A round-up of FastMarkets’ top stories published during the week ending March 4.
FRIDAY MARCH 4
Severe landslides across key transport routes have caused several metal mines in Peru to cancel or delay shipment of concentrates to their customers.
CME Group is expanding its base metal contracts suite with the launch of a new duty-paid European aluminium premium futures contract.
Freeport-McMoRan Inc has agreed to sell part of its stake in copper-gold project in Serbia to Canada’s Lundin Mining Corp for as much as $262.5 million.
Moody’s Investors Service has downgraded the credit ratings of BHP Billion to A3 from A1, while assigning a negative outlook, as deterioration of the company’s earnings and cash flow lead to significantly weaker credit metrics.
The board of Chinalco Mining Corp International has appointed Liu Yuewei as its executive director and CEO effective March 3, 2016.
Base metals prices surged on the LME when investors returned to risky assets, pushing metals such as copper and tin through key technical levels to multi-month highs.
Gold kilobars for immediate delivery largely moved into discounts, with the rising international price drawing out scrap supply and leaving most prospective buyers on the sidelines.
Spot copper concentrate treatment and refining charges have been stable for the past two weeks but the market is wary that they could move higher or lower in the coming weeks.
THURSDAY MARCH 3
Hindustan Zinc (HZL) has played down the impact of an issue at its Rampura Agucha zinc mine that briefly compromised its concentrate production and its output of refined metal – despite local premiums soaring last week.
The US Midwest aluminium premium had shown remarkable resilience but it is now moving lower due to tight LME spreads and some fresh demand concerns.
Copper futures rose for the fourth straight day as investors anticipate additional stimulus measures at the conclusion of a Chinese planning meeting.
LME steel billet prices fell precipitously with a 57-percent decline in the cash price to what is the lowest since the contract was introduced eight years ago.
Canadian Zinc Corp signed agreements to sell zinc and lead concentrates at its Prairie Creek Mine in Canada to Korea Zinc and Boliden.
KGHM’s total impairment losses after including tax amount to $1.289 billion (5.063 billion zloty). It also updated its commodity price forecasts to conform with current market consensus and reviewed its previous calculations of carrying amount and recognised impairment numbers.
Jack Carlson, Southwire’s president of North America, has retired from his role, the US-based cable producer said in a release.
Trafigura’s investment arm Galena will provide the financing of up to $20 million to fund placing the Kapulo copper mine in Congo on care and maintenance.
WEDNESDAY MARCH 2
Base metals ended a positive and more-active Wednesday LME session on an upbeat note, with many concluding near multi-month highs, leaving them poised to build on the session’s gains.
Comex copper futures rose for the third consecutive day as the price reached a mid-November high amid improved sentiment stemming from recent US data.
Warehouse operators registered with the LME are braced for an extended struggle with the exchange over its proposal to implement charge-capping (CC) on rents and FOTs.
Kevin Brazier, who has held a variety of positions associated with the LME since the late 1970s, has left his current role as an independent broker at Ring Dealer Member (RDM) Sucden Financial.
Metals industry veteran Jeremy Jevons has resigned from LME Ring Dealer Member (RDM) Marex Financial Ltd, where he held a senior client liaison role.
Copper, zinc, aluminium and nickel stocks in Shanghai’s bonded zone increased last month due to the Chinese New Year and unfavourable post-holiday arbitrage opportunities.
The Ghanaian government has reversed its decision to introduce a 10-percent export tax on unprocessed precious minerals, reverting to a rate of three percent, according to information provided to FastMarkets by Ghanaian authorities.
The Dubai Gold & Commodities Exchange (DGCX) has appointed former banker Abdullah Harmoozi to take charge of business development for the Middle East and North Africa (MENA) region at the exchange.
Moody’s downgraded its outlook on the Chinese government’s credit ratings from stable to negative, it said, citing the country’s rising debt and falling foreign exchange reserves.
TUESDAY MARCH 1
Inventory trends are no longer a good barometer of supply and demand as falling stock levels can be the result of rising warehouse rental rates or favourable exchange arbitrage as well as genuine fabrication or manufacturing consumption, Citi said.
Physical premiums for base metals were down this week in key areas, pressured lower by higher LME prices and poor physical demand. Click here for the full price chart
Base metals have been showing amazing fighting spirit, says Sandeep Daga. They have held up quite well despite a rout in Chinese equities, a sell-off in risky assets, a strengthening dollar and poor macro data.
Freeport-McMoRan would be reluctant to sell its Cerro Verde mine although all of its assets are up for sale, vice chairman president and CEO Richard Adkerson said.
Copper production in Chile fell 14 percent in January from a year earlier, data from the country’s National Statistics Institute (INE) showed, while the world’s biggest producer struggles with low metals prices.
Following a pipeline rupture a production line of its Andina copper mine in Chile, Codelco said on Monday that operations at the site were being gradually normalised.
Glencore has posted a $4.96 billion net loss attributable to equity holders in 2015. This compared with a net profit of $2.31 billion in 2014.
Glencore will review its Koniambo nickel mine in June this year and could walk away from the project it is not deemed to be generating money, CEO Ivan Glasenberg said.
Glencore will restart its shuttered zinc capacity once it is confident that the market could handle increased availability, CEO Ivan Glasenberg told investors during a conference call on Tuesday.
Glencore’s sales volume for metals rose in 2015 other than for zinc metal and concentrates, which fell nine percent to 3.1 million tonnes, aaccording to the company’s preliminary results published Tuesday.
The SHFE will lift its warehouse storage capacity for aluminium next year by approving eight new warehouse companies to set up sheds in China’s Henan, Shandong, Chongqing and Tianjin provinces.
US and Canadian producers aluminum extrusion shipments totalled an estimated 419.4 million pounds (190,000 tonnes) during January, down 0.6 percent year-on-year, while sheet and plate shipments were 662.8 million pounds (300,000 tonnes), off 3.8 percent.
MONDAY FEBRUARY 29
Two warehouse operators have reduced their 2016-2017 LME fees, lowering the average increase in warehouse rent among LME-registered warehousers to seven percent from the previous average of 10 percent.
Zinc treatment charges moved lower in February when supply cuts squeezed the availability of concentrates in the Western world.
The recent tightening of LME aluminium spreads has prompted producers to change tack in their initial offers for second-quarter MJP ingot supply contracts as well as a drop in spot premiums.
The waiting time for aluminium in LME-registered sheds in Vlissingen has fallen dramatically due to new warehousing rules and a huge rewarranting of metal that has lifted availability to four-month high.
Chinese tin production is likely to fall less this year than envisioned if smelters to do not carry all off of the cuts that were announced last month, especially in the current environment of rebounding prices.
India’s government has increased its tax on imports of primary aluminium and aluminium products as part of its latest budget.
A confluence of supportive factors has driven copper prices higher but investors should be cautious because the fundamentals still pose risks, Barclays Research said.
Australian nickel producer Queensland Nickel (QNI) will halt production for around eleven days due to a lack of nickel ore, a spokesman at FTI Consulting, the administrator for the company, said.