ROUND-UP – FastMarkets most read stories for the week ending April 29

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

FRIDAY, APRIL 29

The London Metal Exchange (LME) will introduce accountability levels for some contracts from July 4.

Base metals ended Friday in positive territory on the LME, with continued dollar weakness fuelling today’s rally.

Spot treatment and refining charges (TC/RCs) for copper concentrates continued to climb over the past fortnight. 

Gold premiums around the world largely suffered this week from the international price of the metal hitting its highest in almost 15 months, keeping most buyers on the sidelines and drawing more scrap material onto the market.

Chinese smelters are poised to restart 1.5 million tonnes per year of idled capacity by the end of the year, Century Aluminium believes.

Century Aluminum will have to make a long-term decision on its Mt. Holly primary aluminium smelter in South Carolina by early July.

Vedanta is targeting aluminium production of around 1.2 million tonnes in its fiscal year ending March 2017, up 30 percent from record output of 923,000 tonnes in its previous fiscal year.

Deliverable copper stocks at Shanghai Futures Exchange warehouses dipped 19,795 tonnes or six percent week-on-week to 311,894 tonnes as of April 29, making this the sixth consecutive week of decline, according to data from the exchange.

European lead producer Recyclex is still negotiating a refinancing package to guarantee continued output at its 140,000-tonne-per-year primary smelter in Germany, while sales for all products were down in the first quarter of this year.

The net profit of China’s Jiangxi Copper Co surged 49.3 percent year-on-year to 201.37 million yuan ($31 million) in the January-March quarter, the Hong Kong-listed firm announced on Friday.

THURSDAY, APRIL 28 

 The LME is rumoured to be in talks with market users about altering its clearing model for LMEClear, sources told FastMarkets.

Henry Bath & Son has issued the first receipt for the London Metal Exchange (LME) warehouse receipt programme, LMEShield, on behalf of BNP Paribas Arbitrage SNC, the exchange said on Thursday.

Chile should produce 5.77 million tonnes of copper in 2016, state commission Cochilco said.

Supply in the lead market will outstrip demand in 2016, resulting in a surplus of 76,000 tonnes. Meanwhile, global demand for zinc will exceed supply by 352,000 tonnes in 2016, the International Lead and Zinc Study Group (ILZSG) said.

The International Nickel Study Group (INSG) has projected a 49,000-tonne deficit in the nickel market in 2016, an increase from its October forecast of a 23,000-tonne deficit for this year.

Sherritt International said that refined nickel production at its Ambatovy Joint Venture in Madagascar came in below expectations in the first quarter due to a number of unrelated reliability issues on equipment at its high-pressure-acid-leaching (HPAL) plant.

George Donoghue has temporarily taken over JP Morgan’s aluminium book from Sonny McNess, sources close to the matter told FastMarkets.

Base metals ended Thursday LME trading in positive territory after a worse-than-expected US GDP reading this afternoon weighed on the dollar, supporting most commodity markets, traders said.

Merger and acquisition (M&A) activity in the global metals sector during the first quarter was made up of fewer but bigger deals that were mostly done in local Chinese markets, PricewaterhouseCoopers (PWC) said in a report.

CME Group reported record revenue of $934 million in the first quarter of 2016 due largely to surging trading volumes in markets outside of the US.

Zinc market participants do not rule out tighter supply in the coming months amid talk of maintenance-led smelter production cuts and in anticipation of tightening global ore supply and improved Chinese metal demand.

Apurv Bagri, president and CEO of Metdist Group, today received approval from Hong Kong Exchange & Clearing (HKEx) shareholders to join its board of directors.

WEDNESDAY, APRIL 27

Federal Reserve members saw global risks ease over the last month, but decided that signs of a slowing US economy warranted no change to the benchmark rate.

Base metals finished lower on the LME on Wednesday – with traders finding little to get excited about ahead of crucial central bank meetings, the complex was content to retreat further from last week’s peaks.

Purchasers of Horsehead Holding Corp securities have filed a class action alleging that the zinc producer issued materially false and misleading statements and failed to disclose adverse information regarding the company’s business, prospects and operations.

Active futures trading in Chinese commodity markets may generate higher volatility in liquidity and prices, which could transfer to the international market while China starts to gain pricing power in base metals and bulk commodities, Citi said.

Spot demand for primary aluminium in the US, Europe and Japan has essentially vanished because the recent run-up in London Metal Exchange prices is seen a fleeting and not backed by the fundamentals.

Primary aluminium production at Norsk Hydro climbed four percent year on year during the first quarter of 2016 but profits continued to decline due to lower metal prices, it said.

India’s Hindalco Industries, which owns 51 percent of the Australia-listed copper miner Aditya Birla Minerals (ABM), intends to accept Metals X’s improved takeover for the latter.

Total profits among China’s non-ferrous metal smelters and fabricators contracted 4.3 percent year-on-year to 25.14 billion yuan ($3.87 billion) in January-March, according to data published by the Chinese National Bureau of Statistics.

Antofagasta’s copper output rose 7.3 percent in the first quarter of the year compared with the same quarter a year before.

The Shanghai Futures Exchange (SHFE) has introduced another measure to curb trading volatility in its ferrous metals contracts, this time by cutting its night trading hours for its rebar and hot rolled coil contracts by two hours starting May 3.

TUESDAY, APRIL 27

Physical base metal markets were largely quiet this past week, reflecting rallies in LME prices on CTA and fund buying. Click here for this week’s table.

Several physical metal trading houses have received approaches by Indian miner-smelter Hindustan Zinc (HZL) for considerable tonnages of concentrates, sources told FastMarkets.

Japan’s Mitsubishi Corp and Pacific Metals Co (Pamco) will sell their stakes in Strand Minerals – which holds a 90 percent stake in PT Weda Bay Nickel in Indonesia – to Eramet

Philippe Vecten has been appointed CEO of Eramet Nickel and Eramet Manganese on April 22, the French nickel and manganese producer said.

Base metals spent a routine Tuesday LME trading session ranging at modestly lower levels, readjusting in the wake of last week’s rallies to multi-week and multi-month highs, with the pace of business having slowed,

Falling commodity prices are hurting some but are not bad news for all, delegates said at the Structured Commodity Finance conference.

The slump in commodities prices has hit structured commodity trade finance but regulation is the biggest concern for the industry, delegates said at the Structured Commodity Finance conference.

Freeport-McMoRan reported a massive first-quarter loss due to weak copper and oil prices.

Britain’s potential exit from the European Union has rattled UK regulators, with reports circulating that the Bank of England (BoE) has requested clearing houses – such as London Metal Exchange (LME) clearing house LME Clear – to provide a contingency plan.

Commodity prices appear to have bottomed out but any price rebound is likely to be weak, Edward George, head of group research at Ecobank, said.

Lead inventory moves at LME-registered sheds have returned to the forefront, as cancellations have risen a combined 33,000 tonnes in the past three days to 79,700 tonnes, up 70 percent since April 21.

A California Judge ruled on Monday that Eferton DMCC did not provide enough factual allegations to pursue fraud charges against Asia-Global Renewable Energy Corp.

MONDAY, APRIL 26 

Base metals ended mixed on the LME on Monday – although aluminium and nickel closed higher, the rest continued to retrace from week’s rally.

Comex copper futures edged lower Monday afternoon amid a technical drawdown ahead of the US Federal Reserve meeting, while the dollar continued to slip versus other global currencies.

Aurubis AG’s earnings for the second fiscal quarter beat market expectations due to higher treatment and refining charges (TC/RCs), robust sales of wire rod and shapes and the strength of the dollar.

Aluminum demand in the United States and Canada, defined as shipments by domestic producers plus imports, totalled an estimated 4.110 billion pounds (1.86 million tonnes) through February, down two percent year-on-year

Ball Corp and Rexam PLC have agreed to sell select metal beverage can assets in Europe, Brazil and the United States to the Ardagh Group for approximately $3.42 billion to satisfy certain regulatory requirements in connection with their pending merger.

Gonzalo Cuadra has been appointed chairman of the London Metal Exchange’s (LME) user group.

Nevsun Resources and Reservoir Minerals have entered into a definitive agreement to merge their companies and consolidate the Timok copper project ownership.

Copper on the Shanghai Futures Exchange fluctuated between slight gains and losses during Asian trading hours on Monday amid profit-taking and declining SHFE stocks, and ahead of central bank meetings in the United States and Japan.

Central bank policy is again set to dominate in the week ahead. The Federal Reserve is expected to stand fast at Wednesday’s FOMC after the minutes from the March meeting all but ruled out any action this week. But the accompanying statement could offer important signals for the near-term policy outlook.

 

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.