WEEK IN BRIEF: Fed raises interest rates; nickel stocks; Trafigura results; TC/RCs fall; ores and alloys cuts

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.

The US Federal Reserve raised interest rates by 0.25% this week, the first increase in nearly a decade. The announcement prompted base metal prices to lose ground on the London Metal Exchange, with a stronger dollar expected to prove bearish for the metals.

We were also watching the delivery of large volumes of nickel briquettes into an LME-listed warehouse in Taiwan – nearly 15,000 tonnes on Tuesday, followed by another 15,000 tonnes on Wednesday. The deliveries were expected to be ex-Johor material, moved on the basis of warehouse incentives and rental deals.

The alloying metal suffered the most in 2015, according to Saad Rahim, Trafigura’s chief economist and head of analysis, citing rising inventories on the back of weak demand.

Click here for Friday’s rolling price report, covering activity on the LME and Shanghai Futures Exchange.

Trafigura published its financial results for the 12 months ended September 30, posting a net profit of $1.1 billion on a “solid trading performance” and “continued progress in delivering operational efficiency”.

Gross profit from the trader’s metals and minerals trading business rose to $920.1 million, up from $914.5 million a year earlier. Claire Hack had the details.

The European Commission also approved Trafigura’s acquisition of a 20.02% stake in Nyrstar, giving the Switzerland-based trader de facto sole control of the zinc producer.

In the copper market, Jiangxi Copper and Chilean copper miner Antofagasta agreed on 2016 treatment and refining charges of $97.35 per tonne and 9.735 cents per lb following prolonged negotiations.

Meanwhile Metal Bulletin’s Copper Concentrates Index dropped below $100 per dry metric tonne/10 cents per lb for the first time in three months on December 15, as smelters and traders looked to cover requirements for material shipping in the first quarter. Read Kiki Kang and Mark Burton’s report on the move, here.

And major Chinese copper smelters are expected to meet in Shanghai tomorrow to discuss commercial stockpiling of the red metal.

A meeting of aluminium smelters in the Chinese city of Kunming last week looked at how to save the industry, discussing plans for supply side reform, production cuts and stockpiling.

Staying with aluminium, producers are citing falling Japanese port stocks, and improving European and US spot premiums to negotiate higher premiums in the first quarter of the New Year.

New production cuts announcements were coming in thick and fast as prices continue to fall in the ores and alloys markets.

Glencore has cut silico-manganese production by 50% at its plant in Norway, while United Manganese of Kalahari has extended its January production curtailments.

Yildirim Group will suspend 250,000 tonnes of chrome ore production in Turkey from January, on account of low prices. Janie Davies had the story.

And South African manganese ore producer Tshipi é Ntle will slash its exports by 30% in 2016 in response to “challenging market conditions”. Click here for the details.

Track the ores and alloys cuts with our cuts counter, here.

In people news, Parham Ghazi Saeedi has left his role as commercial director at Fesil Sales Group.

And recent upticks in the noble alloys market may not continue into the year-end, and in the absence of demand, could turn back to the downside in 2016. Claire Hack spoke to market participants.

Charlotte Radford
Twitter: @CRadford_MB

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