WEEK IN BRIEF: Galena Metals Fund closure; SHFE short-selling in spotlight; Cu TC/RCs fall; Al premiums narrow; cobalt hits seven-year low

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.

News from Trafigura got the week of to a start, as the trading company’s fund management subsidiary announced it is winding down its Galena Metals Fund due to difficult market conditions.

And it has been a tumultuous few weeks for BTG Pactual. Its ceo was arrested in Rio de Janeiro last week, and an ongoing corruption probe involving Brazil’s state-owned oil company, Petrobras, has extended its tentacles. Here, Andrea Hotter looked at the challenges facing the company.

Meanwhile Concord Resources has hired former Noble traders Kareem Barbir, Kazumitsu Futatsuka and Paul Wilkes to develop the company’s presence in concentrates, refined metals and futures markets.

The Shanghai Futures Exchange will remove an abnormal trading exemption clause on hedging from Wednesday December 16. Linda Lin had the details.

The change to the bourse’s trading rules is being seen as a response to the concerns expressed by Chinese producers over the actions of traders, whom the producers claim have pushed prices down.

Sentiment continued to drag on exchange prices for much of this week, as the chair of the US Federal Reserve, Janet Yellen, hinted strongly at raising interest rates later in the month. But the base metals complex bounced back on the London Metal Exchange in today’s official session, on a weaker dollar and signs of tightening in China’s physical markets.

China’s ten largest copper producers agreed to cut 2016 production by 350,000 tonnes on Tuesday.

And Konkola Copper Mines will mothball its unprofitable underground operations at the Nchanga mine in Zambia. The asset turned cash-flow negative following the steep fall in copper prices.

Codelco’s profits fell by almost 50% in the first nine months of 2015, heavily affected by weaker prices.

And Metal Bulletin’s copper concentrates index fell nearly 3% in the second half of November, as traders bid competitively on a tender for Escondida concentrates and the looseness in the trader-to-smelter market eased after a spate of year-end sales.

Production cut announcements also came in the nickel market. Three nickel smelters in China will cut 5,000 tonnes of output in December between them. Ellie Wang had the details.

Jiangsu Baotong Nickel Industry Co will reduce nickel production by 30% in December, and will undertake maintenance during the whole of January 2016, according to a company statement on Wednesday December 2.

And Vale is considering options at its New Caledonia nickel operations – the highest-cost nickel operation in the miner’s metals portfolio. Andrea Hotter had the story.

In the aluminium market, the China Nonferrous Metals Industry Assn has asked the Chinese government to initiate measures to support the country’s aluminium producers.

Staying in Asia, a major aluminium smelter has offered Japanese traders and end-users a premium of $120 per tonne for the first quarter of 2016, according to sources.

In the ores and alloys markets, Transalloys plans to cut its 2016 silico-manganese output by as much as 80% due to “unfavourable market conditions”.

And Yildirim Group has declared force majeure at its Russian ferro-chrome producer, the Tikhvin Ferro-alloy Plant, as the result of a fire on November 26, removing 30,000 tonnes of ferro-chrome output from the market.

In the minor metals market, cobalt prices hit seven-year lows this week, driven down by excess spot availability in Europe and the USA.

Selenium prices have fallen below $7 per lb, as poor demand forces some sellers to compete at low levels in order to secure business.

And Glencore has applied for membership of the Minor Metals Trade Assn. The company hopes to join as a producer, marketer and trader of cobalt and molybdenum.

Charlotte Radford
Twitter: @CRadford_MB

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