ROUND-UP – FastMarkets most read stories for the week ending April 22

 A round-up of FastMarkets’ top stories published during the week ending April 22. 

FRIDAY, APRIL 22

Nyrstar has terminated the off-take and marketing agreement with Noble Group Ltd to market and sell 200,000 tonnes per year of commodity grade zinc metal produced at its European smelters.

Base metals other than zinc and nickel ended the week in positive territory, with aluminium hitting its strongest since July last year and copper retuning to one-month highs.

Black Stone Minerals acquired a portion of Freeport-McMoran’s oil and gas business for $102 million

US aluminium premiums have wobbled lower this week amid an atypical lack of springtime spot demand.

The spot markets for zinc and lead concentrates has been subdued in April, with treatment charges and (TCs) stable this month. Click here for this month’s table.

Canadian miner Teck Resources has concluded initial deals with Korean smelters for the annual supply of low-silver lead concentrates from its Red Dog mine in Alaska with treatment charges (TCs) down $29 per tonne on 2015 levels.

Thursday’s rallies in metal prices reflected CTA and fund activity and not a fundamental shift in markets, traders told FastMarkets on Friday.

Aluminium surged to a near-10-month high on the Shanghai Futures Exchange on Friday when funds bet on tightening supply and improving demand. 

China’s imports of refined zinc in March surged 88.3 percent year-on-year and 72.2 percent month-on-month to 76,998 tonnes, according to latest data from Chinese customs.

Nickel may have bottomed out and should rally in the second half of 2016 thanks to a stronger China, stabilised global steel production and a drawdown in inventories, Bank of America Merrill Lynch (BoA ML) said.

Creditors of Queensland Nickel (QNI), the 30,000-35,000 tonnes per year nickel refinery in Yabulu in Australia, have voted in a Friday meeting to liquidate the company.

THURSDAY, APRIL 21 

The United Steelworkers (USW) union’s decision to file a 201 petition has been met with significant resistance from Canada and other trade partners as well as downstream fabricators.

Base metals ended Thursday LME trading mixed after a volatile session that saw many hitting fresh multi-week or multi-month highs.

A support package worth hundreds of millions of pounds will be made available on commercial terms to potential buyers of troubled Tata Steel UK, the UK and Welsh governments said.

Codelco has suspended a general manager and several executives at its Andina division after mudslides caused a failure at a section of the mine’s tailings.

Japan’s Toyota Tsusho has revised its earnings forecast to a loss of 44 billion yen ($401 million) from October’s forecast of a 35-billion-yen profit for its fiscal year ended March 2016.

MMG’s production of zinc metal in concentrate fell 64 percent year-on-year to 46,044 tonnes in January-March, the company said.

Peru’s Las Bambas mine is on track to achieve commercial production in the second half of 2016, MMG Ltd said in a release today.

Anglo American’s copper production in the first quarter of the year was in line with the first quarter of last year while nickel output rose.

China’s exports of aluminium fabricated products rose 20.6 percent year-on-year and 38.5 percent month-on-month to 360,000 tonnes in March, according to final trade data published by the country’s General Administration of Customs on Thursday.

South32’s aluminium and nickel production fell year-on-year in the January-March quarter, but the company has maintained its upstream production guidance for its fiscal year ending March 2016.

WEDNESDAY, APRIL 20 

Lawyers for Eferton DMCC and Asia-Global Renewable Energy Corp, one of the defendants in a $45 million fraud claim, held a joint conference on Friday to outline basics of the case and discuss the discovery process.

The global refined copper market posted a moderate surplus of 56,000 tonnes (seasonally adjusted surplus of 50,000 tonnes) in January, the International Copper Study Group (ICSG) said.

The US primary aluminium smelting industry is vanishing and it has become politically fashionable to wag a disapproving finger at China. But this narrow and biased world view ignores the real culprits - the strong dollar and the rise of the Middle East as major low-cost producer.

Base metals finished Wednesday LME trading in positive territory on improved appetite due to a mix of economic and technical advances, pushing many of the metals to multi-week and multi-month highs.

South32 has settled annual supply contracts for high-silver lead concentrate from its Cannington mine in Australia with Korean smelter Korea Zinc at lower rates. 

The copper market remained oversupplied in the first two months of the year at 120,000 tonnes, the World Bureau of Metal Statistics (WBMS) said.

Global primary aluminium production averaged 156,600 tonnes per day in March 2016 (31 days), up from 144,400 tonnes per day in February (29 days), and was a four-month high, data issued by the International Aluminium Institute (IAI) showed.

BHP Billiton’s total copper production fell in the quarter to the end of March because of lower grades at its Escondida mine, it said.

Merafe Resources’ ferrochrome production from the Glencore-Merafe joint venture in the first three months of 2016 rose four percent to 103,000 tonnes from 99,000 tonnes in the first quarter of 2015.

Refined tin production at Malaysia Smelting Corp (MSC) fell 13.4 percent to 30,209 tonnes last year, the world’s second-largest refined tin producer said.

Rumours that China’s State Reserve Bureau (SRB) plans to stockpile nickel throughout 2016 year has helped lift domestic futures prices, albeit temporarily, market participants said.

TUESDAY, APRIL 19 

Base metals ended Tuesday LME trading in positive territory, boosted by recovering oil prices and a softer dollar – the latter fell after the release of disappointing US data this afternoon, traders said.

A jump in the cash/May aluminium spread during Monday’s kerb session attracted the attention of traders – a flare-out into a backwardation created a brief but profitable squeeze for those on the right side of it.

Sucden’s outlook for base metals is mildly bullish for the second quarter of 2016 and it expects sideways-to-higher range-trading over the medium term, it said.

Warehousing company Henry Bath has hired David Gast as general manager for its Americas business, it said.

Market participants at a mining conference here last week suggested that Indonesia is unlikely to remove or suspend its ban on the export of unprocessed metal ores such as nickel even while its government reviews its export policy.

A recovery in the SHFE aluminium price has prompted Chinese smelters to bring capacity back online, with more set to follow, Citi Bank said.

China’s Tongling Nonferrous Metals Group has warned of a net loss of 80 million-95 million yuan ($12-15 million) in the first quarter of this year.

Rio Tinto’s aluminium production rose ten percent year-on-year and three percent quarter-on-quarter to 887,000 tonnes in the January-March quarter.

Rio Tinto has raised the guidance for gold production at the Oyu Tolgoi copper/gold mine in Mongolia, its Turquoise Hill Resources subsidiary, said.

Japan’s Marubeni Corp has cut its profit forecast for its fiscal year ending March 2016 to 60 billion yen ($550 million), from its February projection of 180 billion yen on expectations of large impairment losses, the company said on Monday.

The Dubai Multi Commodities Centre (DMCC) and China Silver Group have signed a memorandum of understanding (MoU) on Monday aimed at driving commodities trade in China’s Free Trade Zones (FTZ), the companies announced on the same day.

Tata Steel Europe has appointed Bimlendra Jha, one of its executive committee members, as CEO of Tata Steel UK to further manage the sale of its loss-making UK businesses, it said.

 Demand for rhenium in aero engines is likely to rise given strong order growth from this sector although this is seen being satisfied by increased supply of secondary material recovered from end-of-life gas turbine parts, industry specialists Roskill said.

MONDAY, APRIL 18

Base metals reversed direction during late LME trading on Monday, aided by oil prices regaining some traction and a softer dollar, with nickel and zinc in particular moving to notable mini-upswing highs.

LME aluminium spreads tightened this week while available material continues to fall amid a series of planned and potential changes to warehouse regulations.

Metals trading veteran Christian Schirmeister with be joining LME ring dealer member (RDM) Amalgamated Metal Trading Ltd (AMT) at the start of May as a senior client liaison officer.

The forward curve for the CME Group’s Aluminum MW US Transaction Premium (AUP) contract remains remarkably flat, which suggests that participants expect premiums to trade in a narrow range for the remainder of this year.

Reports from the US government that China will withdraw export subsidies on aluminium have been “misunderstood” and the status quo of tax rebates for exports remains in place for now, sources in the Chinese aluminium industry told FastMarkets on Monday.

Britain’s exit from the European Union (EU) would see the UK stop being “rule makers and become rule takers”, BHP Billiton CEO Andrew Mackenzie has warned.

What’s happened to LME warehouses since the ‘bazooka’ was loaded – a timeline of warehousing reforms.

Fajr Investment Advisory has been approved as a category five member of the LME.

The LME’s cash-settled ferrous contracts - steel scrap and steel rebar - that were launched late last year continue to grow, with turnovers and open interest increasing, albeit undramatically.

High-frequency traders (HFTs) are not systematically using their speed advantage over slower forms of trading to anticipate order flows in equity markets over small time-frames although there are signs that over longer time-spans that this is taking place, the UK’s Financial Conduct Authority (FCA) said in a study.

Codelco said late on Saturday that it had suspended production at its El Teniente mine in Chile, which will likely lead to a loss of 5,000 tonnes of copper production.

 

Will Adams

About Will Adams

William Adams has been involved in the metals markets since 1982 – he has experience in many areas of the market from researching to trading and has worked in London, New York and Tokyo.