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Metal Bulletin reviews some of the key news from the past five days in the metals markets.
Glencore reduced its 2016 debt target to $18-19 billion by the end of the year, compared with a previous target of the low $20 billions. The company’s share price jumped as much as 11% following the announcement on Thursday.
The miner-trader’s Minara and Koniambo nickel mines are both under review, with ceo Ivan Glasenberg saying it would take a “pragmatic” approach to its operations.
Lord Copper hosted his annual lunch in London this week, with a number of traders and brokers making their forecasts for nickel prices in 2016.
Moves by nickel producers in China to encourage the authorities to act against what they believe is “the wrong kind of short-selling” in the futures market brings back memories of the complaints made about speculators when prices were ramping upwards in the commodities boom.
Diversified miner Anglo American has, meanwhile, launched an “accelerated and more radical restructuring programme”, including suspending its dividend for the second half of 2015 and the whole year 2016.
But the company is going to wait until February to reveal the fate of the assets it plans to close, put on care and maintenance, or reprieve.
The possibility that things could turn around in the next couple of months means the company is holding back from pulling the trigger on some closures for now.
Freeport McMoRan, however, has increased cuts to its copper and molybdenum output, as market conditions in its key commodities remain weak and uncertain.
In the aluminium market, the weakness has arisen mainly due to strong production growth in China, according to Vivek Tulpule, head of economics and markets at Rio Tinto. Since 2008, China has increased its annual production of primary aluminium by close to 18 million tonnes, Tulpule said.
Indeed it was an interesting week for the aluminium market, with financing banks getting tougher and a major long-position holder giving back some of its position, Andrea Hotter wrote. More here.
And Metal Bulletin’s Mark Burton argued that although the London Metal Exchange’s new aluminium premium contracts remained untraded two weeks on from launch, the lack of interest in the contracts is a testament to the belated success of the LME’s warehouse reforms.
European aluminium premiums were stable and likely to remain that way into the first quarter of 2016, but there are mixed views as to their fate beyond that. Jethro Wookey had the details.
Erik Bay Gundersen has become head of aluminium trading at Mercuria Energy Trading in Geneva.
A total of 14 major local aluminium smelters have promised not to restart halted capacity and will continue to adopt a flexible approach to production, according to a statement from China Nonferrous Metals Industry Assn earlier today.
China Hongqiao Group announced an immediate cut in output of 250,000 tonnes, but the news left the markets “unimpressed”, according to INTL FCStone analyst Edward Meir, boosting aluminium prices only slightly on the London Metal Exchange.
Click here for today’s rolling price report.
Morgan Stanley will wind down and exit its LME trading business as part of a bank-wide reduction in staff. The departure is another reminder that even the titans of the commodities industry are not immune to the demands of their balance sheets, Andrea Hotter wrote.
And the closure of Trafigura’s Galena Metals Fund and the departure of Duncan Letchford, who ran it, has highlighted the reorganisation of the metals business within the trading company, which has being going on since October. Alex Harrison looked at the new structure of the metals trading desk.
Zinc miner MMG’s full-year financial results will be significantly affected by a planned $640-800 million impairment against the fair value of some of its mining assets, the company has warned.
Belgian producer Nyrstar has placed its three Middle Tennessee zinc mines on care and maintenance as it strives to improve its balance sheet. James Heywood had the story.
Eramet is considering changing its product mix by making more ferro-nickel at its New Caledonia operations and less matte, which is shipped to France for transformation into cathode at the Sandouville plant.
Troubled South African company Evraz Highveld Steel & Vanadium has signed an agreement with its unions and the country’s Department of Labour to minimise the impact of its retrenchments on staff
The European charge and high carbon ferro-chrome benchmark price has dropped 11.5% to 92 cents per lb for the first quarter of 2016. The drop could take contract prices below 60 cents per lb due to wide discounts, market sources said.
Yuri Rioneli left Raw & Refined Commodities on Thursday December 10 to become ceo of newly established trading company Helvetia Resources.
People news also came from 5N Plus. The Canadian speciality metals group has appointed Arjang Roshan as president and ceo following founder Jacques L’Ecuyer’s decision to step down in November.
Chinese cobalt participants looking to cover or stock up after last month’s large State Reserve Bureau purchases could create a technical squeeze in 2016, as they seek tight specification grades in an otherwise well-supplied metal market.
Charlotte Radford charlotte.radford@metalbulletin.com Twitter: @CRadford_MB