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Commodities News

Up-to-date news on raw materials


FT Mercati provides subscribers with a dedicated commodities news bulletin to stay up-to-date.
Here is a selection of the latest news:

9/6/2024

INDONESIA - ERAMET INDONESIA REMAINS BULLISH ON NICKEL DESPITE PROJECT CANCELLATION

Indonesian nickel can be green and profitable, despite criticism over weak environmental standards, Eramet Indonesia's President Director Jerome Baudelet said at the at the Fastmarkets' International Critical Minerals and Metals Summit in Bali, Indonesia on Thursday September 5.
German chemical producer BASF announced on June 24 that it will exit a $2.6 billion investment in a nickel-cobalt refining project in Weda Bay, Indonesia due to significant changes in the nickel market like a near-term oversupply in the nickel market since the inception of the project.
Market participants believed the project, which was first agreed in 2020, was a victim of low nickel prices, partly caused by a massive increase in Indonesian supply, sources said.
“Investors were not satisfied with the nickel price level, so BASF pulled out of the deal. But that doesn’t change Eramet’s appetite to develop further nickel projects in Indonesia. We are looking at partnerships with EV producers in Europe [like] forming consortiums,” Baudelet said.
Baudelet also outlined the challenges that Eramet had observed in other nickel mining jurisdictions, such as New Caledonia, which has contributed to his confidence and optimism toward nickel production in Indonesia.
While Indonesian nickel is recognized for its competitive cost structure, sustainability in the country's nickel industry needs to be addressed, sources said.
“To produce nickel for stainless steel you need ferronickel or NPI...If you are using pyrometallurgy then good luck getting below 20 tonnes of CO2 per tonne of nickel, because you’re going to find it very difficult,” he said. “The only way you can reduce the carbon footprint of NPI or ferronickel is by increasing the ratio of scrap nickel used but that’s not so easy, especially in China,” Baudelet said.

9/6/2024

LME ZINC PRICE DROPS 2.1% ON OZERNOYE MINE NEWS

The London Metal Exchange zinc price posted the biggest decline among the base metals complex at the 5pm close on Thursday September 5, while other prices moved in mixed directions.
Three-month future prices at 5pm on Thursday, compared with the previous day’s 5pm close:
- Copper: $9,092 per tonne, up 1.5%
- Aluminium: $2,378.50 per tonne, down 0.8%
- Nickel: $16,078 per tonne, down 0.8%
- Zinc: $2,737.50 per tonne, down 2.1%
- Lead: $1,995 per tonne, down 1.2%
- Tin: $30,771 per tonne, up 0.9%
The three-month zinc price fell by over 2% at Thursday’s close, following news of some potential easing to the recent tightness in raw material supply.
Ozernoye mine, a major Russian zinc project, announced that it had launched concentrate production in a statement on Wednesday.
“Ozernoye aims to reach full-scale production of 6 million tons of ore by 2025, with a zinc concentrate output of up to 600,000 tons containing 53% zinc and a lead concentrate output of up to 82,000 tons containing 50% lead,” Marex analyst Al Munro said on Thursday.
The zinc concentrate market has been incredibly tight in recent months leading to record low treatment charges.
Fastmarkets’ twice-monthly assessment of the zinc spot concentrate TC, cif China was $(50)-(20) per tonne on Friday, the lowest since the assessment was launched in September 2014 and down from $(40)-(10) per tonne on August 9.
Elsewhere, the three-month copper contract was up by 1.5% after over 22,500 lots had traded by 5.20pm, bucking the downward trend seen across most of the complex.
A slight easing in the US dollar index had removed some of the recent pressure on the red metal’s price. The dollar index dropped to a low of 100.96, its lowest level since August 29.
But the uncertain economic outlook continued to weigh on sentiment somewhat.
“Manufacturing activity [in China] remains subdued with the recent purchasing manufacturers index recording its fourth consecutive month in contractionary territory,” Daniel Hynes, senior commodity strategist at ANZ, said.
“However, after rising strongly in July, inventories at Shanghai [Futures] Exchange warehouses have started to fall. The market remains concerned that Beijing will fail to address the slowdown with any further stimulus measures,” he added.

9/6/2024

COPPER PRICES FIRM - Saxo Bank

Concerns about China’s economy deepened on Wednesday when data showed growth in its services sector activity slowed in August after previous downbeat numbers from the manufacturing and property sectors.
Copper prices steadied on Wednesday after touching a three-week low, but the modest gains were capped by worries about the prospect of weaker global economic growth dampening demand for industrial metals.
Buying by industrial users helped bolster prices on the LME, but US Comex copper futures slipped. Metals joined sliding oil and equity markets in the wake of weak US factory data on Wednesday and recent lacklustre data from top metals consumer China.
“The mood in the market is most certainly challenged,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. “Risk sentiment has taken a setback with the renewed weakness in the stock market, but the economic growth outlook is also not looking great, and that’s impacting the demand outlook for metals.”
Widely expected rate cuts by the Federal Reserve in September and the rest of this year could stabilise the markets, analysts said. “The real kicker right now is whether this weakness is going to be prolonged or whether it’s going to be arrested by upcoming rate cuts,” Hansen said.

9/6/2024

BASKET OPEC PRELIMINARY PRICE

OPECNA, the news agency of OPEC, announced the OPEC Basket preliminary price
05 september = $ 73.68 /b (up from previous daily value)
(The OPEC Reference Basket (ORB) introduced on 16 June 2005, is currently made up of the following: Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia , UAE and Venezuela.

9/6/2024

YUNNAN TIN STARTS 45-DAY MAINTENANCE WORKS ON GEJIU SMELTER AMID SEASONAL LULL

Yunnan Tin Co (YTC), the largest tin producer in China, began annual maintenance at its Gejiu smelter, from August 25 for a period of up to 45 days.
The Gejiu unit has production capacity of around 5,000-6,000 tonnes per month.
It is not uncommon for producers to conduct routine maintenance works at their plants around August because of the seasonal lull in tin demand amid the summer holidays, according to market participants.
But it is largely believed that no other producers are conducting maintenance works at their smelters at present, in order to stagger maintenance schedules and ensure a healthy supply of tin in the market. This is in light of the fact that refined tin production in China will likely decrease considerably during YTC’s scheduled maintenance.
Going into September, most market participants do not expect tin market fundamentals to change significantly. One market participant expects demand to only improve in October, ahead of the end-of-year holiday period.
This is in line with the expected restart date of YTC’s Gejiu smelter.

9/6/2024

TCS REACH NEW LOWS DESPITE EXPECTED PRODUCTION CUTS FROM CHINESE SMELTERS

Spot treatment charges (TCs) for imported zinc concentrate shipped into China fell previous week, reaching a new record low since the assessment was launched in September 2014.
Spot liquidity remained thin, with traders reporting limited cargoes to offer. All Chinese smelters are operating at a production capacity far below the initial guidance due to financial losses.
“I heard that a smelter in Northwest Shaanxi province, which produces about 200,000 tonnes of refined zinc per year, reduced its output to about 5,000 tonnes a month,” a trader based in Shanghai said.
Some smelters extended the time for care and maintenance from 1.5-2.0 months in comparison to about 20-30 days last year.
Although the China Zinc Smeltery Purchase Team (CZSPT) discussed possible production cuts for the rest of this year among major smelters, which could reduce concentrate demand, TCs continued to fall due to extreme shortages of spot material.
As the fourth quarter approaches, restocking for production during winter remained the biggest concern among market participants.
Concentrate supplies are expected to be tighter, with most domestic mines in Northern China shutting down due to colder weather in the winter, sources told.
China’s domestic TCs continued to decrease in line with the import market as smelters competed for concentrate amid supply tightness of the raw material.
A trader said that TCs delivered to smelters in some Southern Chinese provinces have even dropped to three digits, for example, 800 yuan [per tonne], and this is insane… TCs at such a level mean that a smelter is losing over 3,000 yuan for producing one tonne of zinc.