ROUND-UP – FastMarkets most read stories for the week ending March 11

A round-up of FastMarkets’ top stories published during the week ending March 11.

FRIDAY MARCH 11 

Base metals ended the week in positive territory on the LME and are now awaiting Chinese data over the weekend for fresh direction, traders said.

Aluminium 6063 billet premiums were largely unchanged globally over the past month, with the market monitoring several key factors ahead of a crucial period for extrusions.

Alumet’s remelt billet smelter in Schlins, Austria, will restart this weekend after three-and-a-half weeks of being offline. 

The LME lead market is susceptible to further tightness at the front end of its forward curve – the March date is set to become prompt next week.

Chinese market participants have downplayed the effect of a possible cut of up to 20 percent in nickel ore production by Philippine miners due to slow demand in China.

Andrew Caplan will step down from Glencore’s aluminium and alumina business by the end of the summer.

Ok Tedi Mining has suspended production after a fatality at its copper mine in Papua New Guinea on Thursday around 5pm local time, the company said on Friday.

Australia’s Queensland government has approved the transfer of Queensland Nickel’s (QNI) environmental authority (EA) to Queensland Nickel Sales (QNS), the new operator of the Yabulu nickel refinery.

THURSDAY MARCH 10 

Base metals ended Thursday LME trading in negative territory after the European Central Bank (ECB) delivered a bigger stimulus than expected.

The February run-up in base metal prices has been met with more jeers than cheers from physical traders who see the rally as illusory and damaging to the medium-term fundamentals.

Chris Adams is set to rejoin Sucden Financial, the company confirmed on Thursday.

The queue for aluminium at LME-registered warehouses dropped in January – waiting times fell in Vlissingen and Detroit while a new queue emerged in New Orleans, according to the exchange’s latest queue report.

The current nickel price is unsustainable - it needs to return to a level of $10,000 per tonne or else closures in capacity will be enormous, Macquarie said.

Copper production in Chile in January fell 11.1 percent year-on-year to 460,700 tonnes and was down 6.99 percent from 495,300 tonnes in December, state copper commission Cochilco said.

Some Chinese aluminium smelters are restarting idled capacity and commissioning new capacity after a rebound in domestic aluminium prices of more than 20 percent since late November. But smelters are not rushing to so, remaining cautious while there remains uncertainty over future price direction.

Ok Tedi is preparing its first shipment of copper concentrates since operations there resumed on March 1 and will hit full production shortly, the company said.

The Financial Conduct Authority (FCA), the UK’s financial markets regulator, has issued a broad discussion paper on client money distribution rules and the administration procedure that follows when investment firms collapse.

Spot premiums for special high-grade (SHG) zinc in India have eased slightly but production issues at Hindustan Zinc (HZL) continue.

Boliden has entered into an agreement with First Quantum to acquire the Kevitsa nickel, copper, gold and PGM mine in Northern Finland for $712 million in cash.

Australia-listed Avanco Resources has appointed Otavio Monteiro as general manager of its Antas copper mine in Brazil.

China’s ex-works producer prices in the nonferrous metal smelting and fabricating industry fell 10.7 percent year-on-year in February, according to data released by the country’s National Bureau of Statistics on Thursday.

WEDNESDAY MARCH 9 

Base metals ended Wednesday LME trading in positive territory while investors await tomorrow’s European Central Bank (ECB) meeting.

The easing in nearby LME spreads could revive inventory cash-and-carry financing and give a much-needed boost to European and US physical premiums.

Atlantic Copper could lift its copper production to a second consecutive annual record in 2016, CEO Javier Targhetta told FastMarkets.

The International Copper Study Group (ICSG) has revised its 2016 and 2017 market forecasts for refined copper although it still sees a largely balanced market.

Aleris’ North America and European regional order patterns are trending favourably, which should lead to improved earnings in 2016.

MMG swung to a massive loss of $264.4 million for 2015 from profit of $99.2 million a year earlier. It attributed the loss to lower average realised prices for all commodities and an increase to Century’s mine rehabilitation provision of $146.3 million in 2014.

SMA, Chile’s environmental regulator, is pursuing legal redress against the Sierra Gorda mine, which is jointly owned by Poland’s KGHM and Japan’s Sumitomo.

Chinese refined copper imports will drop almost 12 percent to a ‘new normal’ in 2016, due to slowing demand growth and higher domestic production, Chun Shen of Chinese broker JCC Jinrui Futures said.

Rusal posted a recurring net profit of $1.097 billion in 2015, a 125.7 percent rise from a profit of $486 million in the previous year, the Russian aluminium producer announced on Wednesday.

TUESDAY MARCH 8 

Base metals fell on Tuesday on the LME after forecast-missing Chinese trade data revived concerns about the health of the global economy.

Aluminium spreads were mixed during Tuesday afternoon LME trading – while the benchmark cash/threes moved into a contango, the backwardation in the sensitive ‘Tom’/next (tomorrow/next day) widened.

Miner-smelter Vedanta is in the market for acquisitions internationally and will probably bid in the forthcoming auctions of mines by the government of India, copper division CEO P Ramnath told FastMarkets today.

The current climate surrounding copper prices has made the market ripe for M&A, Tim Biggs, UK sector leader for metals and mining at consultancy Deloite said today.

The LME’s warehouse stock report for lead on March 9 will include a correction for Vlissingen figures, adjusting a previous reporting mistake, the exchange said.

Standard Chartered sees LME copper prices recovering to $6,000 once investors come back to copper in the second half of this year although they are held back in the short term by a weak Chinese physical market.

A strong gold price running concurrently with a rally in base metals has unsettled participants given their historically inverse relationship, analysts told FastMarkets.

Katanga Mining Ltd has suspended mining at its KOV open-pit copper-cobalt mine in the Democratic Republic of Congo (DRC) due to a geotechnical failure on the north wall of the operation.

Justin Rose of Luvata painted a bullish picture for copper, highlighting dynamic growth stories in healthcare, refrigeration, the automotive industry and conducting technology as reasons why it has strong potential.

China’s copper exports are likely to continue to rise on a year-on-year basis in March although the increase may not be as strong as that seen in February, market participants said.

The Yabulu nickel refinery in Australia owned by Queensland Nickel (QNI) has received a conditional offer of around A$23 million ($17 million) to support operations at the refinery, FTI Consulting said.

Buyers of P1020 aluminium ingots have tabled initial bids for second-quarter ingot supply to Japan at $110 per tonne on a cost, insurance and freight (CIF) basis to major Japanese ports (MJP), multiple sources directly involved in negotiations said.

Copper prices are expected to hold much of their recent gains as the market slowly tightens over the year on stagnant supply growth and a pick-up in demand growth, said ANZ Research in a report on Tuesday.

China’s imports of unwrought copper and copper products fell 2.9 percent month-on-month to 420,000 tonnes in February, according to preliminary data published by the country’s General Administration of Customs on Tuesday.

MONDAY MARCH 7 

The recent rally in base metal prices is not sustainable because it was technically led and not an accurate reflection of physical demand or supply, market observers said.

Rio Tinto’s Kennecott Utah Copper will lay off 200 employees or about 10 percent of its Utah workforce due to low metal prices and slower growth in emerging markets.

The global mining industry’s total budget for nonferrous exploration fell 19 percent to $9.2 billion last year, which is less than half of the record $21.5 billion budgeted in 2012, SNL Metals & Mining said.

Iron ore prices staged their strongest ever rally on Monday, rising nearly 20 percent on the bullish interpretation of weekend remarks made by Chinese Premier Li Keqiang, who pledged a GDP growth target of between 6.5 and 7.0 percent this year.

Zinc has been one the best-performing metals in recent weeks but a lacklustre demand profile and still large inventories could put a swift end to the recent rally, INTL FCStone’s Edward Meir said.

Transport issues might affect first-quarter supply from the Las Bambas copper-molybdenum mine in Peru.

The investigation into China’s scandal-ridden Fanya Metals Exchange, where thousands of investors have reportedly lost some 40 billion yuan ($6 billion) collectively, is moving ahead quickly, the Yunnan provincial government said.

There are no indications that Norsk Hydro violated any applicable laws, internal rules or guidance with its trading in Tajikistan, the Norwegian-based aluminium producer said on Monday.

China Construction Bank Corporation (CCB) is joining the LBMA Silver Price auction process, Thomson Reuters and CME Group said in a joint statement.

 

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.