WEEK IN BRIEF: Aluminium premiums in Japan, nickel ore prices and big trader moves

Metal Bulletin editor Alex Harrison looks back on the key moves in metal markets over the past week.

Metal Bulletin editor Alex Harrison looks back on the key moves in metal markets over the past week.

Key market news
Aluminium premiums have been offered into Japan at $400 per tonne on a cif MJP basis by UC Rusal for the second quarter, up over a half on prices for the current quarter – even as premiums in the US midwest, which have risen further and faster than other markets this year, came off a little

(BHP Billiton also achieved much better terms for its lead concentrates as a result of smelter restarts, incidentally.)

A high-ranking executive at a large participant in the nickel market – China’s Tsingshan Group, which is close to what goes on in Indonesia – told Metal Bulletin’s Asia editor Martin Ritchie he was surprised that refined nickel prices have not responded more strongly to the Indonesian export ban, and noted that he believed some nickel pig iron producers in China had traded as though no ban would ever come into force.

Nickel ore prices rose by over 35% over the course of February, he noted, on nickel pig iron smelters in China scrambling for material to maintain their businesses.

(Metal Bulletin alumina and aluminium specialists Jethro Wookey and Andrea Hotter were in Miami, where the alumina market was trying to figure out whether, and when, the export ban on bauxite from Indonesia would affect the market. Meanwhile Freeport said it might have to declare force majeure on deliveries of concentrates from its Indonesian unit.)

Not so dramatic, but copper premiums in Shanghai moved down as a result of the backwardation and high stocks in bonded warehouses in China, as our office in Shanghai reported.

Outright copper prices on the LME came under pressure too, dropping by over 1% on February 24, for example, on reports of tighter lending in China, and rumours of a default there by a company that used copper to collateralise loans.

Metal Bulletin’s Mark Burton was watching nearby spreads in zinc closely, and described over two days how a nearby spread moved into a contango from a backwardation.

Why? The tightness arose as a result of traders buying up large quantities of warrants in anticipation of higher prices in a deficit market. The spreads eased when they sold those in locations they did not want shortly afterwards.

Company news
Two companies that Metal Bulletin follows closely saw big bumps in their share prices: Kazakhstan-based copper producer Kazakhmys, which plans to sell its underperforming mines; and minor metals supplier 5N Plus, which benefited from strong bismuth sales in particular and better markets in general. Its shares jumped too.

The bismuth market powered upwards on strong investor interest on the Fanya Exchange on Wednesday February 24.

No surprise then that traders, producers and consumers were interested in news that Fanya plans to add an antimony contract to its products, in addition to selenium and tellurium.

Read also: Metal Bulletin’s spotlight on Fanya.

Court report
Aluminium producers, consumers and traders, exchange (and ex-exchange) executives were focused on the court case between UC Rusal and the London Metal Exchange.

Metal Bulletin’s Claire Hack was there on Wednesday and Thursday. UC Rusal argued that the new load-out rules for LME warehouses, which are due to come into force on April 1, were a publicity stunt by Charles Li, ceo of the LME’s owner at Hong Kong Exchanges & Clearing, and requested they be stopped and consulted on once more.

The LME described Rusal’s argument as absurd, and said its actions were well within its rights. The judge said he plans to reach a decision within a week.

The LME faces separate class-action lawsuits in the USA.

Trader moves
Tristan Busch, who formerly ran Trafigura’s aluminium book before taking on larger responsibilities as head of refined metals, has left the firm. He will be replaced by Barry Marshall

And cobalt trading firm Darton Commodities took on Wayde Yeoman, who had been working for Freeport McMoRan. 

Alex Harrison
Twitter: @alexharrison_mb

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