ROUND-UP – FastMarkets top stories from the week ending July 15

A round-up of the most read FastMarket stories from the week ending July 15. 

FRIDAY, JULY 15 

Premiums for 6063 aluminium extrusion billets have come under further downward pressure in the US and Asia due to high imports while spot demand is moderate.

Base metals ended Friday trading on the LME mixed after a volatile week in which most climbed to multi-month highs, boosted by an improvement in risk sentiment.

A growing number of copper cathode traders in China have switched their focus to the concentrate market in the search for profits, reflecting the gloomy outlook of the cathode market.

FastMarkets editor Martin Hayes give his opinion on the brave new post-Brexit world

Charles McGarraugh, global head of metals trading at Goldman Sachs, is retiring from his position after 16 years at the company. He will be replaced by Don Casturo, a company representative told FastMarkets.

Russian nickel producer Norilsk Nickel is rebranding itself as Nornickel. 

China’s production of electrolytic aluminium fell 2.4 percent year-on-year to 2.69 million tonnes in June, according to data published by the country’s National Bureau of Statistics (NBS) on Friday.

China’s fixed asset investment in the non-ferrous metal smelting and fabricating industry fell 5.7 percent year-on-year to 250.8 billion yuan ($38 billion) in the first half of this year, the NBS said. 

THURSDAY, JULY 14

Base metals ranged from steady to higher levels during Thursday’s LME sessions, mostly holding around this week’s multi-month highs and looking to lock in and build on current short-term positive sentiment. 

US trade policy needs to be geared towards supporting technology and innovation and away from ill-conceived attempts to artificially prop up the price of aluminium.

The increased involvement of funds is making copper prices harder to forecast and trade - the latest example lies in is the metal’s baffling surge on the Shanghai Futures Exchange on Wednesday.

The LME has initiated a market-wide consultation proposing to control warehousing costs by imposing caps on maximum charges. But it will not consult on a FOT conversion as part of its warehouse reform due to lack of appetite for its proposed changes.

Access World - formally Pacorini Metals AG – has received approval to list metal in Comex sheds.   

Thai zinc producer Padaeng will close its Mae Sot Mine in August after its zinc reserves finally ran out and will end refined production of its LME brand ingots this year, FastMarkets understands.

Arthur (Lin) Mei has joined Hengfeng Bank’s head office on July 1 as director of Commodity Center in its financial markets department, FastMarkets understands.

The latest Chinese June copper import data has sparked mixed views on the state of copper demand in China.

WEDNESDAY, JULY 13 

Comex copper futures jumped to a two-month high early Tuesday morning in US before overbought conditions led to a minor consolidation before the final settlement. 

A growing number of smelters, trading houses and metal hedge funds have been involved in the latest wave of deliveries of copper to LME-listed warehouses while the market is depressed.

China should not be solely blamed for the slow death of the US primary aluminium industry, consultancy UNO International Trade Strategy said, warning that onerous and misplaced trade barriers will only damage America’s thriving downstream sector.

Trevali Mining has achieved commercial production at its Caribou Zinc mine following record production in June, the Canadian miner said.

Peru’s troubled La Oroya polymetallic smelter could reopen if Peru’s president-elect gets his way.

Production and consumption of molybdenum both declined in the first three months of this year, with a steeper fall in output moving the supply/demand balance into deficit, figures issued by International Molybdenum Association (IMOA) show.

South Korea has bought copper and tin in new tenders this week, according to the country’s state-run Public Procurement Service (PPS).

Tongling Nonferrous Metals Group, China’s leading refined copper producer, has warned of a 77-92 percent year-on-year drop to its net profit for the first half of this year owing to the sharp decline in product prices and increase in finance expenses. 

Canada-based Strongbow Exploration Inc has formally completed its acquisition of the bankrupt and long-closed South Crofty tin mine in the UK from administrators and will now carry out an assessment of the project.

China’s copper metal imports declined on a month-on-month basis for the third straight month in June, with the trend likely to continue in the near term, market participants said.

The Shanghai Futures Exchange has approved the zinc production from Yunnan Chihong Zinc & Germanium’s Huize plant in southwest Yunnan for delivery settlement effective Monday, the exchange said in a notice.

The board of Eramet’s Société Le Nickel (SLN) has approved a 200-million-euro ($221 million) loan deal proposed by the French government, paving the way for operations to continue at the New Caledonian nickel producer.

TUESDAY, JULY 12 

Activity in the physical base metals markets was muted this week amid the typical summer slowdown but participants are closely watching the Philippines as well as recent copper deliveries into LME-listed sheds in Asia.

Comex copper futures jumped over three percent in the largest intraday move since April 11 with investor risk-on appetite returning following calmer market conditions.

Aluminum imports of ingot, scrap and mill products into the US and Canada (excluding cross-border trade) totalled 650 million pounds or 294,000 tonnes in May, up 14.9 percent year-on-year, according to the Aluminum Association.

The waiting time for aluminium delivered out of LME-registered warehouses dropped in June, according to the exchange’s latest queue report.

US consumption of aluminium extrusions totalled 5.1 billion pounds (2.3 million tonnes) in 2015, an increase of 4.6 percent over 2014, the Aluminum Extruders Council (AEC) and the Aluminum Association said.

Volatility levels in LME nickel traded options have reached a seven-month high around 37.40 percent due to the rise in the underlying market to its best since late-October 2015, which has sparked an upturn in business, traders said.

Supply-side issues have prompted Goldman Sachs to revise its price forecasts for nickel and zinc.

MONDAY, JULY 11

Base metals ended Monday LME trading mostly in positive territory - risk-on sentiment returned after last Friday’s robust US jobs report, traders said.

The CME Group’s aluminium MW US Transaction Premium (AUP) contract trended lower for another week as high import levels and soft summer demand have given the market a pessimistic slant.

Market participants are at odds over the reasons why volumes on the London Metal Exchange (LME) fell 7.8 percent in the first half.

The Philippines has made official its audit of all operating mines in the country while suspending the approval of new mining projects in the country.

Around 15 percent of global nickel supply from the Philippines is at risk following the suspensions of two nickel miners on environmental grounds, Morgan Stanley said.

switch to liquid metal shipments artificially tightened the aluminium market in China during the second quarter of this year, Citi Bank said while forecasting a decline in the price.

China’s Aluminium Corporation of China (Chinalco) still aims to lift its aluminium fabricating capacity while extending its fabricating footprint overseas, it said.

The queues to take aluminium out of LME-registered warehouses increased in May due to a series of cancellations, according to the exchange’s latest queue report.

China’s Zijin Mining is planning to issue 4.8 billion yuan ($717 million) in non-public shares on the Shanghai Stock Exchange and will use most of the proceeds for the construction of its Kolwezi copper mine project in the Democratic Republic of Congo.

China’s ex-works producer prices in the non-ferrous metal smelting and fabricating industry fell 6.1 percent year-on-year in June, according to data released by the country’s National Bureau of Statistics on Sunday.

 

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.