ROUND-UP – FastMarkets most read stories for the week ending Feb 19

 A round-up of FastMarkets’ top stories published during the week ending February 19. 

FRIDAY FEB 19 

Spot copper treatment and refining charges (TC/RCs) have fallen to six-month lows following the return of Chinese market participants from their Lunar New Year holiday.

The US Midwest aluminium premium should remain in a fairly narrow range for the rest of this year but could inch higher if more production cuts implemented, Century Aluminum executives said.

The consolidated cash breakeven point for Century Aluminum’s continuing operations and product mix is $1,450 per tonne at a 9 cent per pound Midwest premium.

Reports that the Indonesian government is considering a reversal of its ban on the export of unprocessed metal ores will weaken nickel prices and could force producers to curtail output.

Moody’s Investors Service has cut the ratings of Peruvian miners, Minsur and Volcan Compania Minera, on increased credit risk for the mining sector. 

Copper stocks at Shanghai Futures Exchange warehouses rose 35,622 tonnes or 14.7 percent week-on-week to 276,904 tonnes as of February 19, according to data from the exchange.

Vale registered record annual and quarterly nickel and copper production in 2015 and the fourth quarter of last year respectively.

Mirabela Nickel will place its Santa Rita nickel mine in Bahia, Brazil on care and maintenance, said the Australia-listed nickel producer on Friday morning.

THURSDAY FEB 18 

The London Metal Exchange (LME) open-outcry floor has the potential to hold more members, should there be a demand for it, CEO Garry Jones said today.

Base metals finished Thursday LME trading much as they started it following a somewhat lacklustre session in which fresh direction was conspicuously lacking.

The current volatility in metal markets does not need to be a deterrent to entrants to the sector as long as the company can provide something the market needs, Federico Stiegwardt, global head of base metals at Cargill risk management, said.

Jiangxi Copper will cut 100,000 tonnes of copper cathode output this year as part of the 350,000 tonnes of cuts announced by a group of Chinese smelters late last year. 

China’s ex-works producer prices in the nonferrous metal smelting and fabricating industry fell 12.1 percent year-on-year in January, according to data released by the country’s National Bureau of Statistics.

Newmont Mining Corp’s copper production rose 93 percent to 166,000 tonnes in 2015. It expects expects its copper output to be 120,000-160,000 tonnes in 2016 and 2017 before decreasing to 70,000-110,000 tonnes by 2018 due to the depletion of higher-grade ore at Batu Hijau in 2018.

US zinc producer Horsehead Holding Corp has appointed consultant Timothy Boates as its chief restructuring officer to guide the company through its Chapter 11 bankruptcy reorganisation.

The copper, lead and zinc markets were oversupplied in the 2015 while the other base metals were in deficit, the World Bureau of Metal Statistics (WBMS) said.

China Gold International Resources expects its copper production at 38.6 million pounds (17,509 tonnes) in 2016, up 1.3 percent from output in 2015, the Hong Kong- and Toronto-listed copper and gold miner said.

Eramet’s nickel production, which includes ferronickel and nickel matte, fell three percent to 53,369 tonnes in 2015, the French nickel and manganese producer said.

WEDNESDAY FEB 17 

A divergence has emerged between how US-based physical traders and the futures markets view the near-term path of the Midwest aluminium premium.

Buyers of aluminium P1020 ingots in Japan are expecting a ‘slight increase’ to the Q2 major Japanese port (MJP) premium, with negotiations for the benchmark to kick off from next week.

The recent weakness in European aluminium premiums has been expressed in the futures markets, which recored a sizeable pessimistic trade last Thursday.

Jerome Lucaes has been appointed to the role of marketing director of sustainability at UC Rusal, the company said on Wednesday.

Freeport-McMoran saw its share price jump 17 percent during on Wednesday after announcing a recent deal to sell part of its mining assets.

Lead inventories held in LME warehouses jumped to a six month high of 200,500 tonnes on Wednesday, following a large arrival into Vlissingen.

Chinese copper producer Tongling Nonferrous Metals will gradually close its Jinchang smelter this year while construction of a new smelter is in progress, sources said.

Global primary gallium production was maintained at high levels last year even though prices are at their lowest ever in real terms and there are big Chinese stockpile inventories.

Bismuth prices show no sign of reversing their long downtrend, with the market not far off the $4.00 level, the lowest since July 2005, amid further evidence of oversupply and ample availability.

Glencore shares pushed to a three-month high in London on Wednesday when investor confidence picked up after the miner-trader announced of a new revolving credit facility (RCF).

Fitch Ratings has cut Anglo American’s credit assessment to junk, it said in a statement on Wednesday. The copper and platinum producer’s rating now stands at BB+, down from BBB- previously.

Production and investment growth in China’s nonferrous metal industry are expected to slow further in 2016, said the country’s ministry of industry and information technology (MIIT) in a recent February statement which painted a dismal outlook for the sector this year

Ge Honglin, the chairman and executive director of Aluminium Corp of China (Chalco), has resigned on February 16, Chalco said in a filing to the Hong Kong exchange late on Tuesday.

South Korea has bought 120 tonnes of nickel at a premium of $300 per tonne over London Metal Exchange (LME) cash prices, the country’s Public Procurement Service (PPS) said on Wednesday.

Japan’s Sumitomo Metal Mining (SMM) is aiming to lift its nickel capacity by 50 percent and its copper production by 76.5 percent over the next six years, according to the company’s business plan report released this week.

Norwegian aluminium producer Norsk Hydro has scaled back its global aluminium demand growth forecast to 3-4 percent in 2016, compared to its earlier projection of 4-5 percent.

Primary aluminium production at Norsk Hydro rose 4.4 percent year-on-year to 521,000 tonnes in the October-December quarter, it said.

TUESDAY FEB 16

Base metals ranged to the downside during late-Tuesday LME trading, with a pullback in the oil price from earlier peaks and equities stalling on the upside putting a dampener on the intraday mood.

Physical markets have started to show signs of life now that China has returned to the market after a week-long absence of the Lunar New Year holiday.

Aluminium and zinc stocks in LME-listed warehouses jumped on Tuesday ahead of ‘Third Wednesday’, when the February date becomes prompt.

Commodity prices will remain under pressure given current supply dynamics, Anglo American CEO Mark Cutifani warned. The company lost $5.62 billion in 2015, compared with a loss of $2.51 billion the previous year.

Indonesia’s PT Timah had more than 8,000 tonnes of unsold tin stocks at the end of 2014, almost double the level of current LME stocks, company president Sukrisno has been quoted as saying by local reports. 

Cadmium prices bucked the general trend in the generally depressed specialty metals sector, climbing back above $0.50 to hit 10-month highs amid a short-term lack of high-grade metal.

Global antimony production declined in 2015 by 8,000 tonnes to 150,000 tonnes and, even though consumption was slightly higher at some 184,000 tonnes, overhanging inventory weighed on prices, the US Geological Survey (USGS) said.

David Port will replace Bill Cronin as chief risk officer (CRO) at Noble Group, the company said.

MONDAY FEB 15 

Hydro and Aurubis filed legal challenges against the European Commission about multi-million-euro payments made as part of Germany’s EEG renewable energy surcharge

Gold fell further on Friday afternoon, with investors more open to risk after China started to reopen after a week-long holiday. But the wider environment remains positive for the metal, analysts said

Freeport-McMoRan will sell a 13-percent stake it Morenci copper joint venture in Arizona to Japan’s Sumitomo Metal Mining for $1 billion in cash

Aluminium stocks at major Japanese ports dropped to their lowest in 14 months in January at 368,100 tonnes, according Marubeni Corp

Higher copper metal and product imports into China in January reflect an attractive arbitrage between Shanghai and London and tight domestic supply, analysts said

Falling mine supply and modest demand growth should leave the global tin market in a deficit, supporting the price, Morgan Stanley said

The global zinc and lead markets were both oversupplied in 2015, according to the ILZSG

FastMarkets’ William Adams looks at the major economic influences that will shape the week ahead

Ratings agency Standard & Poor’s cut the corporate credit rating of Freeport-McMoRan to junk and assigned a negative outlook for the company’s new rating

 Poland’s KGHM and Japan’s Sumitomo will remain partners in the Sierra Gorda mine in Chile

 

 

 

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.