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Consider some key market snapshots 100 years after Metal Bulletin began publishing news and information.
Nickel stocks on the London Metal Exchange are at all-time highs of about 180,000 tonnes, which speaks volumes about poor demand from the stainless steel sector.
Copper is in a surplus for the first time in years.
Ferro-alloy assets have been sold – in the case of Vale’s manganese alloys assets in Europe, or are up for sale – in the case of Mechel’s ferro-alloys plant in Bratsk.
Major mining companies are seeking to divest peripheral businesses to focus on the businesses that really matter to them. As Metal Bulletin reported, Citigroup has been appointed to examine a sale of BHP Billiton’s Temco manganese alloys smelter in Australia, for example, while Rio Tinto has created a separate division, Pacific Aluminium, to divest its non-core aluminium assets.
New regulation threatens to reshape how LME brokers do business for their clients, by extinguishing their capacity to offer free credit, thus making hedging by industrial clients more expensive.
It is not the best of times, then, for the markets that Metal Bulletin has been covering since May 8 1913.
But nor, as former Metal Bulletin chairman Trevor Tarring’s continuing survey of the history of Metal Bulletin and the markets makes clear, is it the worst.
Markets are, after all, cyclical.
So it is likely that every divestment that takes place now will be followed at some point in the future by an acquisition or a consolidation.
And if copper prices fall to $5,950 per tonne as some Deutsche Bank modelling suggested last week, it will put further pressure on projected mine supply.
Société Générale analyst Robin Bhar points out in this issue that “today’s famine in copper prices is tomorrow’s feast”.
But if markets move in waves, it is hard to see how far the tide will rise on other issues that define the way in which they operate.
One manifestation of this is in the regulation of financial markets.
The Emir regulations, as Metal Bulletin discussed earlier this year and London Metal Exchange ceo Martin Abbott has mentioned, threaten to eliminate the cheap or free credit that has always been a feature of life for brokers on the LME.
Still, the move to bring OTC deals into clearing also offer opportunities to brokers. Discussions over the fair apportioning of proceeds from mining and smelting between companies and countries are also likely to continue over the years ahead, and change in this area is likely to continue.
Metal Bulletin is following very closely the attempts to implement an export ban on cobalt concentrates from the Democratic Republic of Congo, which result from the country’s latest attempts to ensure that more beneficiation takes place within its borders.
Not least, Metal Bulletin is looking at the effects on prices, which have been at the core of Metal Bulletin for 100 years.
Pricing too looks set to develop.
More transparency about prices upstream and downstream is a given in the years ahead, as is the process by which those prices are published and discovered.
Alex Harrison aharrison@metalbulletin.com Twitter: @alexharrison_mb