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Metals Industry News

CME Group's expanding global reach is key factor in growth of market share

Base Metals Market - Thu, 05/17/2018 - 17:33
The CME Group's growing share of global trade in recent years has been driven by its increasingly global reach since its commercial push in base metals began in 2012, its global head of metals Young-Jin Chang told Metal Bulletin this week.
Categories: Metals Industry News

LIVE FUTURES REPORT 17/05: Comex copper price inches higher; dollar rises

Base Metals Market - Thu, 05/17/2018 - 14:50
Comex copper prices inched higher in the US morning on Thursday May 17 despite the dollar index rising and general uncertain conditions in the geopolitical space.
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NORTH AMERICAN MORNING BRIEF 17/05: Major Malaysia ali rewarranting; LME Asia Week coverage

Base Metals Market - Thu, 05/17/2018 - 12:20
The latest metal markets news and price moves to start the North American day on Thursday May 17.
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LIVE FUTURES REPORT 17/05: LME aluminium price falls 1.3% after huge Malaysian rewarranting

Base Metals Market - Thu, 05/17/2018 - 12:03
Base metals on the London Metal Exchange were split into two camps during morning trading on Thursday May 17 after a large rewarranting of more than 138,000 tonnes of aluminium in Port Klang.
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FOCUS: Major Chinese copper smelter expansions to drive Q3 concentrate imports

Base Metals Market - Thu, 05/17/2018 - 11:44
New smelters and expansions at a suite of Chinese copper smelting companies will create fresh demand for concentrates from the third quarter of this year.
Categories: Metals Industry News

SHFE vs LME physical arbitrage 17/05: Copper, aluminium, zinc, nickel

Base Metals Market - Thu, 05/17/2018 - 11:14
The arbitrage for copper, aluminium, zinc and nickel imported into China on Thursday May 17*
Categories: Metals Industry News

China Ali ingot ADC 12 export price hits record high on tight scrap raw materials; domestic market under pressure on ample stock

Base Metals Market - Thu, 05/17/2018 - 10:55
Chinese aluminium ingot ADC 12 export prices to main Japanese ports (MJP) hit a record high on Wednesday May 16, pushed up by a tight raw material market in China after the temporary one-month shutdown of the China Certification & Inspection Group’s (CCIC) North American office, which stopped all scrap imports to China immediately.
Categories: Metals Industry News

FOCUS: Major Chinese copper smelter expansions to drive Q3 concentrate imports

Base Metals News - Thu, 05/17/2018 - 10:44

New smelters and expansions at a suite of Chinese copper smelting companies will create fresh demand for concentrates from the third quarter of this year.

Major smelters starting up in the coming months include Chalco’s Ningde smelter and Lingbao Jincheng Metallurgical, while Tongling’s Ausmelt project is due later this year.

Having been beset by a series of delays, Chinese copper smelting expansions are likely to ramp up next year.

Trial operations from next month should mark the start of a new wave of copper smelting and refining capacity in China, which should boost copper concentrate imports but could also cap growth in import demand for cathode and blister copper.

China’s copper concentrate imports at 4.67 million tonnes in the first quarter were up 8.37%, the highest figure ever for the first quarter of the year.

“[But] with additions over the past five years taking China to ~40% of global copper smelting output, and over 1 million tonnes of new capacity to be added of the rest of this year, this trend is posing new challenges in the copper market,” BMO Global Commodities Research head Colin Hamilton said in a note in April.

“With utilization rates heading below 85%, this tends to mean only one thing – depressed profitability,” he added.

Hamilton expects closures of outdated operations and a “one-in, one-out rule” governing new capacity in future, he also said.

“We have utilization rates falling below 80% in our numbers so, although this capacity is being added, it’s questionable whether it ends up being such a huge net addition if you see other capacity struggling to secure material,” David Wilson, a commodities strategist for trading house Freepoint Commodities, told Metal Bulletin by phone.

“Breakeven for the majority of Chinese smelting capacity would be spot TCs at $70 per tonne and sulfuric acid prices of 200 yuan ($31.40) per tonne,” he added. “Some of the less efficient capacity is going to get squeezed out one way or another by falling TCs or acid prices.”

Private copper smelters in southern China are the most at risk due to depressed regional sulfuric acid markets.

Annual concentrate treatment and refining charges (TC/RCs), fees paid to smelters for the costs of processing concentrate into metal, have declined consistently since 2015.

Annual benchmark copper TC/RCs settled at $82.25 per tonne/8.225 cents per lb for 2018 contracts, the lowest in five years. Meanwhile, the spot market last month slipped to its lowest since 2013 at $70/7 cents when traders bid down cargoes in expectation of a third-quarter deficit, based on demand from smelter expansions as well as potential mine supply disruptions.

RCs for 98-99% purity blister copper have risen sharply this year to $225-245 per tonne in the spot market, largely based on Chinese smelting capacity additions and a concurrent lack of refinery growth, market sources said.

“It’s very likely that we will see a lower copper concentrate TC/RCs in the second half year as smelters need to get well prepared for their expansion projects. If Glencore’s Pasar copper smelter and India-based Sterlite smelter recover operations in the second half year, no doubt it will depress TC/RC further by that time,” Xianfei Ji, a copper researcher at Guotai Junan Futures, said.

But continued delays to certain projects could defer at least some of this year’s demand boost until 2019.

“As the big project in Chifeng has been delayed to next year, and new projects to start up this year won’t reach full utilization, demand for copper concentrates is not as strong as market expected, so we don’t anticipate tight supply in raw materials in the second half of the year,” Citic Futures research director Yongqi Xu said.

June start date at Ningde
Chalco’s new smelter in Ningde, Fujian province, will begin trial operations at the end of June as planned, sources at the company said. Although construction of the project is complete, auxiliary furnaces are not yet ready, a market source said.

Full refined copper capacity, to be realized in two phases, will be 400,000 tonnes per year. Trail operation of the first phase will bring refined copper capacity of 200,000 tpy come online this year.

But the expected capacity utilization rate during trial operations will be 40-50% of this total, in line with standard industry practice, sources said.

Given anti-pollution controls in place at the plant, the company does not expect to fall foul of environment protection policy, sources added.

Yunnan Copper’s concentrates buying team will handle concentrates purchasing for the Ningde smelter, sources with knowledge of the matter said.

Trial ops to start at Lingbao, Tongling Jinchang smelter to start in H2
Meanwhile, Henan-based Lingbao City Jincheng Metallurgical Co Ltd will start trial production of a new 100,000-tpy refined copper smelter in the third quarter as planned, a company source said.

The company expects to consume 180,000 tonnes of copper concentrates during a July-September trail period, with 60% likely to consist of imported material.

After the trial, the smelter project will have a three-month adjustment period and will officially enter operation from the start of next year, the company source added.

“The major business of the company is gold smelting. The copper project aims to improve the purity of its smelted gold,” a market source said.

And Tongling Nonferrous Metals Group will start its new Jinchang smelter at an as-yet undecided date in the second half – a slight delay from its earlier plan for a second-quarter start-up.

The smelter will have full blister capacity of 200,000 tpy, of which 50% will supply the company’s affiliated refinery, a company source said, adding the project is still in the equipment installation phase.

Yunnan Copper’s Chifeng Project delayed
Not all projects are ramping up on-schedule, though – the expansion of Yunnan Copper’s Chifeng project in Inner Mongolia to 400,000 tpy from 130,000 tpy at present has been delayed until next year, sources with direct knowledge of the matter said.

“It was planned for this October but now the commencement date has been postponed to April 2019, a delay of six months or so,” one source said.

A source at Yunnan Copper confirmed that the smelter’s arrival will be delayed but declined to provide a date when it expects either trial or commercial production to start.

In the first phase of the project, Yunnan Copper will build and ramp up production at a 200,000-tpy smelter to complement existing operations. In the second phase, capacity at the new smelter will be expanded by 200,000 tpy, at which point the original smelter will be closed.

“We started stocking concentrates for projects from the second half of last year,” the source at Yunnan Copper said.

Other expansion projects to track
Henan-based Zhongyuan Gold Smelter started a new smelting project in January to raise its refined copper capacity to 350,000 tpy from 200,000 tpy, two market sources said.

Meanwhile, participants are closely watching other smelter expansions. These include projects at Yuguang Gold & Lead to raise refined capacity by 100,000 tpy, with trial operations starting as planned; and Qinghai Western Mining, to raise refined capacity by 100,000 tpy, where trial operations also started in the second quarter

Further forward, Shandong Humon Smelting will start trail operations in the third quarter on a project to increase refined capacity by 170,000 tpy; and Guangxi Southern Copper will raise refined capacity by 300,000 tpy, with trial operation set to start either in the fourth quarter or in 2019 – details have yet to be confirmed.

Citic Futures has lowered its anticipated smelting growth forecast in China to 700,000 tonnes for 2018 from earlier expectations of more than 1 million tonnes, Xu said.

“The growth rate in raw materials [supply] is slower than smelter capacity growth. Currently, it’s good enough for Chinese smelters to see TCs remaining above $70 per tonne this year compared with the current level of $75-78,” Citic’s Xu said. “[But] we expect a worse situation for smelters next year.”

Additional reporting by Julian Luk in Hong Kong

The post FOCUS: Major Chinese copper smelter expansions to drive Q3 concentrate imports appeared first on FastMarkets.

Categories: Metals Industry News

LME ASIA WEEK 2018: NEV story ‘not a red herring’, says Goldman Sachs

Base Metals Market - Thu, 05/17/2018 - 10:31
The new energy vehicle (NEV) story is not a “red herring” and nickel physical market participants need to lock in prices now , according to Robert Hawkes, executive director, Goldman Sachs International.
Categories: Metals Industry News

LME ASIA WEEK 2018: LME does not have revenue projections for OTC booking fees, CEO says

Base Metals Market - Thu, 05/17/2018 - 09:55
The London Metal Exchange does not have projections of how much revenue it might make every year from the introduction of the over-the counter (OTC) booking fees, the exchange’s chief executive officer (CEO) Matthew Chamberlain has said.
Categories: Metals Industry News

LME ASIA WEEK 2018: LME confident that warehouses fulfill role positively - CEO

Base Metals Market - Thu, 05/17/2018 - 08:40
The London Metal Exchange believes its warehousing system is robust and remains committed to working with members to make warehousing easier, according to the exchange’s chief executive officer (CEO).
Categories: Metals Industry News

LME ASIA WEEK 2018: LME confident that warehouses fulfill role positively – CEO

Base Metals News - Thu, 05/17/2018 - 07:40

The London Metal Exchange believes its warehousing system is robust and remains committed to working with members to make warehousing easier, according to the exchange’s chief executive officer (CEO).

“We are confident that our warehouses reflect the underlying elasticity of supply,” Matthew Chamberlain told delegates of the LME Asia Metals Seminar in Hong Kong on Thursday May 17.

“There is no target level for stocks. All we want is a network that reflects real-world buying and selling, and that the metal is there when we need it,” Chamberlain added.

The exchange came under fire following its warehousing reform – which saw the implementation of the Load-In/Load-Out policy in 2013 and queue-based rent capping rules in 2015.

Both fulfilled their duty of removing structural queues at LME warehouses, but in turn stocks at LME-listed warehouses have fallen significantly in recent years.

“Stocks peaked in 2012/13 but we took definitive action to solve problems with the warehouses which meant stocks fell as a result,” Chamberlain said.

“People were worried. They questioned: ‘Did we break our warehousing network?’ – but we, the LME, do not believe we did that,” he said.

Chamberlain noted that stocks at LME warehouses had begun to rebound in the first few months of this year – although have fallen in recent weeks due to recent developments, with aluminium stocks being sucked up to meet global demand.

“We continue to work extremely hard with our warehousing network and through our warehousing committee are always working to make things better,” Chamberlain added.

Pleased with Rusal reaction
Following the announcement on April 6 that US Department of the Treasury had sanctioned and frozen the assets of Oleg Deripaska and Russian aluminium producer UC Rusal, the LME reacted quickly by introducing a “conditional temporary suspension” on placing Rusal metal on-warrant in its warehouses.

The exchange stated that the suspension is in place unless “the metal owner can demonstrate to the satisfaction of the LME that it will not constitute a breach of the sanctions.” The suspension is still in effect – and remains so until further notice.

“Aluminium has certainly been complex, and the biggest danger with any sanction or tariff is uncertainty,” Chamberlain said.

“But the LME acted quickly and decisively and we are pleased to see the global industry followed by accepting LME warehouse-approved metal to be used in the industry,” he added.

The post LME ASIA WEEK 2018: LME confident that warehouses fulfill role positively – CEO appeared first on FastMarkets.

Categories: Metals Industry News

EUROPEAN MORNING BRIEF 17/05: SHFE base metals prices up across the board; zinc market logs modest surplus in Q1; TCI to invest $1 bln in US Ali market

Base Metals Market - Thu, 05/17/2018 - 05:45
Good morning from Metal Bulletin’s offices in Asia as we bring you the latest news and pricing stories on Thursday May 17.
Categories: Metals Industry News

LIVE FUTURES REPORT 17/05: Weaker dollar gives SHFE base metals prices a boost; copper rises on short-covering

Base Metals Market - Thu, 05/17/2018 - 05:32
Base metals prices on the Shanghai Futures Exchange were up across the board during Asian morning trading on Thursday May 17 after the dollar weakened, with copper seeing additional support from short-covering.
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LME ASIA WEEK 2018: LME will not build dealer-to-client platform – Chamberlain

Base Metals Market - Thu, 05/17/2018 - 04:55
The London Metal Exchange has shelved its idea of developing a dealer-to-client platform, following the results of last year’s discussion paper, the exchange’s chief executive officer Matthew Chamberlain said.
Categories: Metals Industry News

LME WEEK ASIA 2018: LME will not build dealer-to-client platform – Chamberlain

Base Metals Market - Thu, 05/17/2018 - 04:55
The London Metal Exchange has shelved its idea of developing a dealer-to-client platform, following the results of last year’s discussion paper, the exchange’s chief executive officer Matthew Chamberlain said.
Categories: Metals Industry News

EUROPEAN MORNING BRIEF 17/05: SHFE base metals prices up across the board; zinc market logs modest surplus in Q1; TCI to invest $1 bln in US Ali market

Base Metals News - Thu, 05/17/2018 - 04:45

Good morning from Metal Bulletin’s offices in Asia as we bring you the latest news and pricing stories on Thursday May 17.

Base metals prices on the Shanghai Futures Exchange were up across the board during Asian morning trading on Thursday after the dollar weakened, with copper seeing additional support from short-covering.

Check Metal Bulletin’s live futures report here.

LME snapshot at 04:23.am London time Latest three-month LME Prices   Price ($ per tonne) Change since previous session’s close ($) Copper 6,861.50 35.5 Aluminium 2,334 18.5 Lead 2,348.50 7.5 Zinc 3,091.50 17 Tin 20,815 90 Nickel 14,550 75

 

SHFE snapshot at 11.23 am Shanghai time Most-traded SHFE contracts   Price (yuan per tonne) Change since previous session’s close (yuan) Copper (Jul) 51,180 160 Aluminium (Jul) 14,910 120 Zinc (Jul) 23,840 60 Lead (Jun) 19,450 40 Tin  (Sep) 146,200 490 Nickel  (Jul) 108,090 350

The global refined zinc market logged a modest surplus in the first quarter due to rising inventories that have kept a lid on premiums for the metal, although market participants are expecting higher freight rates to spur a pickup.

Ta Chen International (TCI) will invest $1 billion in the aluminium market in the United States in response to a growing supply deficit, the company’s top executive said.

Tharisa has acquired a 90% stake in Salene Chrome Zimbabwe Ltd for an undisclosed sum, the South African chrome producer announced on Wednesday.

The stainless steel scrap market in the US stalled this week, with prices for nickel, chrome and iron all largely holding steady.

The post EUROPEAN MORNING BRIEF 17/05: SHFE base metals prices up across the board; zinc market logs modest surplus in Q1; TCI to invest $1 bln in US Ali market appeared first on FastMarkets.

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LIVE FUTURES REPORT 17/05: Weaker dollar gives SHFE base metals prices a boost; copper rises on short-covering

Base Metals News - Thu, 05/17/2018 - 04:32

Base metals prices on the Shanghai Futures Exchange were up across the board during Asian morning trading on Thursday May 17 after the dollar weakened, with copper seeing additional support from short-covering.

The most-active July copper contract on the SHFE traded at 51,180 yuan ($8,029) per tonne as at 11.23am Shanghai time, up 160 yuan per tonne from Wednesday’s close. Around 120,000 lots of the contract have changed hands so far this morning.

Copper prices had weakened earlier this week to as low as 50,690 yuan per tonne on Tuesday amid concerns over rising stock levels. On Thursday, investors closed their short positions to take profit on the contract which saw open interest for the contract fall to 214,748 positions at as 10.56am Shanghai time, from 215,988 positions at Wednesday’s close.

The macroeconomic environment is stable, but the rise in domestic copper stock levels could apply downward pressure on copper prices, Guotai Junan Futures said in a note on Thursday.

Copper inventories in SHFE warehouses rose for a second consecutive week in the week ended May 11, reaching a total of 279,525 tonnes. Stocks in London Metal Exchange warehouses had risen consecutively over Monday and Tuesday, but saw a slight 525-tonne net decline to 290,825 tonnes on Wednesday.

In news, Polish copper producer KGHM was reported to have said on Tuesday that it has temporarily closed its Sierra Gorda copper mine in Chile following a fatal accident.

“With copper production of 101,700 tonnes last year and accounting for only 1.85% of Chile’s total production, the impact of the shutdown should be limited,” China’s Ruida Futures said late on Wednesday.

Meanwhile, the dollar index has eased after hitting as high as 93.64 on Wednesday, the highest since December 19, 2017. It was at 93.17 as at 11.22am Shanghai time, down 0.13% from its previous closing price.

US industrial production data provided further evidence that activity is expanding at a stronger pace in the second quarter, ANZ Research said on Thursday.

US data suggests that the US Federal Reserve is “locked and loaded” for a June rate rise, the bank said.

“However, we think it will pause after that until December, but the three or four hike debate for 2018 will continue to run,” it added.

Base metals prices

  • The SHFE July aluminium contract price increased 120 yuan per tonne to 14,910 yuan per tonne.
  • The SHFE June lead contract price rose 40 yuan per tonne to 19,450 yuan per tonne.
  • The SHFE July zinc contract price gained 60 yuan per tonne to 23,840 yuan per tonne.
  • The SHFE September tin contract price edged up 490 yuan per tonne to 146,200 yuan per tonne.
  • The SHFE July nickel contract price jumped 350 yuan per tonne to 108,090 yuan per tonne.

Currency moves and data releases

  • The US dollar index was at 93.17 as at 11.22am Shanghai time, down 0.13% from its previous closing price. The index has eased after hitting as high as 93.64 on Wednesday, the highest since December 19, 2017.
  • In other commodities, the Brent crude oil spot price rose 0.1% to $79.37 per barrel as at 11.21am Shanghai.
  • In equities, the Shanghai Composite fell 0.4% to 3,156.92 as at 11.20 am Shanghai time.
  • In US April data released on Wednesday, industrial production grew close to expectations at 0.7%, while building permits were in line with forecasts at 1.35 million. Capacity utilization rate at 78% and housing starts at 1.29 million were, however, somewhat lower than their projections. Weekly crude oil inventories fell 1.4 million barrels, close to the forecast of a 1.1-million decline.
  • US data due later today includes the Philly Fed Manufacturing Index, unemployment claims and CB Leading Index.

 

SHFE snapshot at 11.23 am Shanghai time Most-traded SHFE contracts   Price (yuan per tonne) Change since previous session’s close (yuan) Copper (Jul) 51,180 160 Aluminium (Jul) 14,910 120 Zinc (Jul) 23,840 60 Lead (Jun) 19,450 40 Tin  (Sep) 146,200 490 Nickel  (Jul) 108,090 350

 

LME snapshot at 04:23.am London time Latest three-month LME Prices   Price ($ per tonne) Change since previous session’s close ($) Copper 6,861.50 35.5 Aluminium 2,334 18.5 Lead 2,348.50 7.5 Zinc 3,091.50 17 Tin 20,815 90 Nickel 14,550 75

 

Changjiang spot snapshot on May 17   Range (yuan per tonne) Change (yuan) Copper  50,960-51,000 230 Aluminium 14,730-14,770 100 Zinc 24,040-24,090 50 Lead 19,350-19,550 50 Tin  144,000-145,500 0 Nickel  107,900-108,000 850

The post LIVE FUTURES REPORT 17/05: Weaker dollar gives SHFE base metals prices a boost; copper rises on short-covering appeared first on FastMarkets.

Categories: Metals Industry News

LIVE FUTURES REPORT 16/05: LME base metals consolidate; nickel firm

Base Metals Market - Wed, 05/16/2018 - 18:00
Base metals on the London Metal Exchange recorded mixed figures at the close of trading on Wednesday May 16, with low volumes traded and broad consolidation in effect across the complex amid a surging dollar.
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