WEEK IN BRIEF: Fanya uncertainty; oversupply woes; Codelco strike; SRB Revealed; Turkey aluminium duties
Charlotte Radford takes a look at just some of the news stories and price moves covered by Metal Bulletin reporters over the past five days.
Charlotte Radford takes a look at just some of the news stories and price moves covered by Metal Bulletin reporters over the past five days.
In Kunming, China, the fallout continued from the Fanya Metal Exchange’s July announcement that it was suspending applications to sell indium, bismuth and germanium.
On Tuesday, about 70 Fanya investors claimed metals from the exchange’s warehouses, as they attempted to recover their investments. The following day, the exchange suspended daily payments to investors who had transferred their holdings to Fanrong, and investors declared they would occupy the warehouse overnight. As of Thursday, investors had not been allowed to remove any metal from the warehouse.
Here, Lord Copper considers the drivers behind activity on the minor metals exchange, and whether investors should be shocked at the current fraught situation.
In other exchange news, Alcoa has written to the Commodities Futures Trading Commission (CFTC) claiming the regulator overstepped the mark in attempting to influence London Metal Exchange (LME) warehousing reforms.
The letter provides a strong message to the CFTC: back off the LME, unless you do it appropriately and openly.
This week on the LME, tin saw some tightening in its backwardation and prices lost 5.12% in Wednesday’s official session. Tin prices rallied to a peak of $16,280 per tonne in July, and this week’s falls were linked to fund selling and stocks and warrants manoeuvres.
Despite consecutive relaxations in monetary policy, Chinese metal companies have been suffering from tight liquidity this year, and a recent equity rout may only worsen the situation in the coming months.
Weak prices persisted on the exchange for much of the week, as market participants called for supply cuts in order for prices to find some strength. Freeport McMoRan has announced a review of its copper operations for the third quarter, and could cut high-cost copper production. The move should provide some support to the copper market, equity analysts at Jefferies said on Wednesday.
Catch up with our latest rolling price report for the LME and SHFE here.
Low copper prices are causing problems for miners all over the globe, but for producers in Zambia, the latest drops are just one concern among many.
News on the supply side went some way to support exchange prices. Codelco suspended operations at its Ministro Hales mine following an “illegal seizure” of the plant by contract workers. The mine later suffered “significant damage” from “acts of sabotage.” Danielle Assalve had the details.
Mine disruptions have brought copper’s supply-demand fundamentals closer to balance this year, but weak demand will continue to stifle prices in the near term, with consumers advised to buy now, according to industry analysts.
Brazilian copper producer Paranapanema’s earnings fell 94% year-on-year in the second quarter of 2015, hit by weak economic climate and devaluation of local currency.
And this week, Metal Bulletin’s “SRB Revealed” series continued to shed light on China’s State Reserve Bureau and its presence in the copper market.
Here, our reporters examined how much copper the SRB may have purchased, and here, we looked at the agency’s structure and supply partners.
To review the whole series, download the full report here.
South Korea’s state stockpiling agency will buy 1,000 tonnes of aluminium at a premium of $108.4 per tonne, down sharply from the $145 per tonne it paid in an earlier tender.
Aluminium premiums in Asia stabilised this week, and rose in some instances with the contango lending support. Premiums have fallen continuously in recent months.
And Turkey has imposed aluminium import duties on itself in line with the EU’s aluminium duties, European traders told Metal Bulletin. Jethro Wookey had the details.
In the ores and alloys news, the global manganese ore market grew to almost 597,000 tonnes in April as supply accumulated, despite low prices and falling demand.
In company news, Jiangxi Tungsten Industry Group plans to use one billion yuan ($161.06 million) to build its tungsten concentrate reserves.
Largo Resources produced 607 tonnes of vanadium pentoxide at its flagship Maracas Menchen operations in July, outstripping its previous record, set in May.
And final binding offers for the purchase of Evraz Highveld Steel and Vanadium must be received by August 21, the company said in a report on its business rescue proceedings on Wednesday August 5.
Rio Tinto booked net profits of $806 million in the first half of 2015, down 82% year-on-year, as low copper prices, currency losses on dollar-priced debt and asset impairments weighed on profitability. Find the details here.
Noble Group brought forward its second quarter results announcement to Monday August 10. Metal Bulletin will report on the figures next week.
And in people moves, ICBC Standard Bank appointed Tom Kendall as head of precious metals strategy, and John Xi as head of bulk commodities and energy.
Charlotte Radford
charlotte.radford@metalbulletin.com
Twitter: @CRadford_MB
In Kunming, China, the fallout continued from the Fanya Metal Exchange’s July announcement that it was suspending applications to sell indium, bismuth and germanium.
On Tuesday, about 70 Fanya investors claimed metals from the exchange’s warehouses, as they attempted to recover their investments. The following day, the exchange suspended daily payments to investors who had transferred their holdings to Fanrong, and investors declared they would occupy the warehouse overnight. As of Thursday, investors had not been allowed to remove any metal from the warehouse.
Here, Lord Copper considers the drivers behind activity on the minor metals exchange, and whether investors should be shocked at the current fraught situation.
In other exchange news, Alcoa has written to the Commodities Futures Trading Commission (CFTC) claiming the regulator overstepped the mark in attempting to influence London Metal Exchange (LME) warehousing reforms.
The letter provides a strong message to the CFTC: back off the LME, unless you do it appropriately and openly.
This week on the LME, tin saw some tightening in its backwardation and prices lost 5.12% in Wednesday’s official session. Tin prices rallied to a peak of $16,280 per tonne in July, and this week’s falls were linked to fund selling and stocks and warrants manoeuvres.
Despite consecutive relaxations in monetary policy, Chinese metal companies have been suffering from tight liquidity this year, and a recent equity rout may only worsen the situation in the coming months.
Weak prices persisted on the exchange for much of the week, as market participants called for supply cuts in order for prices to find some strength. Freeport McMoRan has announced a review of its copper operations for the third quarter, and could cut high-cost copper production. The move should provide some support to the copper market, equity analysts at Jefferies said on Wednesday.
Catch up with our latest rolling price report for the LME and SHFE here.
Low copper prices are causing problems for miners all over the globe, but for producers in Zambia, the latest drops are just one concern among many.
News on the supply side went some way to support exchange prices. Codelco suspended operations at its Ministro Hales mine following an “illegal seizure” of the plant by contract workers. The mine later suffered “significant damage” from “acts of sabotage.” Danielle Assalve had the details.
Mine disruptions have brought copper’s supply-demand fundamentals closer to balance this year, but weak demand will continue to stifle prices in the near term, with consumers advised to buy now, according to industry analysts.
Brazilian copper producer Paranapanema’s earnings fell 94% year-on-year in the second quarter of 2015, hit by weak economic climate and devaluation of local currency.
And this week, Metal Bulletin’s “SRB Revealed” series continued to shed light on China’s State Reserve Bureau and its presence in the copper market.
Here, our reporters examined how much copper the SRB may have purchased, and here, we looked at the agency’s structure and supply partners.
To review the whole series, download the full report here.
South Korea’s state stockpiling agency will buy 1,000 tonnes of aluminium at a premium of $108.4 per tonne, down sharply from the $145 per tonne it paid in an earlier tender.
Aluminium premiums in Asia stabilised this week, and rose in some instances with the contango lending support. Premiums have fallen continuously in recent months.
And Turkey has imposed aluminium import duties on itself in line with the EU’s aluminium duties, European traders told Metal Bulletin. Jethro Wookey had the details.
In the ores and alloys news, the global manganese ore market grew to almost 597,000 tonnes in April as supply accumulated, despite low prices and falling demand.
In company news, Jiangxi Tungsten Industry Group plans to use one billion yuan ($161.06 million) to build its tungsten concentrate reserves.
Largo Resources produced 607 tonnes of vanadium pentoxide at its flagship Maracas Menchen operations in July, outstripping its previous record, set in May.
And final binding offers for the purchase of Evraz Highveld Steel and Vanadium must be received by August 21, the company said in a report on its business rescue proceedings on Wednesday August 5.
Rio Tinto booked net profits of $806 million in the first half of 2015, down 82% year-on-year, as low copper prices, currency losses on dollar-priced debt and asset impairments weighed on profitability. Find the details here.
Noble Group brought forward its second quarter results announcement to Monday August 10. Metal Bulletin will report on the figures next week.
And in people moves, ICBC Standard Bank appointed Tom Kendall as head of precious metals strategy, and John Xi as head of bulk commodities and energy.
Charlotte Radford
charlotte.radford@metalbulletin.com
Twitter: @CRadford_MB