ROUND-UP – FastMarkets top stories from the week ending Sept 2

A round-up of the top FastMarkets stories from the week ending September 2. 

FRIDAY, SEPTEMBER 2 

Copper treatment and refining charges (TC/RCs) have held at firm levels in the past two weeks, which reflects ample availability of concentrate, even though Chinese smelters have continued to stock up ahead of a typically slow buying season in the fourth quarter.

Base metals apart from aluminium ended LME trading on Friday in positive territory after a mixed US jobs report made a near-term interest rate rise unlikely.

Comex copper futures erased previous gains to settle near unchanged as a stronger dollar capped the potential upside.

Deliverable copper stocks at warehouses in the Shanghai Futures Exchange (SHFE) system fell 13,399 tonnes to 152,404 tonnes as of September 2, according to data from the exchange.

THURSDAY, SEPTEMBER 1 

Workers at Anglo American’s Los Bronces mine in Chile have said they will strike in response to the company’s end-of-contract bonus offer.

One of the two unions at Codelco’s El Salvador copper mine in Chile has voted to go on strike after rejecting the company’s proposal for a new collective wage agreement starting next year, according to local media reports.

Chile’s mining regulator on Tuesday ordered a halt to certain operations of two major copper mines - one owned by Codelco and the other by Freeport-McMoran – following separate fatal accidents.

Codelco’s annual copper premium is set to fall to its lowest for at least seven years in 2017 because Chinese buyers will need to see a significant reduction in the benchmark to renew their long-term supply contracts rather than move to the spot market, sources said.

Speculation that the SHFE might delist one of Nornickel’s brands after the recent closure of its Polar division has received mixed responses from market participants in Asia.

United States aluminium premiums have crumbled below the psychologically and technically important six cents per pound barrier due to record high imports, softening demand and a lingering inability to easily finance stocks because of sloppy London Metal Exchange spreads.

The London Bullion Market Association (LMBA) has whittled down the shortlist for its request for proposal (RfP) to three parties – these are two exchanges and one fintech company, FastMarkets understands.

Americans’ appetite for new car purchases is waning as light vehicle sales disappointed in August.

Base metals ended Thursday’s LME trading session mostly in positive territory after upbeat Chinese data boosted sentiment, traders said.

The LME and LME Clear will return to their offices in 10 Finsbury Square on Monday, September 5.

Chilean mining executive Diego Hernández has been elected president of the Chilean mining association Sonami (Sociedad Nacional de Minería) for the 2016-2019 period.

WEDNESDAY, AUGUST 31 

Base metals ended Wednesday LME trading mixed but for the most part little changed – investors are now awaiting Chinese manufacturing PMI data that is scheduled for release tomorrow before Friday’s blockbuster jobs report.

Copper futures drifted around the previous settlement with investors content to keep the red metal fixed to a tight-range until Chinese manufacturing data is released tomorrow.

Nyrstar said Wednesday it has started hedging its near-term zinc production to mitigate potential downside risks to the zinc price. 

The eventual delisting of several Nornickel (formerly Norlisk Nickel) brands could prove a tricky endeavour given the large amount of metal sitting off-warrant, ICBC Standard Bank said in a note.

 A steady jump in LME copper inventories over the past week is a warning sign of an economic slowdown in China.

The market for copper cathode in the US has deteriorated over the past several weeks – soft demand and better scrap availability have led to an uptick in warehouse stocks and lower premiums.

Freeport-McMoran said a 33-year old worker died at its El Abra acid discharge terminal in Chile, the company said in a release on Tuesday.

The Shanghai aluminium backwardation that started late in April due to a tight domestic market could play out for longer – an increase in domestic supply has been slower than anticipated, market participants said.

Thailand Smelting and Refining Company (Thaisarco) has signed a tin concentrate off-take agreement with Australia’s Elementos Limited paving the way for the latter to move its Cleveland tin, copper and tungsten project in northwest Tasmania into production.

TUESDAY, AUGUST 30 

Physical metal markets participants had better be enjoying the last rays of summer sun because the fast-approaching mating season is shaping up to be a gloomy affair.

International aluminium producers and consumers in Japan have kicked off negotiations for fourth-quarter supply of metal this week with an initial premium offer of $82 per tonne, several sources confirmed to FastMarkets.

Nornickel – the recently rebranded Norilsk Nickel – said it is cautiously positive about the outlook of nickel given robust demand from the stainless steel sector and tighter supply from the Philippines, but warned about growing refined metal stocks and supply from Indonesia. The company reported a net profit of $1.3 billion in the first half of this year, down 13 percent from the same period last year

Major listed Chinese copper smelters have started filing their half-year financial reports and, judging from the production numbers, a drop in domestic refined copper metal output for the rest of the year is unlikely.

South Korea’s Public Procurement Service (PPS) has bought a total of 2,000 tonnes of duty-free aluminium ingots at premiums of $60.5-64.3 per tonne basis cost, insurance and freight (CIF) Korea.

Base metals ended Tuesday LME trading mixed, with copper selling off to a fresh two-month low after the resumption of trading following an extended weekend break in the UK.

Domestic nickel ore sales by Indonesian state-owned miner PT Aneka Tambang (Antam) has jumped in the first half of this year as local demand for nickel ore grew on rising smelting capacity in the country.

Shipments of aluminium extruded products by US and Canadian producers totalled 409.6 million pounds or 185,793 tonnes in July, down seven percent year-on-year, according to the Aluminum Association.

MONDAY, AUGUST 29

Base and precious markets were little changed to start the new week with UK investors sidelined due to a bank holiday.

Aluminium rolled products producer Aleris has signed a definitive agreement to be acquired by a subsidiary of China Zhongwang Holdings Ltd in a deal valued at $2.33 billion.

Aluminium Corp of China (Chalco) reported a surge in profit to in the first half of this year but has warned of oversupply pressure supply mounting in the domestic aluminium market again in the second half of the year.

Chinalco Mining Corp International (CMCI) has cut its 2016 guidance for copper in concentrate production at its Toromocho copper mine in Peru by 7-12 percent to around 160,000-170,000 tonnes.

The recent slowdown in the copper market may be an early warning sign of weakening in China’s economic momentum in the second half, Barclays Research said.

Total profits among China’s non-ferrous metal smelters and fabricators rose 23.2 percent year-on-year to 83.07 billion yuan ($12 billion) in January-July this year, according to data published by the Chinese National Bureau of Statistics (NBS) last Friday.

Nornickel (formally Norilsk Nickel) said last Friday its outdated nickel plant in the city of Norilsk in Russia has been fully decommissioned two months ahead of schedule.

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.