Blog News – Pause

Dear Blog Readers,

 

We are sincerely thankful to you for following our daily blog posts & that way informing yourselves about current global situation in Metals and Oil market. We hope that this info was useful, and that you enjoyed every moment of reading it.

 

We are also thankful, for you being loyal through all these months with your feedback & comments, helping us improve our content & adjust flexibility so that way it became easier for you to keep in touch with fresh commodities news.

 

This specific post is for you to be notified that, in upcoming months our blog is going to be closed. Due to our reporters and their cooperates investigating some further info & metal issues.

 

Once again we are deeply thankful for your attention.

 

We wish you all the best & great success with your further work,

 

Sox Group

 

 

P.S. If you have any further questions you can contact us through our site or email.

 

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Short report on Base Metals Trade Today

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Speaking about base metal market on September 4.. We see copper up for +0.9%, nickel +0.9% and tin 0.2%. All the prices pushing higher.

On the other hand, the rest are weaker. Or little changed with aluminium off 0.8%, zinc off 0.5% and lead flat.

After Friday, Today’s volume of trade is high, with 14,593 lots traded as of 07:15 BST.

 

Precious Metals

Precious metal prices are up 0.9% on average this morning. Together with spot gold prices up 0.9% at $1,337.23 per oz. Silver and the PGMs up by similar percentages.

This follows a strong day on Friday, especially for palladium where prices rallied 4.8% to $980 per oz. While gold prices closed up 0.3%, silver and platinum closed up 0.8%.

 

SHFE

In Shanghai Futures Exchange today the base metals are for the most part stronger. Going with average gains of 1%. Copper prices up 0.8% at 53,150 yuan ($8,120) per tonne. Most noteworthy, nickel prices are the strongest. They are up 2.9%, while lead prices are up 1.7% and zinc up 1.2%. On the other hand, tin prices are little changed and aluminium prices are off 0.6%.

 

“Spot copper prices in Changjiang are up 1% at 52,900-53,230 yuan per tonne and the London/Shanghai copper arb ratio is weaker at 7.69 (7.74).” (Fast Markets)

Steel rebar prices on the SHFE are up 2.4%, while gold and silver prices are up by 0.7% and 1.3% respectively. Iron ore prices for January delivery are off 0.7% at 573.50 yuan per tonne on the Dalian Commodity Exchange.

 

Speaking about the international markets, spot Brent crude oil prices are off 0.9% at $52.29 per barrel.

And the yield on US ten-year treasuries has climbed to 2.17%, while the German ten-year bund yield is little changed at 0.36%. (Fast Markets)
The Chinese yuan is currently at 6.5447. Which is at its strongest since June last year.  This suggests confidence in the economy. Most of the other emerging market currencies we follow are firm, suggesting little risk-off appetite.

Aluminium, Zinc, Copper and nickel prices are trading at really high levels, in comparison with previous months. Tin and lead prices are lagging behind, but the volume is at high level in global.

Having geopolitical events in mind, there may be some diversification going on amongst investors. Trading is likely to get intensive as higher prices attract profit-taking.

 

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China: Steel futures hitting high

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Top 5 things to pay attention to this week:

  1. ECB policy meeting
  2. U.S. ISM services PMI
  3. UK PMIs
  4. China trade figures
  5. Bank of Canada rate decision

 

China steel future prices:

In the beginning, China’s steel future prices jumped to their high this morning. It is the highest in 4 and a half years. The fire might lead to the new round of inspections…

One of the most active rebar futures on SHFE hit $639.87 (4,194yuan) a tonne. This is the highest level since the winter of 2013. The news about the fire at Bengang Steel Plates plant have influenced the chinese market really serious.

“Spot rebar prices picked up 0.9 percent to 4,310.42 yuan a tonne on Friday, showed data from Mysteel website. “ (Reuters)

Further fire will affect 4,500-5,000 tonnes of daily output of steel. Apart from influence that it will have on Benang itself, it also leaves a mark on Benxi Iron and Steel Group Co.

Later the analysts and investors think that the incident could inspire stricter safety inspections at mills. Leading to production halts and intensifying a shortage of supply.

“Under the pressure of strict environmental policy, expectation of tight supply has offset concerns over weak demand downstream which is also likely to be affected by inspections.” (Orient Analyst)  

Observing the back up for this rebar price rise was also supported by strong manufacturing activity data released on Friday.

“The Caixin/Markit Manufacturing Purchasing Managers’ Index picking up to 6-month high.”  (Investing.com)

 

 

Safety checks

The potential impact of environmental and safety checks is dazzling a number of industries in the world’s second-biggest economy.

During the last week, China’s State Administration of Work Safety said it is going to carry out safety inspection in various industries.

Starting with coal, chemicals, moving to transportation, and finishing with construction inspections.

MEP announced the new round of inspections Starting in September. And will last till the end of March. The politically crucial Air quality targets.

Finishing, the steel production in smog-prone Beijing-Tianjin-Hebei region will be limited during winter. Military blocks in some cities, including top steel producer Tangshan. They have been ordered to cut capacity by as much as 50 percent in polluted days.

Meanwhile, the most-traded January iron ore contract on the Dalian Commodity Exchange rose nearly 1 percent to 583 yuan a tonne by 0307 GMT.

In conclusion, safety checks are to influence the market and shake all the participants.

 

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Report On Base Metals  01/09

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Global demand

Base metals demand is boosted up and supported by the Chinese economy data, PMI index rising to 51.6, from 51.1. This morning the prices were up average 0.1%.

 

Nickel prices were upside than down finishing with the 0.8% gain. Following with tin price up about 0.3%, while aluminium lifts up for 0.2%.

Copper price came off 0.1%, leveling $6,812 per tonne. Lead and Zinc were off 0.2%.
Trade average Volume  is with 6,588 lots as of 07:13 BST.

The Following results are coming after Thursday. When base metals closed at average 1.2% up. Zinc yesterday rose for 2.4%. Nickel and Al were up 1.6%… Tin was little changed…

 

Precious metals

Prices saw a slight volatility, with gold prices at $1,320 per oz. The palladium prices are off 0.2% at $933.50 per oz.

“This came after a day of strength on Thursday when the complex closed up an average of 0.8%, helped by a reversal in intraday dollar strength on benign inflation data. “ (Fast Markets)

 

SHFE

In The SHFE trade this morning, base metals are up across the board with average gains of 0.9%.

Nickel prices rose for 1.8%. Copper prices are lagging behind with a 0.2% gain to 52,740 yuan ($8,013) per tonne, as other metals play catch-up with it.

Changjiang spot copper prices are little changed at 52,540-52,680 yuan per tonne. While the London/Shanghai copper arb ratio is weaker at 7.74 (7.77).

Steel rebar prices on the SHFE are up a whopping 6.1%, while gold and silver prices are up by 0.7% and 0.2% respectively.

Iron ore prices, for January delivery, are up 4.5% at 584 yuan per tonne on the Dalian Commodity Exchange.

 

International markets

 

In international markets, speaking about Oil prices.. Spot Brent crude oil prices are off 0.2% at $52.64 per barrel. The yield on US ten-year treasuries has eased to 2.13%. Due to the German ten-year bund yield, which has fallen to 0.36%.

Indexes

Equities in Asia are for the most part slightly firmer this morning – both the Nikkei and the ASX 200 are up 0.2%. The Hang Seng is up 0.1%, and the CSI 300 little changed, while the Kospi is off 0.2%. In the USA, the Dow Jones closed up 0.25% at 21,948.10 on Thursday.

Euro Stoxx 50 closed up 0.52% at 3,421.47.

Observing the dollar index, it spike up to 93.35 on Thursday, before closing at 92.61, it was recently quoted at 92.77 as it consolidates ahead of today’s US employment report. The report is likely to spark a reaction from traders as they adjust their view on likely Fed monetary policy. A good report could make the market think the Fed will turn more hawkish again. This could give the dollar a lift and that could weigh on metal prices.

Currencies are recent movements are: The euro at 1.1883 is correcting some of its recent gains, the yen at 110.17 is consolidating, as are sterling at 1.2915 and the Australian dollar at 0.7935.

In emerging market currencies, the yuan is stronger at 6.5809 – another sign of confidence in the economy and for the most part the other currencies we follow are flat-to-firm. Although the peso is slightly weaker.

Finishing,

Aluminium and nickel prices have now joined copper prices in pushing the envelope on the upside and zinc prices are close to following.  Furthermore, lead and tin prices are still lagging behind. Good data out of China and a weak dollar are supporting the firmer tones in the base metals. The recent rallies are looking quite stretched, although there have been bouts of consolidation along the way.

A huge part of metal movement depends on dollar. If it avoids rebounding, then the high price levels will likely scale up selling. Then the upside movement is about to grow.

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Base Metals Market Review 31/08

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Top Things to know in market on Thursday

 

  • China plans safety inspections at coal mines
  • U.S. acts to finalize duties on imports of rebar from Taiwan
  • Zambia’s CEC to restore full power to Glencore’s Mopani Copper Mine
  • Brazil judge blocks decree opening Amazon area to mining
  • Vedanta Resources names ex-CEO Kaura as interim chief exec
  • South African iron ore, chrome producer Assore posts record profit due to higher prices

 

Base Metals 

This morning, Chinese PMI manufacturing data gave the results way better than expected. Those gave the support to the base metals market. It leveled at  51.7. Which is when compared with 51.4 previous and 51.3 expected, way better result.

 

Metal prices

The trade today was not so agitated, but as we observe the happenings.. The Zinc leads with 0.4% rise. Later comes copper with 0.3% rise. Pricing at $6,794 per tonne. Aluminium rose for 0.2%, while nickel was up for 0.1%.

Lead and Tin show the downwards movement, with lead lower for 0.3%, while tin is lower for 0.2%. The summary volume is average, with 6,267 lots.

Yesterday’s trade was generally weaker. It had the base metals complex close down by an average of 0.3%. It came after nickel price drop of 1%, and 0.8% fall in zinc prices.

Copper prices closed at $6,776 per tonne.

Tin had the gain of 1%, while aluminium prices changed a bit.

 

Precious metals

Generally, precious metal prices are lower, with gold, silver and platinum prices falling for 0.4% all. Gold spot price reached the price of $1,302.62. Palladium prices are 0.2% up, leveling $932.20.

Yesterday, the complex closed with 0.6% down.

SHFE

This morning in SHFE, Nickel and Zinc prices were off by 0.4% and 0.1%. Following, the tin and copper prices came at 52,800 yuan per tonne.

“Spot copper prices in Changjiang are up 0.2% at 52,250-52,700 yuan per tonne and the London/Shanghai copper arb ratio is weaker at 7.77. “

Steel rebar prices on the SHFE are up by 0.7%, gold and silver prices are off by 0.8% and 0.7%, respectively, while January 2018 iron ore prices on the Dalian Commodity Exchange have rebounded by 3.6% to 571.50 yuan per tonne.  (FastMarkets)

 

Currencies/Data/Indices

Finishing with international markets, the spot Brent crude oil prices are up 0.2%. They are now at $50.70 per barrel. And the yield on US ten-year treasuries is unchanged at 2.15%. German ten-year bund yield is firmer at 0.37%.

Observing equities this morning, gains are being seen on the Nikkei (0.72%). The ASX 200 (0.79%), while loses are being seen on the Hang Seng (-0.68%), the CSI 300 (-0.42%) and on the Kospi (-0.38%). In the USA. T

The Dow Jones closed up 0.12% at 21,892.43 on Wednesday, while in Europe, the Euro Stoxx 50 closed up 0.46% at 3,403.71. (Indexes data from Fast Markets)

 

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Grasberg Mine disputes & Valuation

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Country’s point of view

Indonesia explains who got the better outcome in deals for future of the Grasberg copper mine.

Freeport agreed to divest a 51 percent stake the world’s second-biggest copper mine.

Firstly, right after the deals were concluded, Indonesia’s Energy and Finance Ministries posted on social media #FreeportTaatIndo

nesiaBerdaulat. Meaning “Freeport is submissive, Indonesia is a sovereign state”.

This grandiloquent statement explains Indonesian view of the subject. The country claims that dispute over Freeport was all about outflowing the country’s rights about mineral resources

Secondly, Indonesia feels it has a legit victory over this dispute pointing at nationalist sentiment. But having a further look at the matter, it is highly possible that additional “fights” with Freeport will take their place.

“The Phoenix, Arizona-based company explains it will divest 51 percent of PT Freeport Indonesia (PT-FI) and build a second smelter at Grasberg, in the eastern province of Papua.  And will also commit to invest up to $20 billion in the mine. “ (Reuters)

 

Freeport’s Angle

Following, Freeport can immediately apply for a decade of further operations. Beginning in 2021, potentially lasting till 2041. Paying tax & royalty rates during that term.

“While there are a lot of issues still to be worked on, politically this is a win for the government.” (Analyst at Jakarta-based Concord Consultin)

“It has taken on a big U.S. firm and appears to have won.” (Reuters)

Going through the Last year, Freeport offered a 10.64 percent stake in PT-FI. These values the mine at $16.2 billion while the government counter-offered at $630 million.

Freeport assumes that any Grasberg valuation should include the mineral resource. On the other hand Indonesia stays clear about the attitude that resource is essentially held by the country. Certainly not by the mine operator.

“There’s more reserves there than up to 2041 – these aren’t theirs.” (Indonesia’s Energy Minister.)

Freeport has to sell 41.64 percent of PT-FI to reach the divestment target. Adding to a 9.36 percent share the government already holds.

 

Future

Indonesia hopes that the divestment would be made in one block rather than spread out and would be completed by the end of 2018.

While the company will be appointed to calculate the divestment valuation.

As Fajar Hari Sampurno said, the government is forming a consortium involving the central government and regional administrations to purchase the stake.

“The consortium will look for funding sources – it could be from equity, loans, obligations (or) pension funds.” (Reuters)

Under the law of Indonesia, the central government would have the first claim to the PT-FI stake. Followed by the country’s regional governments. State-owned enterprise or regional government enterprises would be next in line followed by private companies or a public offering for the stake.

Richard Adkerson (FP CEO)  said on Tuesday that “PT-FI shares are what we’re talking about with divestment.” And that after 2022 “PT-FI will retain its 60 percent interest in the joint venture.”

Shares of Freeport, the world’s biggest publicly listed copper miner, have dropped 6.3 percent in the two days since the announcement, closing at $14.56 on Wednesday. 

Further agitation will show the real outcomes. It is up to the Country’s decisions and aims to keep the mineral resources. It certainly is better if energy stays controlled by official organs.

 

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Hurricane in Gulf Coast damaging Gasoline & Oil Markets

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Hurricane Harvey

During the weekend a huge hurricane hit U.S. Gulf coast!

It crippled Houston and flooded the Texas area. The port in Houston is damaged really serious and it knocked down the crude production in numerous refineries along the shore.

Gasoline prices hit two-year highs, influenced by massive floods caused by the storm. It forced U.S. Gulf Coast to ship orders from across the sea.

 

Oil market

Observing crude markets, U.S. futures fell. Later, U.S. refinery shutdowns could cause the reduced demand for American crude.

Brent futures also eased.

The Harvey hurricane killed at least 2 people, and it is the strongest hurricane in last half a century. It caused a Houston port closure, while it shut down numeros refineries.

“The U.S. National Hurricane Center (NHC) said on Monday that Harvey was moving away from the coast but was expected to linger close to the shore through Tuesday.”

“The floods would spread from Texas eastward to Louisiana.”

 

Oil refining in Texas 

Oil refining in Texas composes of 5.6 million barrels of refining capacity daily. Louisiana has 3.3 million barrels. The storm shut down over 2 million bpd.

“Spot prices for U.S. gasoline futures surged 7 percent to a peak of $1.7799 per gallon, the highest level since late July 2015, before easing to $1.7281 by 0703 GMT.” (Reuters)

To replace the lost outputs, and in order to avoid fuel shortage, U.S. traders were shipping cargoes from North Asia.

 

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Electric Cars market boosting the demand for base metals

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Intro

Logical level up, but also very important fact to be aware of: Electric vehicles market is boosting growth, the new technologies are entering the big door everywhere.

Firstly, the use of batteries is pushing base metals demand from across the sea. South32, australian-based miner buoyed by an 8-fold leap in annual profit. 

Secondly, mining and metal producing companies are very inspired with current situation. Their profits are doubtlessly rising.

 

South 32’s position

Following, South 32 is a base metal and coal mining company. It has wide exposure to aluminium and nickel. Now, their Cannington mine in Australia enters the list of world’s largest sources of nickel, silver and lead.

“If you look at the metals we produce, they are either used in renewables or battery technology.” (South32 CEO)

“We are looking to add more base metals exposure to the group… We do see battery technology having an impact over time.”

Company’s profit

“South32 posted fiscal 2017 underlying profit of $1.15 billion, up from $138 million the previous year.” (Source – Reuters)

 

Glencore’s position 

Thirdly, Glencore CEO Ivan Glasenberg also frequently said that the coming large-scale usage of electric vehicles and energy storage systems will definitely unlock consequential new sources of demand for copper, cobalt, zinc and nickel.

This electric vehicles phenomena is influencing the world’s largest miner BHP to invest heavily in its nickel business.

“While South32 was prepared to supply a host of metals used in making batteries for electric vehicles and other systems, it sees overcapacity in lithium, the driving component of the burgeoning lithium-ion battery technology.” (Reuters)

By Morgan Stanley’s forecast the use of electric cars is going to rise to the immense number of 99 million new vehicles in 2020! 

 

Consequences and market Influence

Having in mind that the electric vehicles are our close future.. and that the environmental development depends on this… We should be aware that the consequences of these changes will push the demand for the base metals up, and in case nothing serious changes in world’s macroeconomic movements in recent months/years; the nickel, zinc and lead traders will witness very bright outcomes.

In conclusion, as South32’s promise explains:

“Our purpose is to make a difference by developing natural resources. Improving people’s lives now and for generations to come. Owners trust us and partners realise the potential of their resources.”

For further info on this subject visit: https://www.south32.net

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Base Metal Markets – August the 23rd

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Wednesday, the 23rd of august – Top 5 things to be aware of:

  1. Trump’s policy focusing on different fronts
  2. Worldwide manufacturing data shows resilience; U.S. in focus
  3. Mario Draghi avoids policy indication ahead of Jackson Hole
  4. Risk interested wavers standing in front of Central Bankers
  5. Oil prices trading lower

 

Volatility of Metals

Metal prices are following some very inspiring movement these days. The early morning trade on LME today went this way:  

We are speaking about morning trade:

This comes after yesterday’s split performance.

When lead led the gains with a 3.2% rally, nickel prices closed up 1% and copper closed up 0.2%. The rest were led lower by a 0.8% decline in tin prices. (Fast Markets data in numbers)

Speaking about precious metals, the prices are up across the board this morning by an average of 0.3%. Inspired by a 0.4% rise in silver prices, spot gold prices are up 0.2% at $1,285.86 per oz. This follows a down day on Tuesday when the complex closed off 0.6% on average, led by a 1% fall in palladium prices. (FM)

 

SHFE today 

Observing the morning trade on the SHFE, the base metals complex is for the most part weaker with prices off an average of 0.4%. Led by a 1.7% drop in tin prices, aluminium and zinc prices are off 1.1% and copper prices are off by 0.1%. 

 

Pointing at 51,570 yuan ($7,739) per tonne. 

Bucking the trend are lead and nickel prices, up by 1.5% and 0.1%, respectively.

Other metals in China are showing some down movement. SHFE rebar prices are down 4.9% and iron ore prices on the Dalian Commodity exchange are down 3.7% at 580 yuan per tonne on the January 2018 contract. The gold and silver prices on SHFE are both down 0.4%.

 

International Markets

In international markets, spot Brent crude oil prices are up by 0.2% at $51.71 per barrel. The income on US ten-year treasuries is firmer at 2.21%, and the German ten-year bund yield is at 0.40%

 

Indexes 

In the end, observing the Indexes and their market movement:

Firstly, the Hang Seng Index is up (+0.9%), the Nikkei (+0.2%), the CSI 300 (0.1%). All of these are higher, while the ASX 200 is off 0.3% and the Kospi is off 0.1%. In the USA, the Dow Jones closed up 0.9% at 21,799.89 and in Europe, the Euro Stoxx 50 closed up 0.94% at 3,455.59.

(Exact Numbers in the Article coming from the Fast Markets.)

 

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New Mining deals: Indonesian government & PT Freeport Indonesia

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Intro

Indonesian Energy Minister announced on Tuesday that Indonesia highly expects to conclude the deals with Freeport McMoRan Inc. About operating in one of their biggest copper mines in Papua. The cooperation should take place in the upcoming decades.

The country’s mining and energy minister announced these ideas.

Speaking about the U.S. deals with Indonesia, the country’s mining giant was in a slight quarrel with Indonesia over the rights at Grasberg mine. This dispute is making huge costs for both sides, and these are estimated at hundreds of millions of dollars.

When reporters asked Minister Ignasius Jonan about the status of current deals & negotiations, he said:

“I expect to have a conclusion this month!” (Jonan says for Reuters) 

 

Mining Permits 

In July this year, Richard Adkerson (FPT CEO) said he for sure expects to conclude this special mining permit before October this year.

“Jonan said, when they finalize the agreement,  and allow Freeport all the needed permits.. They could apply for two 10-year permit extensions to mine at Grasberg beyond 2021.” (Reuters)

Regarding the new rules in Indonesia: Miners have to divest 51% stake, pay taxes and royalties. And in the end they have to relinquish arbitration rights. Freeport insists on all participants to follow these rules.

Reporters asked Mr Jonan did Freeport accepted these 51% divestment, and he said:

“Well if they don’t, they can go. We don’t negotiate that.” (Jonan for Reuters)

 

Real Inside Relations

With the beginning of current year Freeport said talks are in blind alley, and reminded they could do lots of damage for both sides. Then The government explained that they could solve this subject even in court if necessary.

“We will listen. We will accommodate as much as we can, but we cannot accommodate something that is clearly written in the law.” (Jonan for Reuters)

Clearly he wanted to emphasize their willingness to cooperate, but only in the possibilities of legal deals.

Riza Pratama (FT spokesman) said the negotiations with the government are ongoing. And they will soon be concluded clearly if both sides respect the main point.

“(The) four issues in the negotiations are one package deal. Divestment is one of the four issues.”

Real effects

Is he concerned that these happenings could result with some agitated movement inside Papua mine… Pratama says: “I don’t think so … it’s an internal labor issue inside Freeport’s operations.”

 

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