ROUND-UP – FastMarkets most read stories for the week ending Feb 5

A round-up of FastMarkets’ top stories published during the week ending February 5. 

FEBRUARY 5 

Base metals other than tin ended the week lower after hitting multi-month highs in the previous session. The complex is now looking for fresh direction, market participants said, but business was thin today and is set to remain that way for the Chinese New Year, which officially starts on February 8.

The LME has offered a ‘one-off’ two-week window from February 19 for listed warehouse operators to revise warehouse rents and FOTs lower, it said.

Six category five members resigned their LME membership as of Friday. They were Cargill International SA, Enmetco LLC, Lonconex Limited, MetAlliance LLP, Nyrstar Budel BV and Rio Tinto (London) Ltd.

Spot copper treatment charges and refining charges (TC/RCs) remain under pressure, falling to five-month lows amid tighter supply after Chinese smelters stocked up ahead of the New Year holidays.

Aurubis will carry out care and maintenance work at its Pirdop copper smelter for 50 days in April and May, a well-informed source said, resulting in it requiring 150,000 tonnes fewer of copper concentrate production.

Sumitomo Corp has written off 111.6 billion yen ($954.5 million) because of the slump in metal prices in which LME nickel slumped to a 2003 low copper its cheapest since 2009.

Simon Underhill has joined Sumitomo, where he is working in the base metals division, FastMarkets understands.

The Shanghai Futures Exchange (SHFE) has named an investor, Zhang Erjiang, as having breached its abnormal trading rules, making it the second time the exchange has named-and-shamed an errant client in slightly more than a month.

Glencore shares were back above 100p on Monday for the first time since November, propelled out of the recent rut by short-covering and a weaker dollar.

FEBRUARY 4 

Base metals ended Thursday higher on the LME with copper, aluminium, lead, zinc and tin all hitting multi-month highs. Short-covering ahead of Chinese New Year, a weaker dollar and higher oil prices all helped to boost prices.

Total bonded stocks in Shanghai free-tax zones have fallen for copper, zinc, aluminium and nickel in January due to improved arbitrage in the first half of the month, but shipping activity has slowed ahead of Chinese New Year celebrations.

Gunvor’s retreat from base metals is a sign of the times for the industry, illustrating how tough market conditions have become even for companies with substantial credit lines and diversified portfolios, market participants said.

Nyrstar posted a loss of 46 million euros ($51 million) for EBITDA in its mining segment the second half of 2015 following a sharp decline in the zinc price, the company said on Thursday.

Trafigura will not take the majority control of Nyrstar’s board of directors, Nyrstar’s chief executive officer Bill Scotting said during a conference call on Thursday.

Global mining equities jumped on Thursday as a softer dollar prompted at return to the much-maligned commodities sector.

Silver price auctions that are deemed to ‘threaten’ the ‘integrity’ of the process or its participating members will be suspended, Thomson Reuters and CME Group announced in a joint statement following a meeting of the LBMA Silver Price Oversight Committee.

The US Department of Commerce has delayed its decision on the Scope Clarification/Circumvention filing against Chinese aluminum extruder Zhongwang Group by until February 22.

Hong Kong Exchange & Clearing (HKEx) mini London contracts were all lower during January 2016, data today showed.

South Korea has purchased 2,000 tonnes of copper cathodes in new tenders this week, the country’s state-run Public Procurement Service (PPS) said on Thursday.

 FEBRUARY 3 

Krzysztof Skóra will become the CEO of Poland’s KGHM, Europe’s second-largest copper producer. He replaces Herbert Wirth, the company announced today.

In a blog post on Wednesday, Charles Li, chief executive of Hong Kong Exchange and Clearing (HKEx) shed more light on the exchange’s ambitious plans to build a China mainland spot commodities trading platform that could become representative ‘China price’ benchmarks and to ‘financialise’ the London Metal Exchange.

Base metals ended LME trading on Wednesday higher, with copper and lead hitting one-month highs and zinc its strongest in three months.

The conditions are in place for another wave of aluminium imports to the US, which could have a major impact on physical premiums in America, Europe and Japan.

Lower commodity prices hit earnings at the metals units of Japan’s Mitsubishi Corp and Toyota Tsusho during the nine months to December 2015.

Aluminium net shipments (including exports) by domestic US and Canadian facilities totalled an estimated 1.700 billion pounds (771,114 tonnes) during December, down 2.8 percent year-on-year.

The Stock Exchange of Hong Kong will delist China Metal Recycling on February 4.

FEBRUARY 2 

The looming Chinese New Year and the rally in underlying metal prices have started to affect the physical metals market - buying interest has waned this week.

Horsehead Holding Corp. has filed for Chapter 11 bankruptcy and will seek $90 million in financing from its debt holders to pay venders and suppliers.

Doe Run will lower mine production at its Missouri lead mining district for 2016 by 20,000 short tons of lead-contained in concentrate and lesser amounts of zinc and copper,

Chinese zinc and lead concentrate imports will remain high in 2016 amid low stocks and growing domestic primary smelting capacity and despite slowing GDP growth, Shen Ying of BGRIMM Lilan Consultancy (BLC) said.

BHP Billiton is under pressure to cut its dividend after it was downgraded by ratings agency Standard & Poor, analysts said.

China’s scandal-ridden Fanya Metals Exchange faked buy and sell orders to control prices on its electronic trading platform, according to a police investigation document seen by Asia-based news agency Quartz.

GKE Metal has sold its stake in its non-ferrous metals logistics and warehousing joint venture with Louis Dreyfus as poor market conditions weigh.

Early gains in copper futures were erased on Tuesday as a sell-off in oil and stocks had investors in a selling mood.

Volumes on CME in January were a record 18.2 million contracts per day, an increase of 16 percent over the same period a year earlier. But metals volume averaged 405,000 contracts per day, down one percent.

FEBRUARY 1 

There was a smooth start to open-outcry trading on the trading floor at the London Metal Exchange’s (LME) new headquarters on Monday, as the world’s largest non-ferrous metals market settled into its purpose-built new premises.

Freeport-McMoRan’s subsidiary in Indonesia, PT Freeport Indonesia, will not be allowed to export copper concentrates from its Grasberg mine from February 20 because it has yet to secure a new export licence.

Swiss commodities trader Gunvor will lower its exposure to base metals, with a slew of traders leaving the company.

Base metals moved away from earlier lows during late-Monday LME trading amid some day-trade covering but prices were still mixed at the end of the first day of the new month.

The surprise increase in Chinese copper imports in December did not reflect growth in demand but was due to currency arbitration, expectations of further deprecations in the yuan and a “negative” LME/SHFE arbitrage.

Leigh Crump has left Standard Bank after 13 years to join physical merchant Ambrian Ltd in London.

AZZ Inc has has acquired the assets of Alpha Galvanizing, an Atkinson, Nebraska-based business unit of Olson Industries, which manufactures electrical utility poles, agricultural machinery and industrial manufacturing components.

Alcoa has appointed three new board members – they are: John Plant, the former president and CEO of TRW Automotive; Rick Schmidt, former CEO of Spirit Aerosystmes; and Sean O. Mahoney, a former Goldman Sachs banker.

China’s largest copper producers, Tongling Nonferrous Metals Group and Jiangxi Copper Co, have separately warned of dismal 2015 fiscal year results due to falling copper prices.

Robust zinc imports into China in the second half of last year are unlikely to continue in the first quarter of this year.

Around 10 percent of primary aluminium production capacity at Hydro’s Ardal plant in Norway is temporarily shut down following a power outage last Friday night.

US global investment firm Franklin Templeton has become a substantial shareholder of Noble Group after it bought 2.5 million shares in the Singapore-listed commodity trader for 28.5 Singapore cents (20 US cents).

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.