WEEK IN BRIEF: Glencore, Noble take share price hit; metal price weakness; Fanya update; yuan devaluation

Charlotte Radford takes a look back at just some of the metals market news stories covered by Metal Bulletin’s reporters over the past seven days.

Charlotte Radford takes a look back at just some of the metals market news stories covered by Metal Bulletin’s reporters over the past seven days.

Interim results came from Glencore this week. The company posted a 29% year-on-year drop in earnings to $4.6 billion for the first half of 2015. Shares in Glencore subsequently tumbled to a record low on the London Stock Exchange as the miner felt the effects of weak commodity prices.

Shares in Noble Group also took a hit, registering their lowest close since October 2008, after ceo Yusuf Alireza announced it was considering a range of “strategic options” in order to increase its facilities.

The Singapore-listed group also stepped up legal action against the company, Enlighten Ace, and the former employee it believes are behind Iceberg Research.

And with weak metal prices taking their toll on company earnings, miners are set to face some tough decisions over the coming weeks and months: to cut, shut or stick with their gut, Andrea Hotter wrote.

According to Barings’ head of global resources, the sector is poised for another round of mergers and acquisitions, driven by low prices and efforts to improve shareholder returns.

There seems to be a growing understanding that commodity prices are not simply pausing, Lord Copper wrote. “Where next for commodity prices?” Metal Bulletin’s columnist asked in his latest piece.

The Sierra Gorda copper-molybdenum project in Chile could report “large net losses” because of low metal prices, according to analysts at Citi Research.

And staying with copper, a fire at Codelco’s Chuquicamata mine was controlled on Tuesday and will not affect its output. Details are here.

This week on the London Metal Exchange, the red metal slipped below the psychological support level of $5,000 per tonne. The complex rallied on Thursday, with copper showing the best performance of the base metals, though the resignation of Greece’s prime minister and uncertainty in China’s equity markets has weighed on prices today.

Find the latest rolling price report, tracking the changes on the LME and Shanghai Futures Exchange, here.

The exchange will introduce market-making programmes for copper, aluminium and zinc later this year to enhance the liquidity of its new products and existing contracts.

Aluminium producers and consumers have become wary of the effects of volatile spreads on the LME’s aluminium forward curve, and are having to make their sales teams aware of potentially expensive requests from customers, Jethro Wookey wrote.

In other exchange news, the Yunnan branch of the China Banking Regulatory Commission has set up a panel to decide whether Fanya should be investigated for economic crime, sources told Metal Bulletin on Thursday. Find the latest on the minor metals exchange here.

Metal Bulletin reporters continued to cover the fallout from last week’s devaluation of the Chinese yuan. Here’s what the analysts had to say on the currency move, and here, Janie Davies looked at its effect on ferro-chrome and chrome ore bids and trades.

The devaluation will keep pressure on aluminium prices, which will be credit negative for producers, according to ratings agency Moody’s.

International Ferro Metals’ shares have also taken a hit recently. The South African ferro-chrome producer’s share price dropped 50% between August 12 and August 18.

Evraz Highveld Steel & Vanadium has confirmed it will cut its workforce from about 2,200 employees to about 1,100 employees.

Metal Bulletin also reported that business rescue practitioners for troubled vanadium producer Mapochs Mine, owned by Evraz Highveld, have not secured post-commencement finance.

In other company news, Kobus Keulder has resigned from his role as cfo of United Manganese Kalahari and will join rival South African manganese ore producer Tshipi.

And post-blast restrictions on the transport of manganese ore at Tianjin were partly removed earlier this week, following four days of strict controls at the port.

Americano Nickel Ltd, the new owner of the Falcondo ferro-nickel project in the Dominican Republic, said it aims to restart operations at the plant within months. Danielle Assalve had the story.

And finally, mining activity has been halted at Vale’s Onça nickel mine in Brazil’s northern state of Para, following a judicial decision taken on Friday August 14.

Charlotte Radford
Twitter: @CRadford_MB

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