Oil prices rise, as OPEC’s decision is getting closer

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Tuesday’s Oil prices were a bit volatile, but now Oil rose again on expectations of OPEC’s output cuts extension. As Thursday is nearing, the OPEC meeting is giving a support to global oil prices. There were some losses earlier today in the session. After White House said it would sell off half of the country’s oil stockpile. But as it turned out, this intentions were not strong enough to impact the oil price seriously.

Brent crude LCOc1 traded up 7 cents at $53.94 per barrel at 1348 GMT (9:48 a.m. ET), after a low of $53.20.

U.S. light crude CLc1 was up 10 cents at $51.23.

The OPEC countries, onwards with Saudi Arabia, and other producers including Russia will meet on May 25. They are going to extend a pledge to cut output by 1.8 million barrels per day (bpd). The cuts might possibly go even deeper. And they will last at least until March 2018.

The cuts were initially agreed to last six months until the end of June. But as discussed later, it is decided that Oil market would gain better back up if the prolonged cuts last 9 months.

 

Kuwait

Essam al-Marzouq, Oil Ministed of Kuwait said today that not all OPEC countries and its allies supported a nine-month extension. So the producers would discuss this week precisely whether to extend output cuts by a six or nine months.

There are many sources which say that they predict a smooth meeting with a nine-month extension likely to be agreed.

“OPEC meets on Thursday amid increasing optimism that the production cuts agreed last November will be rolled over and most likely to the end of 1Q18,” Colin Smith, analyst at Panmure, said in a note on Tuesday, adding he expected a rollover would “likely deliver a significant tightening of the market.” (Reuters)

 

Early trade today

Earlier today, oil prices declined a bit, on the White House plan to sell off half of the nation’s 688 million-barrel oil stockpile.

The budget, to be delivered to Congress on Tuesday, is only a proposal. So it will not take the real effect in its current form.

“Congress needs to agree to this which is rather uncertain,” said Carsten Fritsch, commodity analyst at Commerzbank. (Reuters)

 

Allies in OPEC deals

 

Carlos Perez, Ecuador Oil Minister said OPEC and other oil-producing countries are going to discuss a six- or nine-month extension to output cuts and probably choose the latter.

“Six and nine months are both proposals on the table … we will support the majority, probably the nine months.” Perez told reporters after arriving in Vienna today.

When asked whether deeper cuts would be discussed, he said: “Not at this point, I don’t think so.”

Noureddine Boutarfa, energy minister of OPEC member Algeria, said OPEC was discussing a possible nine-month extension, with curbs kept at the same level as under the group’s existing deal.

“Right now we are talking about nine months,” Boutarfa said.

Khalid al-Falih also arrived in Vienna on today, but didn’t want to comment to reporters.

There were some comments among delegates that they do not expect major surprises. Everything is pretty clear so far.

April Copper imports in China: Fall of 41% due to tighter financial regulation

May 23rd; Main events in financial market:

  • Sterling slips after deadly Manchester terror attack
  • Global stocks mixed in cautions trade
  • Oil price oscillates as OPEC meeting draws closer
  • Euro zone business activity rises at fastest pace since 2011
  • Bitcoin keeps growing; tops $2,200

For further info on these subjects, visit: www.investing.com

 

The monthly analysis

Firstly, if compared to a period of year ago, China’s refined copper imports fell by 41%. This shows that traders buying power was affected by strained access to credit.

The China’s imports of refined copper fell down to 202,645 tonnes previous month. It is the lowest level seen since February. And compared to March levels, it sees the 18 % down.

Observing the January – April period, China’s refined copper imports have slumped. Coming to the lower levels of 31 percent compared to the last year. Those were impacted partly byChina’s credits & because short-term interest rates and banks became more reluctant to lend.

“In general, metals traders have been suffering from rising financing costs, fierce competition and a slowing economy.” Said JP Morgan in a report.

 

Chinese banks & credits

“While Chinese banks have anecdotally been maintaining existing credit lines for metals-based companies, it has become increasingly hard to get approval for new lines of credit.” (Reuters)

China’s top leadership and their officials have set list of priorities in country’s economy, aimed for this year. The main priority is indentifying the containment of financial risks and asset bubbles. Due to this, China has elevated the short-term interest rates.

It continued with imports of more copper scrap. Those imports were up in the first four months of the year, for 18 percent. That happened after the surge in prices of late last year encouraged and gave a support to a flood of scrap metal back into the market.

 

Concentrate imports

Observing the copper concentrate imports: They continued to grow, even in April. When compared to a period of year ago, they were up 7.7 percent. And they are in line with the year’s trend.

The slight decline in production happened in Chile, caused by a strike earlier this year. But this was more than offset by almost 60 percent jump in imports from Peru. Which than compensated the amounts, and brought a certain balance to the market. However, China’s imports went way lower.

China’s exports of refined copper fell in April from the same month year earlier. But on the other side, they are now at nearly 125,000 tonnes . Which is up 65 percent if observed year to date.

Copper is one of the most ”popular” amid base metals and their trade. China has definitely set a list of priorities in order to stabilize the market. And precisely wants to see if the parts of financial regulation are doing fine with the market aims. What is the key which will connect all the market participants, and bring the balance to country’s imports, exports, trades, production, and all the accompanying businesses, the time will soon show.

 

 

One-fifth of Mongolia to be opened for digging

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Mining industry executives expect new mining boom in Mongolia. It is going to start very soon. It will open about 21% of country’s territory. Which is more than one-fifth, in order to explore its mining potential.

Mongolia goes through financial IMF-led bailout. And it currently removed the main obstacle of $5.5 million which was affecting its economy. It was a Mongolian banking law, that had required big companies to refer their sales revenues from foreign investments through Mongolian banks. Later it made a proposal to explore wider area of Mongolian territory.

 

Reforms

 

Reform, followed by further steps, all in order to open the mining sector, would definitely see the industry & investment grow.

“It is an important thing for Mongolia as a whole. I think the reaction and the commitment you are seeing from the Mongolian government over the last two weeks to repeal this tax, it shows its firm commitment to really get the foreign investments going and particularly that is very much settled on the mineral exploration and the mining industry in Mongolia.” Andrew Stewart, CEO of Xanadu Mines said.

By some CNBC reports, Stewart also spoke about Xanadu’s flagship Kharmagtai project. Its location is 120km south of Oyu Tolgoi. And it demonstrates that Mongolia offers increasingly favorable odds for discovering significant copper and gold deposits. When compared to mature mining jurisdictions, for example Canada & Australia.

IMF data shows that the economy only grew 1 percent in 2016 from 2.4 percent in 2015.

 

Numbers

By exploration, and Mongolian government efforts given in the mining potential, the country can meliorate its economy. Rise its GDP and of course the economic security which follows. Dashdorj was said to have remarked that the landlocked country bordering China and Russia and among the top 20 countries by landmass needs to take the step to resolve economic woes that go back several years.

Encouraging exploration is crucial for the healthy mining industry. When government gives the effort in structural changes in the industry there exists a great platform on which country can establish its capacities.

 

Mongolia’s growth in 2H17 and 2018

Mongolia’s growth will definitely accelerate this year. Supported by these huge mining investments. Info are coming from Asian Development Bank and its 2017 Outlook report. The forecast says growth will accelerate 2.5% this year, but will be around 2% in 2018. Followed by the base effect of upsurge in coal production in 2017.

This is based on the assumption that investment in the second phase of Oyu Tolgoi mine will rise from $200 million last year to $1 billion in 2017 and $1.2 billion in 2018.

While Oyu Tolgoi is Mongolia’s highest profile mining operation, the country plays host to a number of the copper, gold and coal mines.

Mongolia is a country richly provided with mineral resources.  The Erdenet Copper Mine has been operating for several decades and the indications are that there is still a number of decades of mine life to come.

 

Base Metals & New electric vehicles

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Further production of Electric vehicles will rise demand for base metals

Electric vehicle market will to boost for 13.7% of global car sales in 2025. This means that copper, aluminium and nickel could highly benefit on these movements.

If we estimate a situation in which 100% of the world’s vehicles were electric, this would impact a copper demand growth of 21%. (Compared to a current growth). Later, the aluminium demand would rise by 13%. While Nickel would see incredible boost of demand for INCREDIBLE 118 % ! Rare metals, such as , lithium, cobalt and graphite would also face a rising demand.

”These figures were based on findings by analysts who physically took apart an entry-level Chevrolet Bolt to see what it contained. ” (Metal Bulletin)

There were comments on how aluminium demand would also rise.

Due to the electrical infrastructure required to fuel the vehicles. These facts were not explained to the fullest.
In 100% electric vehicles scenario, platinum group metals were forecast to see a 53% drop in demand. Steel would see a marginal decline in demand in the context of the global steel market.

“We are more convinced than ever that electric cars will reach the tipping point in the penetration curve in the next few years.”

“This new generation of electric cars has far-reaching implications. For not only the global auto industry but also for many other sectors, such as capital goods, chemicals, mining, technology and energy.” (UBS Research)

The new models of electric cars are going to enter the market soon. For example, the Tesla Model 3 is going to hit the market in upcoming years. UBS Research expects that 14.2 million electric vehicles will be sold in 2025.

 

 

Second successive month of strikes in Grasberg copper mine

Numbers of workers at Grasberg mine, from the workers union decided to go on a second-month strikes. It is the 2nd consecutive month. Because the strikes started in May, and it was expected that they would be one-month long.

“Yes, the strike will go on for a second month.” union representative Tri Pusputal said on Monday May 22.
Freeport is frequently operating under a temporary export permit. To ship copper concentrates out of Grasberg. It is in the Indonesian territory of West Papua, after the government lifted an export ban in April.

The Freeport has been able to ship material to key customers in Japan, South Korea, India and China. But despite that, production at the mine has been affected over the past month by the May strike.

There is another obstacle in Freeport’s production in Indonesia. The company delayed 86,000 tonnes of contained copper.

And also reported that red metal sales coming straight from the mine were down. In percentage, for almost 28% in the first quarter of 2017. Due to this ban.

Grasberg is the world’s second largest copper mine by production. Mining 680,000 tonnes of copper in concentrate during the course of 2016. It is also the second largest for gold – producing 42.3 tonnes in 2015.

The extension of Grasberg mine strike could affect further production and further gains in copper concentrate TC/RCs.

Which confirmed to a three-month high of $80.5 per tonne/8.05 cents per pound. (According to the Metal Bulletin reports)

When asked to comment, the Freeport was not available.

OPEC, hedge funds and the Sistine Chapel

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The most important Events in the Market Today:

  1. Oil is extending rally as investors wait for OPEC meeting on Thursday
  2. Global stocks mostly higher as markets recover poise
  3. Dollar creeps up off 6-month lows
  4. British pound slides as U.K. threatens to quit Brexit talks
  5. Bitcoin tops $2,100 for the first time!

For further info on these subjects, visit: www.investing.com

 

OPEC story

The story begins in the summer of 2016. Mohammad Barkindo had met Ed Morse in the Vatican’s Sistine Chapel.

It was unusual encounter which led to a later numerous important events.

The chat between two of them, at an energy industry event held in the Chapel, has caused OPEC to reshape the way of doing its businesses. It changed the way OPEC deals with hedge funds. And as well its influence in global oil market.

Barkindo, having had to deal with an oil price slump of that time, told Morse that OPEC aims to understand the way financial players worked in the oil markets.

“It was at the Vatican that we first discussed the idea of OPEC reaching out to the financial players in the oil markets.” (Barkindo)

“The world of oil has changed, including the fundamentals and its dynamics. And so must OPEC.”

He said Morse helped in organising a meet up for OPEC officials with hedge funds at the end of 2016.

“We went further to break the Berlin Wall with tight oil producers and met them in Houston in March.” (Barkindo said for Reuters)

 

Khalid al-Falih and his team

 

In different locations and meetings, Khalid al Falih and his team held discussions with hedge funds. They also met top trading houses Vitol and Litasco in Vienna in November, before the previous OPEC meeting. (According to some non-official news.)

Falih’s predecessor, Saudi oil minister Ali al-Naimi, often took advice from oil market consultants, but also often gave advice to hedge funds saying: “Leave the market alone”.

Now the situation has changed.

“As the market got increasingly financialised, the Saudis and others at OPEC understood and accepted it is not just driven by fundamentals and decided it was worth engaging with those who move the market short-term.” (Reuters)

 

Whatever it takes

Observing the past two months, Falih has couple times used the phrase by Mario Draghi, from his successful bid to defend the euro.

OPEC will do “whatever it takes”, to reduce the oil glut, says Falih.

Hedge funds bought firmly into the oil market late last year. When it became apparent OPEC is going to cut production. They have heavily sold those positions in recent weeks, stalling a recovery in oil prices near $50 a barrel.

“It is exceptionally important for producers to understand the behaviour of financial market players and what they think about future price trends.”

This time OPEC will definitely do whatever it takes to achieve the kind of equilibrium, and stability in global Oil market.

 

 

 

SHFE & Market today (May 22nd)

As a weaker dollar pushed investor appetite for commodities,  base metals prices on the SHFE went up during Asia morning trading today.


Firstly, the most-traded July copper contract on the Shanghai Futures Exchange rose 580 yuan ($84.30) or 1.3% to 45,880 yuan per tonne as of 03:30 BST. Secondly, over 250,000 lots of the contract have changed hands so far.

In the meantime, the three-month copper contract on the LME rose $29 to $5,676.50 per tonne.

“Commodity markets rallied across the board as the political turmoil in the USA reignited, sparking a weaker US dollar, which helped increase investor appetite in commodities.” (ANZ Research)

The dollar index fell as low as 97.08 last Friday. Which makes it the lowest since November 2016. The political uncertainties in the USA are questioning the US president Donald Trump’s planned infrastructure spending and tax cut plans.

Crude oil prices are also rising supported by the news that members of the Organisation of the Petroleum Exporting Countries will extend their supply cut into next year while also deepening the cuts.

 

Copper stocks in SHFE 

Observing the  deliverable copper stocks at Shanghai Futures Exchange: Approved warehouses rose 1,365 tonnes or 0.7% over last week to 196,358 tonnes as of Friday May 19. Meanwhile the SHFE-LME copper arbitrage remains at a loss – it was at close to $90 per tonne on Friday. Later, on Friday, total copper stocks at LME warehouses fell 3,700 tonnes, to 336,650 tonnes.

Other base metals higher 

When speaking about the SHFE contract, July aluminium contract rose 45 yuan or 0.3% to 14,075 yuan per tonne. Following, the SHFE July zinc price went up 905 yuan or 4.2% to 22,335 yuan per tonne.  Also, the SHFE June lead price climbed 400 yuan or 2.6% to 15,785 yuan per tonne. 

Paying attention to nickel prices, the SHFE September nickel contract gained 2,290 yuan to 78,310 yuan per tonne. Finishing with  the SHFE September tin price which moved up 3,140 yuan. In percentage that is 4.1%, to 147,190 yuan per tonne.

Currencies & data

The Brent crude oil spot price rose 0.6% to $54.11 per barrel as of 03:21 BST on Monday.
Currently, the dollar index rose 0.2% to 97.31 as of 03:20 BST. Observing the Shanghai Composite index, it stood at 3,100.59 recently. Which makes it about 0.32% up.

As of today’s data, those are mainly the European events in slight focus. First of all Europe’s Buba monthly report and then China’s CB leading index due later today. The Euro group meeting will also take place in Brussels later today.
The UK prime minister Theresa May is speaking.

The beginning of the weekly trading seems to have picked up a positive expectations and the upward trends. As for the base metals, for Oil also. Speaking about Important Economic Events today, it is pretty calm day. Nothing bombastic is not currently happening. Later during the day FOMC Members are speaking. Also the RBA Assist Gov Debelle speaks. Some data about RUB Retail Sales are already out. It reached the actual level of -0.4%, while the expected was -1.2%.

Japan Trade Balance fell to actual 482B, while the forecast was 521B.

 

Next Week Forecasts

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Important weekly events (Short Recollection)

Friday was a day when Oil futures came to a four week’s high. The prices scored a weekly rise of more than 5%. And most noteworthy the optimism on upcoming production cuts rose the positive expectations and market movement. The cuts will be extended to next 9 months. Starting from June 2017 and entering the March of 2018.

U.S. West Texas Intermediate crude leveled up for 98 cents. Counted in percentage that is around 2%. It reached a price of $50.33 at Friday’s close. Observing the period of last 4 weeks, this was the highest price.

Later, the U.S. benchmark rose for $2.49. Which makes it about 5% up weekly.

Meanwhile, ICE Futures Exchange in London saw the price of Brent Oil at $53.61 a barrel by the close. The daily peak was even higher, at %53.82. Which was the unseen level since April 19th.

London-traded Brent futures gained $2.77 on their price. If calculated in percentage, it is the exact 5.2% for the week.

The production cuts will be extended to the next 9 months. Rather than the 6 previously agreed. There are signs of their possible deepening, but it is still not sure. We will definitely know on Thursday.

The fuel rose for 6% on weekly basis. June heating oil also finished at $1.582 a gallon, which makes it 3.7 cents up for a unit.

 

The upcoming Week

The economic events taking place in the week ahead will be very significant for global economy. Traders will all focus on OPEC highly-anticipated meeting. Where the major producing countries will decide on extending the production cuts.

 

Chronology of daily economic events which will impact the market next week:

  1. OPEC Meeting

2.Fed FOMC Meeting Minutes

3.U.S. Revised 1st Quarter Growth Data

  1. U.K. First Quarter GDP – Second Estimate

5.Flash Euro Zone PMIs for May

 

Upcoming week in Numbers & Data

Also worth mentioning, The American Petroleum Institute is going to publish its weekly report on U.S. oil supplies on May 23rd.

On Wednesday, May the 24th, EIA will release the weekly report on data about Oil and Gas.

Later, Thursday meeting is definitely the most important event of the week. The upcoming FINAL decision of OPEC and non-OPEC oil producing countries, about prolonging the outputs. Taking place in Vienna.

Finishing with Friday the 26th, when Baker Hughes will show some weekly reports on U.S. shale drilling, and numbers which put up close the U.S. oil production.

Focus is set directly on Oil prices, and long-term Oil market stability, as an aim for global participants.

In conclusion, the upcoming week will be a bit tense, certainly agitated, interesting to observe, inspiring to comment on. And for sure challenging for all the main market participants. And all the traders and investors who hold their stakes in the market and are waiting for the concrete outcomes.

 

 

 

 

Extending Oil Cuts; Oil price soon peaking $60

Khalid al-Falih today said that Oil output cuts are definitely going to take its place till march 2018; Global Production cuts are going to recover Oil market in further 5 years. As it is planned. The aim of OPEC and non-OPEC allies is to curb the outputs and lift the Oil prices, in order to achieve rebalance in the ”healthiest” way. This way Oil inventories will be reduced, which leads producing countries closer to their goal:

 

“We believe that continuation with the same level of cuts, plus eventually adding one or two small producers … will be more than adequate to bring the five-year balance to where they need to be by the end of the first quarter 2018.” (Khalid al-Falih, Ryadh)

OPEC’s idea is to conduct the global oil inventories in next 5 years.

Non-OPEC Russia, and The OPEC countries along with the other producers originally made a deal to curb outputs by 1.8 million bpd. Starting January the first, and taking place at least next 6 months. Now is the 5th month of previously mentioned cuts, and the global aim is to rebalance the market by prolonging them.

 

Prices

Following the simple laws of economy, the oil prices have gained backup from curbed outputs.

In a meeting of Saudi Arabia and Russia previously this month, the two main producing countries agreed that these further cuts are going to be of a huge value for global Oil supply. Also, market sometimes needs a hand of help in order to function effectively.

The subject of deepening the Cuts was also mentioned. All of this in order to drain inventories and give some decent back up to the Oil prices.

For those familiar with the subject, it is clear that OPEC organization has huge power in its hands. And a long-time positive branding scale, which gives it credibility and possibility to conduct the Oil market movements.

 

 

ECB

The Economic Commission Board is the panel which precedes the May 25th and the main OPEC meeting. It serves for all the possible options to be discussed, and that way to bring the pre-final-decisions, for scheduled May 25th.

Sources say that the Exact amount of discussed deeper output cuts was not mentioned.  Some countries allies did not receive the news about the deeper cuts so likely. But it is actual subject which will be considered in a final meeting, and it also may impact the market.

OPEC is asking some other Oil producing countries to join the current deals. To enter the supply pact and together make the bigger impact on prices. Turkmenistan, Egypt, as well as the Ivory Coast agreed to attend the meeting on May 25th.

The conclusion is pretty clear. Oil output cuts are willy-nilly going to take place after the meeting. That way, global Oil prices are going to gain support and help the 5-year plans; aiming to rebalance the market.

 

 

A Brief summary of market movement this week:

 

Wednesday, May the 17th was the day when U.S. stocks felt the worst decline of 2017. The world’s top investors survived huge risks and have lost the amounts of money, due to reports that came out about President Trump, and the market movements which followed.

Observing the indexes, The Dow definitely had the worst story. Speaking of, it have lost 370 points, or 1.78%. While the NASDAQ ans S&P 500 also declined for more than 1,5%. The non so likable thing, is that the three most important U.S. indexes finished the week lower. In negative.

Gold futures 2% up

Meanwhile, investors have found their ”way out” of the bad Wednesday, relying on gold. And piling their money in safe assets.

Most noteworthy, the current political drama is happening in Washington. The President Trump’s bad branding which is forthcoming, put some doubts on his Politics, ideas and plans for the future steps.

Gold futures gained about 2% for the week. Which makes it the very best performance of this precious metal in 5 weeks.

 

Oil prices; real positive expectations

Speaking about the Oil prices, they were oscillating around 50$, gaining levels of 53.30 and a bit more, amid expectations that OPEC is going to extend the cuts. Crude futures followed the levels of 50$ at Friday’s close. The rising expectations  for OPEC to prolong the supply cuts is leading prices up. And it will have its greatest impact after May the 25th.

Noureddine Boutarfa  Algerian Energy Minister, said that all the ally OPEC and most non-OPEC countries support the output cuts. So they would likely impact the market, and push the OIl prices up.

 

 

Sterling hits highs  

 Thursday was the day when pound of sterling survived a mini crash against the dollar, falling to the level of $1.2888. This move was not so expected, because in fact it is not relied to any economic event. Or any important market data. But the dip in pound was very brief. As GBP/USD later recovered.

And reached the level above 1.30$. Which was definitely the highest since September. This impacted the markets, and the investors pockets, and later it showed that the UK retail sales went up more than expected in April.

 

The dollar drops

The U.S. dollar index fell by more than 0.70% on Friday.

The dollar shakes are the most important ones. Political drama happening in U.S. had affected the market during the week. It actually erased almost all the earnings brought by President Trump’s election. The economy is throwing a doubt on President Trumps ability to reform the policies. He promised to deliver the reforms on pro-growth economic agenda. Which is including deregulation in financial markets and the tax reform also.

 

The deficit of zinc concentrate affecting China’s industry; it will increase refined zinc imports

Refined zinc imports

Starting with this month, China has the plans to increase refined zinc imports. As vanishing global supplies have a big impact on the local zinc outputs; they aim to cover the deficit by boosting the refined zinc imports.

Observing the China’s refined zinc production, in April it came to the lowest levels in more than 2 years. It happened due to the end up of some major mines in Australia. As well as in Ireland; This closure of important mines suffocated the China’s concentrate supplies. Which were of huge value for China’s industry.

 

Mining and heavy industry

Most noteworthy, the China’s ‘war on pollution’ also impacted the outputs in a way it restrained them firmly. Beijing is giving a huge efforts in mining and heavy industry; aiming to clear its environment, and pay attention to the ecological aspect of its production.

This will inspire customers for refined zinc to search their supplies overseas. It will likely lead to Boosting international prices, which this week leveled the lowest points since November.

“It is starting to bite.”

“The tightness is pretty much upon us.” said an analyst from ANZ Research.

“We are looking for zinc to push back to $2,800 in the second half … The zinc market is set to stay tight over the short to medium term. This certainly should provide a bit of a reality check for the bears.”

According to market data, and some analysts opinions, the zinc market price is to go up in forthcoming period (short to medium term), providing some kind of a reality check in markets.

Imports of refined zinc, from China’s guaranteed zones, could afterwards be resold on the local market for a profit. This week’s price leveled to $45; near the strongest since January 2016. In January 2016 the country shipped in around 60,000 tonnes of refined metal.

– China brought in just 25,600 tonnes in March and total imports are down by two thirds this year. (Reuters)

Most market participants have yet been turning to local exchange stocks. SHFE zinc stock fell for 50% since February. To the amount about 100,00 tonnes; which makes them the lowest since February 2015.

 

‘War’ on pollution

In the meantime, ‘war on pollution’ is slowly driving into its fourth year. The idea of the concept is to attenuate the environmental damage caused by periods of glowing & fast economic growth in China. Which will likely affect the production of base metals.

– “The Chinese government is going to put a lot of pressure (on metals producers) to reform from an environmental perspective,” said the head of metals at a China commodity trade house. (Reuters)

“Definitely we are going to see companies with limited domestic availability of concentrate. We should see some opportunities for imports of refined metal,” he said, declining to be identified as he was not authorized to speak with media.

In conclusion, it is important for Beijing to focus on its ”environmental health” and the clear blue skies, but these concepts are firmly going to impact the base metals production. And as well, the base metal prices, and global supply. The forthcoming period, short to medium term will definitely bring the higher global prices for zinc, as China also plans to boost the refined zinc imports.

The long term results will come themselves, it is the time who will show.