WEEK IN BRIEF: Ferro-alloys market gathers as nickel slump continues; Samancor; Zambian royalties; cobalt shutdown

Metal Bulletin deputy editor Fleur Ritzema takes a look back at some of the big news stories from the past few days.

Metal Bulletin deputy editor Fleur Ritzema takes a look back at some of the big news stories from the past few days.

Metal Bulletin’s 16th Asian Ferro-alloys Conference took place this week, and the news was coming in thick and fast.

Janie Davies revealed that stainless steel stockists have been cancelling orders with European steel mills as market participants feared a nickel price drop to $11,000 per tonne.

There was this update on nickel plants that are under construction in Indonesia.

And delegates said that manganese ore prices may still have some way to fall on weak demand from China’s steel industry and huge manganese ore supply.

Meanwhile, cash flow constraints were growing for Chinese manganese alloys smelters caught between manganese ore suppliers and steel mill customers, as they wait longer for their payment while paying upfront for raw materials.

And in ferro-chrome, market sources predicted that a supply gap created by the shutdown of Samancor’s medium carbon ferro-chrome capacity will be filled by Afarak’s Mogale Alloys.

A panel of industry professionals analysed the latest ferro-chrome benchmark price settlement – and the significance of the pricing system itself. More from the discussion here.

And Robert Yildirim, ceo of the Yildirim Group, had this to say about the effect the European anti-dumping duties on Chinese and Taiwanese stainless steel imports will have on the markets.

And away from the conference, nickel prices remained deflated. Prices had recovered slightly  by Thursday, having dropped below $12,500 earlier in the week, but they were still struggling to hold above $13,000 per tonne at the time of writing.

But producer Norilsk said it was bullish on the alloying metal as the Indonesian government has said it is committed to keeping its ore export ban in place.

The Russian miner, meanwhile, posted a near-tripling of net profits in 2014, thanks to favourable exchange rates and lower costs.

Here, Metal Bulletin’s Claire Hack considers whether Mick Davis should be feeling the pressure to start building a portfolio of assets, or whether waiting and watching may just work.

The Metal Bulletin Copper Concentrates Index tracking treatment and refining charges for copper concentrates was, meanwhile, steady, as trade sales to smelters picked up and mine tenders slowed down. More here.

And, having endured a bruising combination of sharply higher mining royalties and lower copper prices since January, copper miners in Zambia were given cause for optimism towards the end of March, as president Edgar Lungu vowed to ease the tax burden on miners by April 8.

The International Monetary Fund warned recently that there is an urgent need to ease the tax burden on miners in order to avoid running up a major structural balance-of-payments deficit.

Cobalt’s losing streak continued, meanwhile, although an imminent three-month shutdown at Chambishi brought talk of a floor and potential price rises in weeks to come.

Also this week in cobalt, Metal Bulletin revealed that the London Metal Exchange plans to list cobalt powder under its contract.

Umicore’s results were out. Earnings before interest and tax fell 10% year-on-year in 2014, on the back of lower metal prices and currency headwinds.

As the market digests the outcome of Impala Shanghai vs Wanxiang case – Impala Shanghai was granted the anti-suit injunction preventing Wanxiang from suing it in China – Claire Hack took a look at the sums of money involved.

In this letter to Metal Bulletin, Traderight md Steven Spencer considers these costs.

And, days before the deadline for the rollout of the goods and services tax (GST) in Malaysia, the London Metal Exchange said its warranted stocks and other metals are not liable for GST, and has dropped its proposal to suspend warrants from July 1.

And finally, Easter holidays will affect Metal Bulletin’s pricing and news coverage over the next few days. Click here to find out how it will affect the daily PDF and our prices.

Fleur Ritzema
Twitter: FleurRitzema_MB

What to read next
Fastmarkets has corrected the pricing rationale for MB-AL-0302 aluminium 6063 extrusion billet premium, ddp North Germany (Ruhr region), $/tonne, which was published incorrectly on Friday April 19. No prices were corrected.
The low-carbon aluminium differential in the US made its first move on Friday April 5 since Fastmarkets launched it five months ago.
Brazil's aluminium industry is further enhancing its sustainability by boosting renewable energy use and recycling, while mitigating risk from high-carbon imports
German copper producer Aurubis is among the least likely to consider reducing capacity despite record low treatment charges (TCs), according to its chief executive officer
European copper demand, particularly for wire rod, remains strong and seems to be outpacing broader macro-economic growth in the region, the chief executive officer of German producer Aurubis has said.
The process to place the smaller and less efficient of the two processing plants at Los Bronces on care and maintenance is expected to be completed by mid-2024 and comes as the company pushes value over volume, the chief executive officer of Anglo American Chile said