Charlotte Radford reviews some of the key news and price moves reported by Metal Bulletin this week.
Metal Bulletin reporters continued to cover the fallout from the Fanya Metal Exchange’s decision to halt trading of bismuth, indium and germanium, and the exchange’s liquidity issues.
On Monday, more than 400 Fanya investors gathered at the government building in Kunming, where the exchange is based, to ask for help.
Commentary arrived from minor metals trader Anthony Lippman, who looked at what we can learn from the Fanya crisis, while other traders focused on the possible losses facing investors.
And come Thursday, it emerged that the exchange may have located an investor in the form of global manufacturing company Amer International.
To view all of Metal Bulletin’s articles on Fanya, click here.
Meanwhile, on the London Metal Exchange (LME), copper and aluminium prices were under pressure once again, both setting news lows not seen since 2009. Find our latest rolling price report, covering activity on the LME and Shanghai Futures Exchange, here.
The market became increasingly bearish in its outlook for the red metal. In particular, Goldman Sachs slashed its 12-month forecast for copper prices to $4,800 per tonne in anticipation of lower mining costs, higher output and a slowdown in Chinese demand growth.
Here, Copper Price Briefing editor Mark Burton asked whether producers would heed the investment banker’s call to hedge prices and forward production.
The global refined copper balance logged a deficit in April after four months of consecutive surpluses on strong demand from China, according to data from the International Copper Study Group.
Codelco’s contractors blocked access to several copper mines on Tuesday, protesting against the producer’s “unwillingness” to directly negotiate the terms of a labour agreement. The company said the increases demanded by the striking contractors are “not compatible” with current market conditions.
Production was also halted at Evraz Highveld Steel & Vanadium’s steelworks in South Africa, as a result of “working capital constraints and reduced domestic demand in steel”. In Tapped In, Claire Hack looked at the likely impact of the decision on ferro-vanadium prices.
Also on the blog this week, we looked at the impact of Russian material on the European ferro-titanium market, where prices are low and spot business thin on the ground.
Silico-manganese prices fell to a six-year low on a delivered basis in Europe on Friday, as producers slashed offers in a bid to win consumer tenders.
Staying with the alloys, on Thursday market sources told Metal Bulletin that China’s State Reserve Bureau (SRB) had bought 7,000 tonnes of molybdic oxide from major market participants. Rumours surrounding the purchase had caused ferro-molybdenum and molybdic oxide prices to rise slightly in Europe earlier in the week.
Talk also circulated of the SRB is purchasing between 20,000-50,000 tonnes of nickel plate. But the bureau is adopting a different approach to stockpiling. More here.
Aluminium producers in India are lobbying the government to double the import duty on aluminium metal as they compete with the growing influx of material from China. Deepali Sharma had the story.
In company news, Norsk Hydro’s underlying earnings more than doubled year-on-year in the second quarter, but low aluminium prices and premiums in the period meant earnings fell 13% on a quarterly basis.
Anglo American’s earnings before interest, taxes, depreciation and amortisation fell 24% in the first half of the year. The company is now targeting cost savings, and plans to cut 6,000 roles at the company.
Quarterly results also arrived from BHP Billiton this week. The company expects a 12% fall in copper production in the 2016 financial year, and will take a multi-billion-dollar writedown related to its South32 demerger. Here’s a summary of the miner’s production figures.
The recently-formed South32 released its first quarterly report since being spun out from BHP. The new company flagged writedowns worth $1.9 billion against its manganese and coal assets.
And finally, second quarter MB APEX results have arrived. Find out who took the top spot from INTL FCStone’s Ed Meir for base metal price predictions here. And the results for precious metals are here.
Charlotte Radford
charlotte.radford@metalbulletin.com
Twitter: @CRadford_MB
