Metal Bulletin’s Charlotte Radford reviews key news and price moves from the past seven days.
Base metal price plunges meant all eyes were on the London Metal Exchange this week, as copper traded at six-year lows on Tuesday and nickel prices took a dive to intraday lows of $10,430 per tonne on Wednesday. Large volumes changed hands and risk appetite was low, and the freefall was linked to a massive selloff in China’s equity markets, diverting the market’s gaze from Greece’s position in the Eurozone.
By Thursday, rebounds in Chinese stock prices and a wave of short covering provided some relief to the country’s metals industry, though most remained wary on concerns over China’s economic outlook.
Chinese hedge fund Chaos Investment denied rumours that its founder Ge Weidong was in trouble as a result of the volatilities in China’s equity markets, asking participants to retain confidence in the country’s economy.
Metal Bulletin reporters went on to cover reactions to the Chinese share scare across the metal markets.
Fleur Ritzema spoke to market sources who said we could see cuts to nickel production if the alloying metal sustained its mid-week price levels.
And the week’s nickel price losses have heightened the grim outlook for ferro-alloys demand and exacerbated negative pressure on stainless steel order books. Janie Davies and Claire Hack’s story is here.
In the physical markets, ferro-molybdenum prices continued their descent in Europe this week, tumbling to 12-year lows, prompting Claire Hack to ask “When is a summer lull not a summer lull?”, in this ores and alloys blog post.
By Thursday, copper prices had rebounded by as much as $500 from the six-year lows seen on Tuesday, after the Chinese government took further measures to catch freefalling domestic stocks. Mark Burton asked, where next for copper prices?
Meanwhile Chile’s copper commission, Cochilco, lowered its copper price forecast for 2015 once again, given a scenario of “increased international macroeconomic uncertainty.”
Even at the start of the week, aluminium prices on the Shanghai Futures Exchange were at six-year lows, due in part to economic factors, but also because of the collapse of Chalco’s efforts to support prices.
And UK aluminium scrap prices fell swiftly, with negative sentiment from China and oversupply leading the charge downwards. Jethro Wookey had the story.
Volatility on the exchanges also affected US aluminium scrap prices this week, prompting most buyers to keep prices steady or hold off buying until the market finds direction.
Miners’ and metal producers’ shares fell sharply this week following metal price volatility. Notably, Glencore and Freeport McMoRan shares lost out after the copper sell off on Tuesday, and aluminium producers UC Rusal and Chalco share prices tracked the metal’s LME price falls.
Find all our coverage of the Chinese share scare here.
And see where base metals prices stood on Friday with our latest rolling price report.
Elsewhere in the metals markets this week, the China Smelters Purchasing Team lowered its price floor for third-quarter copper concentrates by $10 per dmt and 10 cents per lb quarter-on-quarter. Find the story here.
In aluminium, production started at Rio Tinto’s Kitimat smelter in Canada. The newly-modernised facility is preparing its first shipment, and expects to increase its production capacity to 420,000 tonnes per year.
Staying in Canada, Trevali Mining Corp’s ramp-up of its Caribou zinc-lead-copper-precious metals project in the Bathurst Mining Camp is progressing on schedule, recently surpassing 50% of nameplate production capacity.
In other company news, commodities trader Noble Group, which has faced scrutiny recently on allegations about its accounting and finances, has commissioned a third party review of its mark-to-market models and valuations. Read on here.
And finally, we were sorry to report the passing of Colin Williams, founder of Wogen Resources, on June 30. We published a tribute to Colin here.
Charlotte Radford
charlotte.radford@metalbulletin.com