ASIAN MORNING BRIEF 17/05: Base metals prices end mostly down on LME; UC Rusal still struggling to export aluminium; zinc price has support to remain above $3,000 per tonne in ’18, exec says

The latest news and price moves to start the Asian day on Thursday May 17.

Base metals prices on the London Metal Exchange remained on split paths at the close of trading on Wednesday May 16, with low volumes traded and broad consolidation in effect across the complex amid a surging dollar. Read more in our live futures report.

Here are how prices looked at the close of trading:

UC Rusal continues to struggle to export any of its aluminium production from Russia despite an easing in sanctions implemented by the United States, sources said on May 16.

Lower than expected mined zinc output and smelter maintenance in China will support zinc prices above $3,000 per tonne this year, He Qiang, general manager of zinc smelter Dong Ling Group International Trade, said at a side event of LME Week Asia.

Aluminium inventories are set to drop during the second quarter of this year, with prices expected to increase to $2,500 per tonne, Tracy Liao, strategist for industrial commodities at Citi Research, also said at LME Week Asia. 

The increased acceptance by humans that they cannot fight the rise of technology and algorithmic trading has brought numerous changes to the type of trades taking place on the LME, according to Guy Wolf, head of market analytics at Marex Spectron.

Spot market copper concentrate treatment and refining charges rose to 3.5-month highs in mid-May, with the market becoming progressively bearish due to a continued outage at Sterlite Copper’s Tuticorin smelter in India.

Noble Group’s metals, minerals and ores business posted operating income of $11 million in the January-March quarter, reversing a $32-million operating loss in the same period last year amid higher prices, the company said on May 15.

Primary aluminium stocks at the three main Japanese ports of Yokohama, Nagoya and Osaka rose 8.9% month on month in April, according to Marubeni Corp data released on Wednesday.

In ferrous news, buying activity in the Iranian export billet market was lively during the week ended May 16, with customers rushing to place orders for July-shipment material, especially those in the Gulf Co-operation Council (GCC) countries.

Meanwhile, GCC countries are finding common ground over the threat from steel being redirected as a result of the US decision to impose tariffs on imports.

Tata Steel, “continues to be bullish on steel prices and spreads with the improving demand situation in India,” chief executive officer and managing director TV Narendran said on Wednesday.

What to read next
Fastmarkets launches MB-CU-0513 copper cathode equivalent grade (EQ), cif Southeast Asia, $/tonne on Tuesday February 20.
Fastmarkets’ 2024 outlook for key raw materials and ingredients used in the production and distribution of fast-moving consumer goods
Weak demand continues to stem profitability and prevent capacity return in the European aluminium market, Norsk Hydro’s chief executives told Fastmarkets in an exclusive interview on Wednesday February 14.
The publication of Fastmarkets’ rand fixing prices for LME trade for Monday February 12 were delayed due to a technical issue.
The copper concentrate market was already tight, but the addition of major new smelting capacity this year – starting with the expansion of Freeport’s Gresik smelter in Indonesia — will likely mean maintenance breaks, capacity curtailments and potentially even closures while operating costs start to become untenable, Fastmarkets understands.
Major aluminium producers Alcoa, Rio Tinto and Century Aluminum have been accused of pocketing vast sums of money from the sale of aluminium products to the beverage industry in the US at inflated prices – and of potentially colluding to do so