ROUND-UP – FastMarkets top stories from the week ending July 8

A round-up of the top FastMarkets stories from the end ending July 8. 

FRIDAY, JULY 8 

Base metals ended the LME trading week in unspectacular fashion - having slogged it out in thin conditions earlier, they came off earlier lows to finish little changed.

Copper concentrate treatment and refining charges (TC/RCs) remained at 2016 highs this week while spot demand was thin and smelters continue to use the oversupplied market as leverage against sellers of clean material.

The unsustainable flow of primary aluminium imports into the US will slow in the second half of the year because of a lower Midwest premium and stronger Russian and Canadian currencies.

Rob McMillan, formerly of GECX Group, has joined global merchant commodities firm Hartree Partners.

The recent rally in base metals prices will be hard to sustain because it was driven more by liquidity and inflation expectations rather than the fundamentals, Macquarie said.

Heavy rains and flooding in parts of China have resulted in transport delays for some metals producers, with the impact most pronounced for aluminium due to the already-tight domestic spot market.

BHP Billiton has settled mid-year annual copper concentrates treatment and refining charges (TC/RCs) with two key smelters in Japan and South Korea in the triple-digits, industry sources claimed.

Deliverable copper stocks at warehouses in the Shanghai Futures Exchange system edged up 236 tonnes or 0.1 percent week-on-week to 162,130 tonnes as of July 8, according to data from the exchange. This is the second consecutive week stocks have increased.

THURSDAY, JULY 7 

Base metals headed back to the lower end of their ranges during late-Thursday LME trading, with copper touching two-week lows against a backdrop of day-trade liquidation and a steadier dollar.

Comex copper futures declined to a two-week low as a stronger dollar weighed on prices.

Imports of primary aluminium and alloy into the US over the first four months of the year surged thanks to large increases in shipments from Russia, the United Arab Emirates (UAE) and Canada.

Century Aluminum will keep open its Mt Holly smelter after renegotiating an agreement with a third party to provide 75 percent of its power requirements.

Rhetoric from the Philippines government on mining may have sent nickel prices to multi-month highs but improved fundamentals are needed to sustain and even extend those highs.

Jean-Marc Germain will assume the role chief executive officer at Constellium effective 11 July 2016, the aluminium product manufacturer announced on Thursday.

The Las Bambas copper mine in Apurimac in Peru has achieved commercial production on 1 July 2016, MMG, the majority owner of the mine.

WEDNESDAY, JULY 6 

Base and precious metals markets saw minor adjustments following the release of the Federal Reserve meeting minutes, which showed a majority of Fed members were cautious to adjust rates following poor US labour data and the UK referendum.

Some of the copper being delivered into LME-listed warehouses in Southeast Asia appears to be from significant stockpiles sat in Shanghai’s bonded zone, FastMarkets’ analysis suggests.

The benchmark third-quarter premium for aluminium supply contracts in Japan looks likely to settle at $90-93 per tonne after several deals were confirmed in that range, industry sources said.

Base metals cut losses during late-Wednesday PM LME trading, with prices heavily influenced by system-based activity and similar trends in wider markets, traders said.

The London Metal Exchange (LME) has chosen software and exchange IT specialist company Sinara Consultants to develop its new matching system.

The copper market is far from stable and, despite the recent price rises, participants should brace for more volatility because it has yet to find a bottom, Barclays Commodities said in a note.

The LME molybdenum market continued to shrink on Wednesday – a pattern of falling volumes and open interest was exacerbated by a tumble in inventories, further damping down on liquidity.

The Shanghai Futures Exchange (SHFE) has approved Shandong Hongqiao New Material Co’s aluminium ingot brands, it said in a release on Wednesday.

JLY Metals has applied for category five membership of the LME, the exchange said on Wednesday

TUESDAY, JULY 5 

Base metals fell across the board on the LME on Tuesday when the US’ return to the market after an extended weekend break coincided with Monday’s rally running out of steam.

A flurry of technical and short-covering in the futures markets has put much of the physical metals sector on the sidelines over the past week and quelled any arbitrage-related demand in China for now.

Aluminium traded options are expected to see the most interest during Wednesday’s LME July declarations, with a cluster of high open interest for calls at strikes stretching either side of the ATM (at-the-money) level near $1,650.

Erus Metals, which is partly owned by commodity trader Gerald Metals, has received approval from the LME to list copper in its sheds in Panama City, it said on Tuesday.

The LME will consult its members on new policies and amendments to its rulebook intended primarily to shore up its ability to intervene when markets turn disorderly.

The Philippines’ plan to review mining operations in the country will support nickel prices but the actual impact on nickel ore supply will be limited, said Beijing Antaike.

  

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.