ROUND-UP – FastMarkets most read stories from the week ending May 27

A round-up of the top FastMarkets stories for the week ending May 27: 

FRIDAY, MAY 27 

Base metals ended in positive territory on Friday, with some end-of-month book-squaring taking place ahead of the long weekend.

Scale Distribution, partly owned by Australia’s Macquarie Group, has withdrawn from LME warehouse services with immediate effect. 

The LME has listed a new warehouse company, Verbrugge International BV, in Vlissingen with immediate effect.

Copper concentrate treatment and refining charges (TC/RCs) have risen above $100 for the first time this year – deals are now taking place firmly above the annual benchmark level for 2016.

Spot gold premiums have increased this week in most locations after the international gold price fell to an eight-week low on Friday morning in London, succumbing to weaker oil prices and a stronger dollar.

Bullion market participants are divided on the future of London’s gold market while the London Bullion Market Association (LBMA) mulls ideas for its improvement.

Chinese exports of tin in shapes other than ingot were offered at markedly low premiums at the start of this month when there was a wide differential between LME and SHFE prices.

Zinc has been the darling of metals analysts for years – but every year it falls short. So will 2016 be the year things come together?

 Birla Copper has restarted operations at its Dahej smelter in Gujarat, FastMarkets understands, following a period of maintenance.

Duncan Wanblad, CEO of Anglo American’s base metals business, will add the strategy and business development portfolio of the company to his responsibilities from July, Anglo American said on Friday.

Total profits among China’s non-ferrous metal smelters and fabricators rose 6.6 percent year-on-year to 37.78 billion yuan ($5.76 billion) in January-April, according to data published by the Chinese National Bureau of Statistics (NBS).

THURSDAY, MAY 26 

The LME’s latest initiative to provide cheaper, direct access to Select, its electronic trading platform, has worried exchange members who claim they will be increasingly bypassed.

Base metals reversed direction during the latter stages of LME trading on Thursday – an early corrective rally petered out while spot crude oil prices were struggling to stay above $50 per barrel, a level regained for the first time this year.

The CME Group will launch its new aluminium A380 alloy futures contract next week but the seeds were planted seven years ago when the first queue formed at London Metal Exchange-bonded warehouses in Detroit.

The CME Group has gained a foothold in the aluminium market by launching simple cash-settled futures contracts targeted at regional participants.

The physical copper market in the US has suddenly become much tighter because scrap is hard to source while Comex and LME warehouse stocks have fallen.

Alcoa is looking to sell its remaining Spanish aluminium smelting operations at San Ciprian, La Coruña and Avilés and is sounding out potential buyers

Molybdenum prices continued their second-quarter rally in Europe this week and, after a particularly sharp mid-week movement, hit their highest levels since late-January 2015.

The latest Chinese metals data published by the National Development and Reform Commission (NDRC) showing higher April copper output and lower zinc production reflects the different fortunes of Chinese copper and zinc smelters.

China’s refined copper production rose 11 percent year-on-year to 2.72 million tonnes in January-April, according to data published by China’s National Development & Reform Commission (NDRC) on Wednesday.

South Korea has purchased 1,000 tonnes of copper at a premium of $64 per tonne over London Metal Exchange (LME) cash prices on a cost, insurance and freight (CIF) basis via a tender, the state-run Public Procurement Service (PPS) said.

WEDNESDAY, MAY 25

Base metals ended Wednesday LME trading showing mixed trends - consolidation and corrections were seen following recent losses, with copper standing out on the upside, hitting a one-week high at one stage.

The Baltic Exchange is facing a future under new overseas ownership, an increasing sign that money has no boundaries in a shrinking international marketplace. The world’s premier maritime trading and information hub today entered into exclusive talks with SGX.

Chinese copper smelters continue to deliver metal into LME-listed warehouses in southeast Asia because of attractive warehouse incentives and while the physical market is lacklustre.

Primary aluminum production in Canada increased for the eleventh consecutive month in April, according to data provided by the Aluminium Association of Canada.

Shipments of aluminium extruded product by US and Canadian producers totalled an estimated 454.7 million pounds (206,000 tonnes) during April, a 4.2 percent year-on-year increase.

Market participants are unconvinced by nickel’s bull story while prices remain week despite a positive fundamental backdrop.

Industrial metals prices are set to notch up their worst monthly performance for four years – the sector has markedly underperformed compared with other markets, S&P Dow Jones Indices said.

China will strengthen its oversight on commodities futures trading in the country even after its recent successful clampdown on frenzied speculation, Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), said.

Jan Peisert will become president of KGHM International, replacing Wojciech Kedzia, KGHM said on Wednesday.

China is looking to open up its commodities futures markets further to overseas participants and domestic financial investors while seeking a bigger say in pricing commodities in the global market.

 Consumers and trading houses expect the third-quarter benchmark for P1020 aluminium ingots for delivey to major Japanese ports (MJP) to decrease, with most predicting a settlement at $90-100 per tonne. Negotiations will start next week. 

The CME Group announced that its Comex copper contract hit an open interest record of 211,069 lots on Monday, which marks the tenth OI record of 2016.

TUESDAY, MAY 24 

Base metals moved away from their earlier multi-month lows during late LME trading on Tuesday, with some technical corrective buying taking place, although end-of-day levels were still mixed.

Most major physical markets were unchanged this week, with copper and aluminium in particular still struggling for any traction across Europe and Asia.

Availability of copper in LME-registered sheds tightened in New Orleans on Tuesday – on-warrant material fell to just 32,425 tonnes, the lowest since December 2012.

A slowdown in stainless steel demand and a reversal in the earlier uptrend in Chinese stainless prices are weighing on Shanghai Futures Exchange (SHFE) nickel prices, market participants said.

South Korea has bought 2,000 tonnes of aluminium ingots at premiums of $101-104 per tonne over London Metal Exchange (LME) cash prices, the country’s Public Procurement Service (PPS) said.

Aluminium producer UC Rusal has appointed Scott States as the president of Rusal America Corporation.

Indonesia’s PT Aneka Tambang (Antam) has restarted its No.2 electric smelting furnace (FeNi II) after completing repairs to the transformer unit.

China’s refined nickel and nickel alloy imports jumped around 2.5-times year-on-year to 49,012 tonnes in April, according to latest data from the Chinese customs.

Australia’s Bell Bay Aluminium (BBA) plans to return to full production in around five weeks on sufficient power supply owing to significant rainfall, the company said in a statement late last week.

China’s import of refined zinc fell 23.6 percent year-on-year and 49.2 percent month-on-month to 39,106 tonnes in April, according to latest data from the Chinese customs.

MONDAY, MAY 23 

Base metals were hit by a fresh wave of selling pressure during Monday LME trading before limping towards the close to finish little changed from the previous session.

Monthly Chinese imports of tin ores from Myanmar edged lower in April but in the year to date they remain almost double last year’s levels.

The CME Group’s Aluminum MW US Transaction Premium (AUP) contract continued to trade just below 8 cents per pound, while both volumes and open interest spiked last week.

Macquarie expects copper to average a low of $4,893 per tonne this year and does not see it returning above $6,000 until 2021.

Macquarie has lifted its 2016 price forecast of zinc - its favoured LME long – citing its bullish fundamental story.

China’s exports of aluminium fabricated products fell six percent year-on-year to and was unchanged month-on-month at 360,000 tonnes in April, according to final trade data published by the country’s General Administration of Customs.

Copper on the Shanghai Futures Exchange fell on Monday as the market stayed bearish amid a lack of positive factors to support prices.

China’s import of unwrought copper and copper alloy rose 6.3 percent year-on-year but fell 24.5 percent month-on-month to 400,000 tonnes in April, according to final trade data released by the country’s General Administration of Customs on Saturday.

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.