WEEK IN BRIEF: Copper at $4,600; aluminium premiums widen; nickel sub-$9,000; cobalt prices fall; Vanchem in business rescue

Metal Bulletin reviews some of the key news from the past five days in the metals markets.

Metal Bulletin reviews some of the key news from the past five days in the metals markets.

Codelco was offering copper cathode at a premium of $98 per tonne to Chinese buyers for the coming year, down $35 on the benchmark offer for 2015. Kiki Kang had the details.

The Chilean copper miner believes cutting costs rather than reducing production is the most effective way to cope with the collapse in copper prices, its president and ceo said at the Asia Copper Conference.

Meanwhile, copper prices fell to $4,600 this week – levels last seen in 2009. But the red metal will continue to be weighed down by market participants’ refusal to cut production, INTL FCStone’s Ed Meir told delegates at the conference this week.

Higher copper output, slowing demand growth, increased short positioning and the collapse in oil prices are all weighing on the red metal, Freeport McMoRan’s Javier Targhetta said at the event in Shanghai.

Treatment and refining charges (TC/RCs) for spot copper concentrates stabilised in the first half of November, as trade destocking eased and miners and smelters focused on contractual talks. Latest figures are here.

Negotiations for 2016 contracts will be long and exhaustive, according to Ivan Szpakowski, commodities strategist at Citigroup.

Click here for all our coverage from the conference in Shanghai.

Jethro Wookey was at Metal Bulletin’s 23rd Recycled Aluminium Conference in Madrid, where Norsk Hydro’s Roland Scharf-Bergmann told delegates secondary aluminium is indistinguishable from primary metal.

Ranges widened on duty unpaid aluminium premiums in Europe, as market participants reported continuing focus on long-term contracts.

Russian and Chinese government officials have warned of the need for further domestic aluminium production cuts in order to balance the market and reduce unnecessary energy consumption, according to a document seen by Metal Bulletin.

Here, Fleur Ritzema and Ellie Wang looked at the Shanghai Futures Exchange’s (SHFE) nickel contract, which has prompted an increase in liquidity and volumes on the London Metal Exchange (LME) as a result of arbitrage between the two markets, according to traders.

And an increase in SHFE open interest since late October indicates potential for still weaker metals prices, according to analysts at Goldman Sachs.

In the absence of supply cuts, nickel hit lows not seen since 2003 on the London Metal Exchange this week.

“I expect to see $8,000 per tonne before we see $10,000 again,” an analyst told Metal Bulletin.

And after a week of price falls and new multi-year lows, the LME’s zinc contract was up 5.85% in Friday’s official session on talks of production cuts among major Chinese smelters.

Click here for today’s commentary and analysis in our rolling price report.

Banks financing zinc metal or accepting it as collateral, as well as those buying it, are beginning to scrutinise the material more closely, according to traders.

As a result, it is possible a two-tier market is emerging. James Heywood had the story.

In people moves, Chris Eger, previously M&A director at Trafigura, is replacing Heinz Eigner as cfo of zinc producer Nyrstar, effective immediately.

Trevor Spanner is to replace Henry Ingrouille as chief operating officer of Hong Kong Exchanges & Clearing (HKEx), as the bourse prepares to launch four new divisions. Full details on the changes are here.

In the minor metals market, the Kunming municipal government appointed Da Hua Certified Public Accountants to audit the Fanya minor metals exchange’s trading data and financial data.

China’s State Reserve Bureau bought 100 tonnes of indium for its reserves, providing a boost to local spot prices.

Meanwhile in Europe, antimony prices dropped another $200 per tonne midweek, as Chinese producers looked to turn metal into money.

Cobalt prices fell to fresh multi-year lows this weeks, as sellers slashed their offers to secure good-tonnage business. Fleur Ritzema had the details.

Moving to the ferro-alloys, the fall in ferro-vanadium prices in Europe may have been perpetuated by bearish trader activity, but it is unlikely the market will see any improvement unless sentiment turns around, according to a supplier.

News came from Vanchem Vanadium Products, which has gone into business rescue.

And staying in South Africa, South32’s Samancor Manganese mines will remain closed until a review of their operations has been completed.

South32, spun out from BHP Billiton earlier this year, held its AGM this week. The company’s chairman, David Crawford, attributed the reduction in its market capitalisation to the mining industry’s “great shakeout”. Janie Davies had the story.

Charlotte Radford
Twitter: @CRadford_MB

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