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EUROPEAN MORNING BRIEF 14/02: SHFE base metals broadly higher; global copper premiums; zinc supply issues

Base Metals Market - Wed, 02/14/2018 - 05:00
Good morning from Metal Bulletin’s office in Shanghai as we bring you the latest news and pricing stories on Wednesday February 14.
Categories: Metals Industry News

GLOBAL ALUMINIUM WRAP: US Midwest, Europe premiums rise; Asia stable ahead of holidays

Base Metals Market - Wed, 02/14/2018 - 04:45
Aluminium premiums in the United States and parts of Europe rose over the past week, while those in Asia were unchanged ahead of the Lunar New Year holidays in the region.
Categories: Metals Industry News

SHFE base metals rise ahead of New Year holiday

Base Metals News - Wed, 02/14/2018 - 03:35

Base prices on the Shanghai Futures Exchange (SHFE) rose during Asian morning trading on Wednesday February 14, the last trading day before the Lunar New Year break.

The May nickel contract on the SHFE stood at 102,860 yuan ($16,191) per tonne as of 10.00 am Shanghai time, up by 1,990 yuan, or 2%, from the previous session’s close of 100,870 yuan per tonne.

Demand from the stainless steel sector remains strong, with world stainless steel melting production increasing 7.4% year on year in January-September 2017, the latest figures from the International Stainless Steel Forum (ISSF) show.

“Demand from Chinese steel mills, however, is expected to slow over the short-to-medium term because cost constraints will be exacerbated by environmental-related and Lunar New Year capacity closures, but this should be offset by strong demand elsewhere,” according to Metal Bulletin analyst James Moore.

The most-traded SHFE April copper contract price stood at 52,630 yuan per tonne, up 490 yuan, or 0.8%, from the previous session’s close of 52,140 yuan per tonne, after a rally in LME prices.

The three-month LME copper price continues to recoup its losses, closing yesterday $156 per tonne higher at $6,987 per tonne. The red metal has risen 3.4% so far this week.

Base metals all up

  • The SHFE March lead contract price increased by 265 yuan, or 1.4%, to 19,280 yuan per tonne.
  • The lead market remains bullish – the global lead market was in a 169,000-tonne deficit in January-November 2017, according to the latest data from the International Lead & Zinc Study Group (ILZSG).
  • The SHFE May tin contract price rose by 1,970 yuan, or 1.3%, to 148,770 yuan per tonne.
  • The SHFE April zinc contract price was up 1.2% at 26,535 yuan per tonne.
  • The SHFE April aluminium contract price increased 15 yuan, or 0.1%, to 14,395 yuan per tonne.

Currency moves and data releases

  • The dollar index decreased by 0.14% to 89.59 as of 10.37 am Shanghai time.
  • In other commodities, the Brent crude oil spot price was up by 0.24% at $62.79 per barrel.
  • In equities, the Shanghai Composite was down by 0.12% at 3,181.13.
  • In data yesterday, the UK Consumer Price Index (CPI) increased 3% year on year, higher than the forecast 2.9%, while the Producer Price Index (PPI) rose 0.7%, in line with expectations.
  • In data today, EU flash GDP and industrial production numbers are due out, while in the United States CPI, retail sales and crude oil inventories figures will be released.

The post SHFE base metals rise ahead of New Year holiday appeared first on FastMarkets.

Categories: Metals Industry News

LIVE FUTURES REPORT 14/02: SHFE base metals rise ahead of New Year holiday

Base Metals Market - Wed, 02/14/2018 - 03:35
Base prices on the Shanghai Futures Exchange (SHFE) rose during Asian morning trading on Wednesday February 14, the last trading day before the Lunar New Year break.
Categories: Metals Industry News

GLOBAL COPPER WRAP: Copper premiums up in Shanghai, Europe, in week of large LME deliveries

Base Metals Market - Wed, 02/14/2018 - 03:25
Copper price premiums became firmer in Shanghai and Europe over the past week when 51,050 tonnes of cathode material were delivered to the London Metal Exchange, illustrating the growing disparity between the paper and physical markets.
Categories: Metals Industry News

Latest PPS aluminium tender premiums seen as slightly low

Base Metals Market - Wed, 02/14/2018 - 03:10
South Korea’s Public Procurement Service has awarded two 1,000-tonne tenders for good western and non-good western aluminium at premiums market participants consider to be slightly low against expectations of higher premiums in the second quarter.
Categories: Metals Industry News

IZA CONF 2018: Zinc mine output to accelerate in H2, tipping market balance, Concord exec says

Base Metals Market - Wed, 02/14/2018 - 01:51
World zinc mine output is expected to accelerate well ahead of demand for the second half of this year, tipping the balance in the market, an executive at physical merchant Concord Resources said.
Categories: Metals Industry News

WEEKLY BASE METAL PREMIUMS REPORT 13/02

Base Metals Market - Tue, 02/13/2018 - 21:20
A summary of base metals premiums across the globe for the week to Tuesday February 13.
Categories: Metals Industry News

LIVE FUTURES REPORT 13/02: LME base metals continue strong rebound; most metals close up 2%

Base Metals Market - Tue, 02/13/2018 - 17:25
Base metals prices on the London Metal Exchange were in positive territory across the board at the close on Tuesday February 13, after the complex was boosted by a weaker dollar and continued to rebound following last week’s sell-off.
Categories: Metals Industry News

FOCUS: Metals traders’ worries mount over status of Reach after Brexit

Base Metals News - Tue, 02/13/2018 - 16:00

Uncertainty surrounding Brexit continues to be a concern for UK metals traders from small- and medium-sized enterprises conscious that The Registration, Evaluation, Authorisation and Restriction of Chemicals (Reach) deadline is looming, Metal Bulletin learned at last week’s REACH Under The Microscope Forum.

While some traders are still unregistered and grappling with paperwork to meet the deadline of May 31, 2018, most are concerned what will happen to Reach after Brexit.

“We spent €100,000 [$122,761] on registration already. We cannot afford to spend again on a UK system,” a trader from a small metals trading firm said. “Even though we have paid for registration, we won’t get a refund on our fees and might also lose rights to the registration data.”

The UK’s Department for Environment, Food & Rural Affairs (Defra) reiterated its hard stance on Brexit at the REACH under the Microscope event in London.

The government department said it will establish a separate UK regulatory system for chemicals rather than be subject to the European Chemicals Agency’s (ECHA) chemical control system which requires every substance used or produced in Europe to be registered.

“The UK will create a UK-based platform, similar to the current REACH-IT, which will cost around £5.8 million [$8 million] and include a database of chemicals manufactured in or imported into the UK,” Simon Johnson, a member of the EU Exit Team on chemicals, pesticides and hazardous waste and environmental quality, said at the event.

The United Kingdom is scheduled to leave the European Union on March 29, 2019, less than one year after the deadline for all EU metals companies to register to Reach, although the UK will continue to comply with EU law during the transition period to the end of December 2020.

Johnson assured traders there would be no reduction in environmental standards under the UK-based platform.

“Decisions have been taken and we will ensure that existing UK institutions will continue to be recognized in the EU. That is our aim,” he added.

Johnson said the UK would look at international systems, such as the regulatory models in Switzerland and South Korea, which had arrangements in place similar to Reach.

Traders worried over costs
But small traders are concerned the move towards a UK-based regulatory system will create obstacles to their business.

“If the EU does not recognize the UK system, we will lose our ability to import,” a trader said. “If we can no longer import, we may be driven out of business.”

The loss of smaller traders could change the UK’s market share in global metals trading, leaving only larger companies competing in the international market.

While big companies already have offices in other jurisdictions in Europe to which they can transfer their Reach registrations to, smaller companies are disadvantaged.

For one, the rules state that only entities with “legal personality” (i.e. legally registered corporations) can be Reach registrants. This means companies cannot simply have a post box in another country in Europe to qualify. Also, only certain changes in legal personality of a company, such as changes in shareholders, ownership-type, absorption and asset transfer are allowed in order to transfer registration.

Moreover, there are myriad factors to consider when transferring to an EU entity.

“Registrants need to consider costs, rights to data, contractual arrangements and tax implications,” Raminta Dereskeviciute, special counsel at law firm K&L Gates, said.

She said companies should also review legitimate rights to Reach data held by UK entities.

“We are a small company and will be unable to set up offices elsewhere in Europe,” a second trader said. “I am worried I will be driven out of a job.”

“I have been speaking to many traders and the main concerns they have expressed is many of them have spent significant money and time in order to comply with the EU regulation for access to the market,” an industry source told Metal Bulletin.

“Many UK market participants have also been lead registrants in SIEFs (Substance Information Exchange Forum),” the source added. “Now do they lose that access to the database?”

Dereskeviciute said firms worried about Reach data held by UK entities should conduct a review.

“Companies should start using Brexit clauses in Reach contracts, such as letters of access and licenses to use,” Dereskeviciute said.

But another trader said he was not particularly concerned over Reach. “There is no point fretting over something that has happened yet,” he said. “The easiest thing to do would be to clone whatever is currently in place. Even if the EU does not recognize our system, I’m sure we will find ways around it.”

The post FOCUS: Metals traders’ worries mount over status of Reach after Brexit appeared first on FastMarkets.

Categories: Metals Industry News

FOCUS: Metals traders’ worries mount over status of Reach after Brexit

Base Metals Market - Tue, 02/13/2018 - 16:00
Uncertainty surrounding Brexit continues to be a concern for UK metals traders from small- and medium-sized enterprises conscious that The Registration, Evaluation, Authorisation and Restriction of Chemicals (Reach) deadline is looming, Metal Bulletin learned at last week’s REACH Under The Microscope Forum.
Categories: Metals Industry News

FOCUS: Largest LME aluminium delivery in 4 years to swing spreads back into contango

Base Metals News - Tue, 02/13/2018 - 14:50

Aluminium stocks on the London Metal Exchange have increased nearly 30% over the last three trading days, with market participants taking advantage of tightness in the February/March nearby spread.

Aluminium P1020A, in-warehouse Rotterdam duty-unpaid, spot low-high, $/tonne 166,225 tonnes were delivered onto the exchange today, the largest single delivery of aluminium into LME-listed warehouses since March 19, 2014.

“There is backwardation [in the February/March-2018 spread] and someone took advantage of it – when there is a backwardation people tend to deliver onto the exchange,” a trader said.

“The deliveries are linked to the February/March spread backwardation. If the spreads are tight then it does not make sense to keep hold of the metal,” a floor trader added.

Traders told Metal Bulletin that the deliveries are expected to help swing the nearby spreads back into contango.

The February/March-2018 LME spread has narrowed to a $2 per tonne contango from $5 per tonne on Friday February 9, while the benchmark cash/three-month spread has swung to a wider contango since the large delivery, now at $5.25c per tonne.

“The deliveries have an influence on the backwardation, which will disappear. It is already dwindling now,” a market source said.

“An increase in the aluminium deliveries in Asia is because of the backwardation, which has resulted in pressure to liquidate,” a second trader added.

LME aluminium stocks have increased a total 183,800 tonnes since Thursday February 8, with 41,650 tonnes delivered on Friday and 22,175 tonnes delivered on Monday before today’s large delivery.

79.8% of the stocks delivered in over these three trading days has been in Port Klang, with the rest of the metal split between Singapore and Johor – the majority of the metal is ingots.

More deliveries to come? 

On-warrant aluminium stocks in LME warehouses were at a nine-year low toward the end of 2017 having plummeted significantly after warehouse reforms in 2013 and 2015.

Although, following today’s delivery some market participants expect even more metal to be delivered to the LME.

“This could be an artificial squeeze, the tightness in March shouldn’t be there. But there are always people who purchase during the fire sale in December and are holding and waiting to deliver in February/March… There is likely to be more to come,” a third trader said.

“If it’s not just because of the backwardation and there is more to it, then we will see further deliveries over the next few weeks. Another 100,000 tonnes would not be surprising,” a warehousing source said.

“The general view is that it is being dumped there while China is on holiday – it is all Port Klang material,” a source added.

Physical traders buoyed by deliveries 
Traders and sellers on the physical market welcomed the large deliveries – viewing it as a bullish sign for premiums.

Global premiums are experiencing a bull run, but the persistent backwardation has been capping more exaggerated movements higher, with the benchmark Rotterdam duty-unpaid premium steady from the February 5 assessment at $100-107 per tonne, its highest level in a year.

“To me, this move is bullish for spreads and supportive of premiums, which is a good sign,” a trader in Europe said.

Justin Yang, Vivian Teo and Shivani Singh contributed to this article.

 

The post FOCUS: Largest LME aluminium delivery in 4 years to swing spreads back into contango appeared first on FastMarkets.

Categories: Metals Industry News

FOCUS: Largest LME aluminium delivery in 4 years to swing spreads back into contango

Base Metals Market - Tue, 02/13/2018 - 14:50
Aluminium stocks on the London Metal Exchange have increased nearly 30% over the last three trading days, with market participants taking advantage of tightness in the February/March nearby spread.
Categories: Metals Industry News

FOCUS: Largest LME Ali delivery in 4 yrs to swing spreads back into contango

Base Metals Market - Tue, 02/13/2018 - 14:50
Aluminium stocks on the London Metal Exchange have increased nearly 30% over the last three trading days, with market participants taking advantage of tightness in the February/March nearby spread.
Categories: Metals Industry News

Umicore 2017 results give reasons for optimism

Base Metals Market - Tue, 02/13/2018 - 14:25
Financial results for 2017 at multinational minerals technology company Umicore contained several items that bode well for the future of the Belgium-based company, chief executive officer Marc Grynberg told Industrial Minerals at a media breakfast in London on Monday February 12.
Categories: Metals Industry News

Aurubis in talks to sell flat-rolled copper products division to Wieland-Werke

Base Metals Market - Tue, 02/13/2018 - 13:33
German copper giant Aurubis is in advanced negotiations to sell its Flat Rolled Products division to semi-finished product manufacturer Wieland-Werke.
Categories: Metals Industry News

NORTH AMERICAN MORNING BRIEF 13/02: LME ali stocks surge; manganese ore output up 26% in 2017; PPS zinc tender

Base Metals Market - Tue, 02/13/2018 - 12:32
The latest metal markets news and price moves to start the North American day on Tuesday 13 February.
Categories: Metals Industry News

SHFE vs LME physical arbitrage 13/02: Copper, aluminium, zinc, nickel

Base Metals Market - Tue, 02/13/2018 - 10:06
The arbitrage for copper, aluminium, zinc and nickel imported into China on Tuesday February 13*
Categories: Metals Industry News

LME prices climb higher; ali capped by huge 166,000 tonne delivery

Base Metals News - Tue, 02/13/2018 - 10:02

Aluminium prices on the London Metal Exchange have retreated from early morning highs after a significant delivery into LME-listed warehouses in Asia caused on-warrant stock to surge by 18%.

The three-month price was trading at a high of $2,151 per tonne – a $27 per tonne increase compared to Monday’s close price – before warehouse stock data was released at 9am UK time.

Some 166,225 tonnes were delivered in this morning, 99% of which entered Port Klang. This follows 22,175 tonnes on Monday and 41,650 tonnes on Friday February 9. The three-month price is now up just $9 compared to yesterday’s close price.

“The aluminium price will continue retreat over the next few hours as people take a step back after the stock data. No doubt this has to weaken prices,” an analyst said.

“The increase in the aluminium deliveries in Asia is because of the backwardation, which has resulted in pressure to liquidate. With the LME and SHFE aluminium stocks both increasing, there could be pressure on aluminium after Chinese New Year holidays,” a trader added.

Most of the complex was trading in positive territory this morning, other than lead, with the softer dollar underpinning prices.

Copper continues to recover 
The three-month copper price was $82.50 higher than Monday’s 5pm close at $6,913.50 per tonne. Inventories dipped a net 825 tonnes to 333,025 tonnes, with 8,300 tonnes freshly cancelled.

The red metal has recovered 3% since Friday’s close price and has rallied through another support level to trade back above $6,900 per tonne.

“Only copper has posted any volume of note so far as it outperforms in both price and volumetric terms amid onshore buying and some Western short-covering encouraged by the macro stability,” Marex Spectron said.

“So long as we see the recent macro stability maintained I feel we may be in a short-term (and medium-term) ‘value zone’ for some of these metals with the US dollar looking a little tired in the immediate term. Timing as always is key but I would expect any dips to be well supported this afternoon,” it added.

Base metals prices 

  • The three-month aluminium price increased $9 to $2,133 per tonne. Stocks increased 158,925 tonnes to 1,275,500 tonnes.
  • Nickel’s three-month price was $130 higher at $13,230 per tonne. Inventories declined 2,154 tonnes to 339,006 tonnes.
  • The three-month zinc price was most recently trading at $3,416.50 per tonne, an increase of $35.50. Stocks fell 825 tonnes to 156,125 tonnes.
  • Lead’s three-month price was $10 lower at $2,506 per tonne. Stocks declined 1,125 tonnes to 122,700 tonnes.
  • The three-month tin price increased $62 to $21,160 per tonne. Inventories declined 10 tonnes to 1,925 tonnes.

Currency moves and data releases

  • The dollar index declined 0.27% to 89.85.
  • In other commodities, the Brent crude oil spot price was down 0.35% to $62.41 per barrel.
  • In data on Monday, Chinese new loans surged to a record 2.9 trillion yuan ($450.9 billion) in January – nearly five times the previous month. Meanwhile, the country’s M2 money supply also surprised to the upside with a reading of 8.6%, against an expected print of 8.2%.
  • The economic agenda is relatively light today with UK data including consumer price index (CPI), producer price index (PPI) input, retail price index, core CPI, house price index and PPI output.
  • There is also the NFIB small business index from the United States of note.
  • In addition, US Federal Open Market Committee member Loretta Mester is speaking.

 

The post LME prices climb higher; ali capped by huge 166,000 tonne delivery appeared first on FastMarkets.

Categories: Metals Industry News

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