A round-up of the top FastMarkets stories from the week of August 26:
FRIDAY, AUG 26
Zinc concentrate treatment charges (TCs) have dipped to record lows in August after traders bought aggressively in anticipation of a resumption in smelter buying in the fourth quarter.
Indonesian ferronickel mills appear to be taking advantage of Chinese nickel pig iron (NPI) producers’ limited ability to produce at capacity, import data suggests.
Codelco lifted copper production to a record 843,000 tonnes and cut costs by nine percent in the first half of this year but warned of an uncertain outlook due to low prices and massive investment needed to upgrade its old mines.
Base metals ended the week mixed on the LME ahead of a long weekend - the exchange will be closed on Monday for a bank holiday in the UK.
The Chinese domestic zinc concentrate market has grown increasingly tight due to less availability of Australian material, JP Morgan noted.
JP Morgan expects the Chinese copper market to record an 800,000-tonne surplus in the first three quarters of this year amid strong domestic smelting output and lukewarm demand.
Federal Reserve chairwoman Janet Yellen said that the argument for another rate hike “has strengthened in recent months” during her speech in Jackson Hole, Wyoming, which led to wild fluctuations in commodity and equity markets and a weakening of the dollar.
The ‘Tom’/Next spread for zinc tightened during Friday afternoon trading as the dominant position holder increased, LME data showed.
Deliverable copper stocks at warehouses in the Shanghai Futures Exchange (SHFE) system fell 6,816 tonnes to 165,803 tonnes as of August 26, according to data from the exchange.
THURSDAY, AUG 25
Base metals were something of a mixed bag on Thursday – the weakness in copper extended to aluminium, nickel and tin but zinc, lead and tin edged higher.
The time when traders could make big money simply by sitting on aluminium stocks is long gone. It’s a tougher world out there now - tiny contangos, low premiums and aggressive competition are combining to cut margins and threaten market share.
The US has been inundated with too much aluminium metal over the past nine months but that’s not the only reason that premiums are falling. Not enough people are talking about the fact that demand has weakened beyond what is seasonally normal.
The tightening of the nearby LME zinc spreads could bring more of the metal onto the exchange, market participants told FastMarkets.
Poland’s Internal Security Agency (ABW) has asked prosecutors to investigate copper miner KGHM over the purchase of Canada’s Quadra FNX, which has metal deposits in Chile, it said.
Copper market supply from dominant producer Chile faces a shake-up after a calmer-than-average year, with miners Anglo American and Codelco starting what could become fiercely contested wage negotiations with workers at mines there.
Chinese imports of tin ore and concentrates from Myanmar rose 80.2 percent year-on-year to 36,219 tonnes in July, according to latest customs data.
Former LME CEO Martin Abbott has been appointed non-executive chairman of Ambrian PLC on an interim basis, the company said on Thursday.
Chinese imports of refined zinc slumped 51.1 percent year-on-year to 16,817 tonnes in July, according to latest data from the Chinese customs. The July figure was also nearly half of the June total.
The China Nonferrous Metals Industry Association (CNIA) has come up with a work plan which includes expanding commercial stockpiling from aluminium and other nonferrous metals.
South32 is expecting lower nickel, zinc and lead production in its fiscal year ending June 2018, according to its annual report published Thursday.
UC Rusal’s adjusted net profit fell 78.6 percent year-on-year to $40 million in April-June on weak aluminium prices, the Russian aluminium producer said on Thursday.
WEDNESDAY, AUG 24
Refined Bangka Tin (RBT) has restarted production under new management some six months after Indonesia’s largest independent tin smelter was shuttered due to internal factors, sources told FastMarkets.
Base metals apart from tin ended Wednesday LME trading in negative territory – copper fell to its lowest since the end of June while nickel dropped below the key psychological $10,000 level.
Glencore has agreed to sell a 30 percent stake and all of the gold and part of the copper output from its Ernest Henry copper-gold mine in Australia to Evolution Mining for A$880 million ($670 million) as part of its plans to reduce debt.
Large amounts of off-warrant aluminium have been dumped into London Metal Exchange-listed warehouses in Korea and there could well be further deliveries, traders told FastMarkets.
KGHM will not reach its production target of one million tonnes of copper by 2020 set by the Polish copper and silver miner’s previous management, it told FastMarkets today.
The London Metal Exchange (LME) and LME Clear will continue to work from their recovery sites in Chelmsford and Wapping until early September, the exchange said today.
TUESDAY, AUG 23
Base metals ended Tuesday LME trading mixed - copper fell to a six-week low after more metal arrived in LME-listed warehouses while tin climbed to its highest since February last year amid tightening supply.
The gloom in the physical aluminium market deepened this week, with premiums in Japan and the US both crashing to multi-year lows amid oversupplied conditions and sloppy London Metal Exchange spreads.
The global refined lead market was in a surplus of 37,000 tonnes during the first half of the year while the global market for refined zinc was in deficit by 138,000 tonnes, the International Lead and Zinc Study Group (ILZSG) said.
Noble Group has scaled back its base metals business in China, with several key traders having left the company, sources with direct knowledge told FastMarkets.
The price deterioration for major base metals – including copper, aluminium, nickel and zinc – seen in late 2015 and early 2016 has likely bottomed, but material improvement from current price levels over the next 12-18 months is unlikely, Moody’s Investors Service said.
The LME will implement its cap on fees for position transfers from September 1.
Ivan Petev has left Macquarie Bank in Singapore and is currently on gardening leave.
SHFE zinc is due a near-term correction, analysts believe, after surging around 50 percent since November last year.
South Korea has purchased 1,000 tonnes of lead via a tender at a premium of $130 per tonne, according to the country’s state-run Public Procurement Service (PPS).
Singapore Exchange (SGX) will buy the Baltic Exchange for around 87 million pounds ($114 million) in a deal that is expected to close by end-November.
MONDAY, AUG 22
The global refined copper industry recorded a production deficit of around 222,000 tonnes in January through May, which equates to a seasonally adjusted deficit of about 181,000, the International Copper Study Group (ICSG) said on Monday.
The CME Group’s aluminium MW US Transaction Premium (AUP) contract on Friday fell it its lowest point since being launched in 2013.
Base metals finished LME trading on Monday in negative territory - data showing higher exports of both aluminium and copper from China soured sentiment.
Cliveden senior trader Paul Bushell is leaving the Zug-based metals trading company after almost five years there, several sources confirmed to FastMarkets.
The LME has halved fees for the month of August to $0.25 per lot per leg per side from $0.50 previously as a goodwill act.
CME Group will expand its base metals portfolio with the introduction of Alumina FOB Australia (Metal Bulletin) futures and Alumina FOB Australia (S&P Global Platts) futures, the exchange said on Monday.
Open interest in the copper contracts on the Shanghai Futures Exchange fell for a fifth straight week last week while fund and investor interest in the metal wanes.
China’s exports of aluminium fabricated products rose 9.9 percent year-on-year to 350,000 tonnes in July, according to final trade data published by the country’s General Administration of Customs.
China’s import of unwrought copper and copper alloy rose 4.1 percent year-on-year but was down 18.4 percent month-on-month to 310,000 tonnes in July, according to final trade data released by the country’s General Administration of Customs.