates after three years of tight supply due to rising mine supply mainly from expanding production from operating mines.



Trafigura reported that the movement of the copper market in 2020 would depend significantly on how the US-China trade war plays out. the global market for refined copper weakened in 2019 compared to the prior year with an increase in production from new Chinese smelters which was met with softer demand amid slowing economic growth. The US-China trade conflict also impacted copper markets. Copper concentrates witnessed stronger demand. However, major copper producers like Peru saw supply disruptions due to social unrest. 


Alumina and aluminium

Trafigura’s outlook for 2020 remains uncertain for the alumina and aluminium market as weakening macroeconomic indicators fuel fears of growing overcapacity. In 2019, conditions normalised in this market following a volatile 2018. The year proved to be increasingly negative amid supply overhang coupled with weakening demand. The increasing availability of secondary aluminium and economic uncertainty threatened the market. Slowdown in the automotive and manufacturing sector pushed down LME price for aluminium. However, Trafigura stated that reduction of plastic packaging boosted the use of aluminium in packaging, pushing up the demand for aluminium in this form. 


Financial Highlights

The company’s gross profit rose by 25pc to $2,978mn compared to 2018 while net profit remained unchanged at $867.8mn. Its revenue from the metals and minerals business increased by 35pc. 

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