WEEK-IN-BRIEF: Trading in Hong Kong and the mainland (and a dancing Li); after Barclays; Widmer’s nickel call; Boeing’s prepared

Over in Hong Kong for LME Asia Week, the focus was on the island’s trading ties with China. Hong Kong Exchanges & Clearing (HKEx) ceo Charles Li said he hopes that mutual access in equities will be followed by mutual access in commodities.

Over in Hong Kong for LME Asia Week, the focus was on the island’s trading ties with China. Hong Kong Exchanges & Clearing (HKEx) ceo Charles Li said he hopes that mutual access in equities will be followed by mutual access in commodities.

Watch a video of Li, describing how LME Week Asia has grown since 2013 – and why.

Li and the Shanghai Futures Exchange chairman Maijun Yang were on stage together in what many observers took as a symbolic joint appearance; alongside them were representatives of other large mainland exchanges and the futures industry in China.

Users of the market were in the audience, looking for clues to the future – and observing the two men’s body language. Yang said he was exploring the possibility of collaboration with international exchanges.

Hong Kong Exchanges & Clearing will launch RMB-denominated, cash-settled metal contracts later this year.

(The exuberant Li danced on stage with three hip-hop performers during a high-energy series of performances at a dinner which was themed around James Bond.)

Britain-based bank Barclays was not at the conference, as it confirmed it was going to pull out of most of its metals trading business.

So a bank that had been a mainstay of commodities trading for years will stop taking risk in metals, though its position was already diminished after it pulled its ring trading team back in 2012.

Andrea Hotter examines the bank’s involvement in the market, and discusses what its departure might mean in the future.

Turnover at a large trading company grew, meanwhile.

The strong fundamental story about the nickel price, combined with a dose of fear about the situation in Ukraine, continues.

There is pressure on supply in North America.

Bank of America strategist Michael Widmer is making a call for $25,000-per-tonne nickel over the next year.

Boeing, meanwhile, said that is prepared for disruption to titanium supply as a result of the problems between Ukraine and Russia – though the aircraft maker classified such an event as unlikely

Copper TC/RCs have been rising in the price indexed by Metal Bulletin – but a senior executive at one large smelter said that was not enough to offset the fall in byproduct prices.

Copper premiums are steady in Europe, meanwhile, supported on one side by tight supply and stronger overseas demand, but weighed down by consumers’ withdrawal from the market.

The surplus forecast for copper this year was not evident in January, the ICSG said.

A zinc restart gave the germanium market much to ponder.

And interest in two more minor metal markets picked up after the Fanya Metal Exchange launched contracts in them.

Alex Harrison

aharrison@metalbulletin.com

Twitter: @alexharrison_mb

What to read next
US President Joe Biden will increase tariffs on Chinese imports including steel and aluminium, electric vehicles, semiconductors and advanced batteries, to counteract China’s “unfair” trading practices, he announced on Tuesday May 14
Anglo American's rejection of takeover bids by BHP has put copper firmly under the spotlight, but what challenges lie ahead for the red metal as the corporate tussle continues?
Copper fabricators in China and the wider Southeast Asian region continue to feel the pain of high copper prices on futures exchanges and a lack of new orderbooks, with some having already asked for a postponing of shipments of long-term copper cathodes, sources told Fastmarkets in the week to Wednesday May 15
Recent weeks have seen a significant number of miners agreeing sales of copper concentrate to traders for one to four years of supply, Fastmarkets has learned
The copper market is facing a historical moment with Chinese smelters now paying premiums for raw material copper concentrate while selling their finished product at a discount, but participants point to easing concentrate demand in the second quarter as supportive for the market
The new tariffs on aluminium imports imposed by Mexico are affecting the light metal's supply chain, trade flows and premiums, sources told Fastmarkets during the week to Friday May 3.