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Precious Metals Take a Beating on Fed Worries

Posted on 31 October 2014 by VRS  |  Email |Print

Gold prices slid to the lowest level in nearly a month on Thursday and other precious metals fell sharply, as hawkish comments from the Federal Reserve and strong U.S. economic data indicated the central bank could raise interest rates sooner than expected.
Gold for December delivery, the most actively traded contract, closed down $26.30, or 2.2%, at $1,198.60 a troy ounce, on the Comex division of the New York Mercantile Exchange. It was the contract’s first settlement below $1,200 an ounce since Oct. 3. Silver fell to a 4½-year low, tracking gold lower………………………………………..Full Article: Source

Huh! Where did that copper market surplus go?: Andy Home

Posted on 31 October 2014 by VRS  |  Email |Print

“Who’s got all the copper?” was the headline question in my last column on the copper market at the end of September. The answer, according to the Wall Street Journal, is Red Kite, the specialist metals hedge fund set up by Michael Farmer, a man who was trading the copper market before many younger readers were born.
Well…maybe. But…maybe not. It’s always a bit tricky to say in the hall-of-mirrors that is the London Metal Exchange (LME). What is not in doubt is that someone has been exerting a vice-like grip on LME copper stocks for many, many weeks………………………………………..Full Article: Source

Southern Copper cuts view for 2015 copper output

Posted on 30 October 2014 by VRS  |  Email |Print

Global miner Southern Copper said on Wednesday that it was revising down its forecast for its copper output next year by 9.8 percent to 758,000 tonnes.
“This number is still under review. We will have, I believe, a better plan when we start 2015,” said Chief Financial Officer Raul Jacob in a conference call with investors following the company’ release of third-quarter results. The company, controlled by Grupo Mexico, will likely produce 658,000 tonnes of copper this year and 912,000 tonnes in 2016, Jacob said………………………………………..Full Article: Source

Nickel miners soar as commodity price stages turnaround

Posted on 30 October 2014 by VRS  |  Email |Print

ASX-listed nickel miners are soaring on the ASX today, as the commodity price stages a resurgence. Nickel prices had fallen more than 20% to below US$7 a pound, as stockpiles surged 45% to record levels, according to Bloomberg.
Investment bank Goldman Sachs is forecasting that China will cut its nickel pig iron output by around 70,000 tonnes a year, in an attempt to reduce pollution levels prior to the Asia-Pacific Economic Cooperation meeting that begins in Beijing on November 10………………………………………..Full Article: Source

U.S. Bank: Any Macroeconomic Improvement Should Boost Base Metals

Posted on 30 October 2014 by VRS  |  Email |Print

Improvement in the global macroeconomic picture is likely to help base metals, particularly since there is some supply tightness, says U.S. Bank Wealth Management. The firm notes that improved economic news for China helped copper prices rebound 1% for the last week, returning prices above the key $3-per-pound level.
Nickel, meanwhile, lost more than 4%, with the metal retracing most of its year-to-date gains as stockpiles have risen in Asia despite the Indonesian export ban. “On balance, this left the industrial metals complex unchanged for the week,” the firm says………………………………………..Full Article: Source

Why bearishness on copper looks extreme

Posted on 29 October 2014 by VRS  |  Email |Print

With safety issues increasing the likelihood of a work stoppage at Freeport McMoran Copper & Gold Inc.’s Grasberg project in Indonesia, coupled with a strike set to begin Nov. 10 at the Antamina mine in Peru, the probability of a deficit in the copper market has significantly risen.
Estimates suggest that these two labour disruptions could remove 84,000 tonnes of mined copper supply through the end of 2014. Prices for the base metal have declined approximately 9% so far this year as traders anticipated a market surplus, but Dundee Capital Markets mining analyst David Charles pointed out that this excess metal has yet to materialize………………………………………..Full Article: Source

Why China blurs the global aluminium picture

Posted on 28 October 2014 by VRS  |  Email |Print

Is the world aluminium market in a supply-demand deficit or surplus? It’s a simple enough question but an extraordinarily difficult one to answer. That much was clear at last week’s LME Seminar. Two respected bank analysts, Citi’s David Wilson and Natixis’ Nic Brown, offered diametrically different views.
Deficit, according to Brown, and one that will steadily increase over the next two years. Surplus, according to Wilson, with no sign of deficit until 2017 at the earliest. Calculating supply-demand balances in any industrial metal is a tricky business, but the problems are compounded in aluminium………………………………………..Full Article: Source

A Copper-Bottomed Strategy?

Posted on 28 October 2014 by VRS  |  Email |Print

Talk about a strong market position: a single buyer has bought up over half of the copper held in London Metal Exchange warehouses, with its holding sometimes reaching over 90% of stocks in the last month, according to a story by the WSJ’s Sarah Kent, Ese Erheriene and Ira Iosebashvili.
The LME hasn’t made the buyer’s identity public but several traders and brokers suspect London-based hedge fund Red Kite Group, which has declined to comment. Why would anyone buy so much copper? One possibility is that whoever is behind the trade thinks copper prices are heading upwards due to a coming supply shortage………………………………………..Full Article: Source

Platinum and palladium price Fixing settled - now for gold

Posted on 27 October 2014 by VRS  |  Email |Print

It was announced a week ago by the London Platinum and Palladium Fixing Company Limited (LPPFCL) that the responsibility for administering a new electronic Fixing process for the two metals has been awarded to the now Hong Kong-owned London Metal Exchange (LME).
The LPPFCL had previously announced the setting up of a Request for Proposal (RFP) following a review of its Fixing process at the end of July. This was with the aim of appointing a third party to assume responsibility for the administration of the Fixing in place of the LPPFCL. The recent announcement was that the LME had been selected and has committed to become the new administrator of the Fixing process………………………………………..Full Article: Source

Here’s Why Copper Is Still So Strong

Posted on 27 October 2014 by VRS  |  Email |Print

Copper is supposed to be the commodity with a PhD. That is, copper has always been seen as so ubiquitous throughout the global economy that its moves, like the Aussie dollar’s, are often taken as a proxy for traders views on global growth.
So copper’s resilience above $3 a pound over the past 4 months has been a stand-out price performance which has had traders scratching their heads………………………………………..Full Article: Source

Factors Affecting Precious Metals

Posted on 23 October 2014 by VRS  |  Email |Print

Since the dawn of civilization, precious metals — especially Gold and Silver — have been recognized as stores of value and have been used as money for transaction purposes. Even today, in the presence of stocks, bonds and a number of alternate investment options, they are a very popular source of investment.
They neither yield dividends nor interest and they don’t convey an ownership interest in a firm or stock — in fact, they actually come with additional storage and safeguarding fees. But still, they are an important component of individual as well as institutional investors’ portfolios. Apart from acting as investment vehicles, gold and silver also have a strong jewelry market and are used for manufacturing purposes in some industries………………………………………..Full Article: Source

Nickel’s Slide Extends Roller-Coaster Ride

Posted on 23 October 2014 by VRS  |  Email |Print

Nickel prices have sunk to their lowest level since March, as slowing economies in Europe and China rattle investors, while a financing scandal in China has prompted companies to dump tons of nickel and other metals on the market.
The slide extends this year’s roller-coaster ride for traders in the metal, which is used to produce stainless and heat-resisting steel. Nickel futures have tumbled more than 20% since early September. That followed a monthslong rally, as a ban on nickel-ore shipments by No. 1 exporter Indonesia drove a 50% jump in prices from January to mid-May………………………………………..Full Article: Source

Copper hopes ‘bright despite volatility’

Posted on 23 October 2014 by VRS  |  Email |Print

Copper is set for a period of price volatility as the market digests new supply but long-term prospects remain bright due to grade declines and extended lead times for new projects, according to global miner Rio Tinto.
Sentiment toward the red metal, used extensively in construction and electrical applications, has turned increasingly bearish over the past year as new projects have come on stream and concerns about slowing growth in China have intensified………………………………………..Full Article: Source

Is This Crunch Time for Base Metals?

Posted on 22 October 2014 by VRS  |  Email |Print

Anyone investing in industrial metals needs to be patient. Copper, nickel, zinc and tin are likely to suffer low prices for some time yet, traders and analysts warn, though many are hopeful they’ll hit a floor soon. Demand has been dented by weakening global growth—not least concerns about a Chinese slowdown–which means metal consumption isn’t rising as fast as many had expected.
Traders are feeling particularly grim about copper. According to a survey of LME Week participants conducted by Macquarie Group Ltd, copper is the metal that people most want to bet against — the first time that’s been the case in six years. By contrast, traders are more optimistic about zinc, according to the survey………………………………………..Full Article: Source

Increase in copper price is unlikely, says analysts

Posted on 22 October 2014 by VRS  |  Email |Print

In the Metal Seminar conducted at the LME, Edward Meir, an analyst at INTL FC Stone, stated that, breaking out the earlier predicted supply glut, the demand for copper in the global market, will only rise to 150,000 tonnes, in the year of 2014.
A recheck on the outlook of global copper demand, by the International Copper Study Group, showed a lag of 270,000 over supply and demand, the same group, had earlier this year, forecasted a demand of 40,000 tonnes of copper in the global market………………………………………..Full Article: Source

India Steel output up by 2.5% in September,slight dip in Global output

Posted on 22 October 2014 by VRS  |  Email |Print

World crude steel production for the 65 countries reporting to the World Steel Association (worldsteel) was 134 million tonnes (Mt) in September 2014, a slight decrease of -0.1% compared to September 2013. India produced 6.8 Mt of crude steel, an increase of 2.5% compared to the same month 2013.
China’s crude steel production for September 2014 was 67.5 Mt, the same compared to September 2013. Elsewhere in Asia, Japan produced 9.2 Mt of crude steel in September 2014, a decrease of -0.5% compared to September 2013. South Korea produced 5.7 Mt of crude steel in September 2014, up by 10.1% on September 2013………………………………………..Full Article: Source

Refined lead market to show ‘modest’ deficit in 2014, 2015: ILZSG

Posted on 21 October 2014 by VRS  |  Email |Print

Global demand for refined lead metal will continue to exceed supply by a modest amount in both 2014 and 2015, the International Lead and Zinc Study Group said Monday, forecasting a deficit of 38,000 mt this year and 23,000 mt in 2015.
Global demand for refined lead metal is forecast to rise by 1.4% to 11.33 million mt this year and by a further 2.1% to 11.56 million mt in 2015, the ILZSG said. “In China, despite a further increase in automotive output and an expansion in the construction of mobile phone base stations that require industrial lead-acid batteries for back-up power, demand growth is expected to slow to 2.5% in 2014 and 2.9% in 2015,” the group said in a statement………………………………………..Full Article: Source

Supply Deficit Unlikely To Help Copper

Posted on 21 October 2014 by VRS  |  Email |Print

The copper market may end up in deficit this year, but that won’t do much for the metal’s price, analysts said. Instead of an earlier predicted supply glut, the copper market will likely finish 2014 with a deficit of around 150,000 tons, said Edward Meir, an analyst at INTL FC Stone., in a presentation at the LME Metals Seminar in London.
That forecast jibes with the International Copper Study Group’s revised outlook, which foresees demand lagging supply by 270,000 tons. Earlier this year, the ICSG predicted a 400,000 ton surplus………………………………………..Full Article: Source

China metals demand seen up in 2015, copper at least 6%

Posted on 21 October 2014 by VRS  |  Email |Print

China’s consumption of refined copper is expected to rise at least 6% in 2015, roughly in line with this year, supported by new investment in power networks and demand from rail projects, analysts and industry executives said. An expected slowdown in new residential and commercial building projects, however, could see an easing in consumption growth for aluminium and nickel in the world’s top metals consumer.
Lead demand growth may also be trimmed by lower production of electric bicycles, while tin demand should be supported by chemicals and tin-coated steel plates makers………………………………………..Full Article: Source

Iron Ore Risks Extending Collpapse on Supplies: Moody’s

Posted on 21 October 2014 by VRS  |  Email |Print

The collapse in iron ore prices may have further to run as global supply increases and steel-demand growth slows, according to Moody’s Investors Service, which said it may reduce ratings on producers.
About 300 million metric tons of new and expanded supply will come on stream over the next few years, analysts including Carol Cowan said in an e-mailed report received today. Global steel-production growth in 2014 remains muted with China, the key driver of consumption, continuing to slow, Moody’s said………………………………………..Full Article: Source

Iron ore price has a good chance to decline further

Posted on 21 October 2014 by VRS  |  Email |Print

According to the analyst at USB, Daniel Morgan, the big fishes are trying to oversupply the market that the price of iron ore can further decline down to as low as possible. And they have a tendency to fill up the market as soon as the supply a tiny bit, so as to preserve the present structure of the market.
Followed by all this decline in price and oversupply, the Premier of Western Australia, stated that, it is to be noted that the both companies, Rio Tinto as well as BHP Billiton are working together to decline the price of iron ore by glutting the market with over supply………………………………………..Full Article: Source

For Metals: The Prevailing Demand, Pricing Environment And Future Outlook

Posted on 21 October 2014 by VRS  |  Email |Print

This year has been characterized by extreme volatility in the prices of both precious metals as well as metals used in industry. Broadly, metals have been characterized by subdued pricing environments this year and this has been reflected in the stock prices of companies in the metals and mining space. In this article we will take a closer look at the reasons for the prevailing demand and pricing environments for various metals, as well as the outlook for demand and pricing going forward.
Steel: The principal consumers of steel products are the automotive, construction, appliance, machinery, equipment, infrastructure and transportation industries. The nature of business of these sectors is cyclical, with demand generally correlated with macroeconomic conditions. ……………………………………….Full Article: Source

Chile’s Cochilco sees copper surplus growing in 2015 as Chinese demand slows Caracas

Posted on 20 October 2014 by VRS  |  Email |Print

The global copper market will record larger surplus next year as demand in China, the world’s largest consumer of the metal, slows sharply, but prices will remain stable, the Chilean Copper Commission, or Cochilco, said Friday.
Sergio Hernandez, the head of Cochilco, said the commission expects a surplus of 125,000 mt this year and 429,000 mt in 2015 as new mine capacity comes on stream in Chile, Peru, Mexico, the US and Zambia. Meanwhile, Chinese demand is expected to rise 4.5% next year to 11.2 million mt, or 47% of global demand, compared with growth of 9% this year, Hernandez said, citing a tight scrap market and the drop in the use of copper as loan collateral………………………………………..Full Article: Source

LME to run palladium and platinum price benchmarks

Posted on 17 October 2014 by VRS  |  Email |Print

The London Metal Exchange will administer the digital price-setting mechanism for palladium and platinum, months after a failed bid to run the replacement for the daily silver benchmark.
The LME will take over management of the price “fixes” for the two metals from the start of December, putting the process on to a new electronic platform called LMEbullion. The “fixes” used by miners, central banks, jewellers and the financial industry to trade precious metals and price derivative contracts have lost lustre in recent years due to concerns about transparency and vulnerability to manipulation………………………………………..Full Article: Source

HSBC Bullish On Platinum Group Metals But Trims Forecasts

Posted on 17 October 2014 by VRS  |  Email |Print

HSBC maintained its bullish outlook on platinum group metals but trimmed its price forecasts Thursday. The bank described platinum as “oversold” after a decline in recent months, dragged down by weakness in gold and strength in the U.S. dollar.
“We maintain our bullish outlook on platinum but lower our price forecast by 6% in 2014 to average USD1,410/oz,” HSBC said. It revised its 2016 forecast to $1,505 from $1,700. For sister metal palladium, HSBC left its 2014 forecast at $825 but trimmed its 2015 outlook to $855 from $900………………………………………..Full Article: Source

Metals sector welcomes pro-industry direction of EU’s incoming commission team

Posted on 17 October 2014 by VRS  |  Email |Print

Europe’s non-ferrous metals associations have said they are positive about the reindustrialisation policy of the new European Commission president Jean-Claude Juncker.
His team could this week receive formal approval from the European parliament, with only one political casualty during the hearings process that ended last week. Spanish conservative Miguel Arias Cañete will secure the climate and energy portfolio, even though he was questioned by MEPs about his environmental credentials. He has promised to help energy-intensive industries cope with carbon trading expenses………………………………………..Full Article: Source

Societe Generale Trims Forecasts For Platinum, Palladium

Posted on 16 October 2014 by VRS  |  Email |Print

Societe Generale is “cautious” on platinum group metals and downwardly revised its forecasts. Prices have tumbled in recent weeks, and while speculators remain net long, their bullish positioning has fallen since mid-August as the number of shorts increased, Societe Generale says. Outflows from exchange-traded funds have occurred.
South African production has ramped up from a strike faster than expected, and there is a realization existing above-ground stocks may be more than once thought, the bank says. Further, PGMs fell with gold as the dollar strengthened in recent weeks, although the opposite is the case so far Wednesday. Despite favorable supply/demand fundamentals, platinum is likely to come under pressure again if gold comes back under pressure, the bank says………………………………………..Full Article: Source

Most industrial metals likely to move up next year

Posted on 16 October 2014 by VRS  |  Email |Print

Copper is likely to trade lower on concerns of weak Chinese demand, along with trimming of its global economic growth forecast by the International Monetary Fund (IMF). Other industrial metals, however, are expected to buck the broad trend and strengthen in 2015.
Led by nickel, base metals’ price declined in September. On the benchmark London Metal Exchange, nickel fell by steep 13.5 per cent, followed by 7.1 per cent in lead, 6.8 per cent in aluminium, 4.4 per cent in copper and 3.6 per cent in zinc………………………………………..Full Article: Source

Thomson Reuters Publishes GFMS Copper Survey Update 2014

Posted on 16 October 2014 by VRS  |  Email |Print

Thomson Reuters today released an interim update to the 2014 edition of the GFMS Copper Survey: Growth spurt in supply as global consumption slows, sets scene for further price weakness. Copper is forecast to average $6,810/tonne in 2014 (3-month LME), a 7.3% decline year-on-year.
Notwithstanding the weak performance year-to-date, down 10.5% year-on-year, we expect the metal to trade lower in the final quarter with a forecast of $6,500/tonne, or an approximate 2% decline from current prices………………………………………..Full Article: Source

Domestic Chinese high-carbon ferrochrome prices fall; stainless steel demand weak

Posted on 16 October 2014 by VRS  |  Email |Print

Domestic spot prices of 50% Cr Chinese high-carbon ferrochrome were at Yuan 6,200-6,400/mt (equivalent to 76-79 cents/lb) on Wednesday, down from Yuan 6,250-6,400/mt a week ago, after major stainless steelmakers in the country lowered their October purchase prices.
Last week, Shanxi Taigang Stainless Steel had cut its October bid price by Yuan 50/mt on month to Yuan 6,150/mt, while Baosteel and Jiuquan Iron & Steel both dropped their October prices by Yuan 50/mt on month to Yuan 6,400/mt in late-September………………………………………..Full Article: Source

World’s top 10 silver producers updated – companies & countries

Posted on 15 October 2014 by VRS  |  Email |Print

While it has always been relatively easy to collate the world’s top 10 gold miners because they are all primary producers, to do the same for silver is not nearly such an easy task as most of the world’s silver is produced as a by- or co-product of gold and base metals mining.
Thus in the table of the top 10 global silver producers shown below only four could be classified as primary silver miners – and virtually all those will, in any case, also be producing other metals – notably gold, lead and zinc – as very significant by products without which they would perhaps not be profitable mining companies………………………………………..Full Article: Source

Iron ore price bounce to see support from restocking: Investec

Posted on 15 October 2014 by VRS  |  Email |Print

The sharp rise in iron ore prices this week, following bullish China September trade data, should be supported in the short term by restocking, Investec Bank said Tuesday. September iron ore imports to China rose 13.6% year on year, and was the second-highest reported monthly amount, Investec analysts said in a note.
“In as much as the Chinese trade data was positive, it needs to be borne in mind that the strong iron ore demand figures may only be temporary, with mills restocking ahead of the Golden Week holiday,” Investec said. “That said, we are now moving into the traditional period of restocking for the New Year.”……………………………………….Full Article: Source

Copper Ends at Highest Level Since Mid September

Posted on 15 October 2014 by VRS  |  Email |Print

Copper prices rose to their highest level in more than three weeks Tuesday, after China’s central bank cut short-term borrowing costs for banks, suggesting that officials may be willing to take the edge off an expected slowdown in the economy of the world’s largest copper consumer.
Copper for December delivery, the most actively traded contract, closed up 1.6% at $3.0900 a pound on the Comex division of the New York Mercantile Exchange, its highest level since Sept. 19………………………………………..Full Article: Source

Metals in 2015-16: Copper to decline, Lead, Zinc to rise

Posted on 15 October 2014 by VRS  |  Email |Print

While precious metal markets watch anxiously for signs of when the world’s major central banks might begin to normalise monetary conditions, prices of industrial metals are currently being determined by fundamentals of supply and demand that are, in many cases, specific to each metal, according to latest Natixis Metals Review released on Tuesday.
Aluminium market to witness first annual deficit in eight years. However, in the near term higher Chinese output of aluminium, accompanied by hgiher exports of aluminium products, could lead to near-term weakness in aluminium prices. Natixis observed that their bullish view on LME aluminium prices is tempered somewhat by the likelihood that premiums will stay higher for longer………………………………………..Full Article: Source

Industrial Metals Rise as China’s Trade Data Beats Forecasts

Posted on 14 October 2014 by VRS  |  Email |Print

Industrial metals advanced amid speculation demand will be sustained as trade data from China, the biggest user, beat expectations and Premier Li Keqiang said the nation sees growth this year hitting its 7.5 percent target.
Nickel climbed as much as 1.7 percent in London, while copper rose 1 percent. Exports in September rose 15.3 percent from the same month last year, the most since February 2013 and beating the 12 percent median estimate in a Bloomberg News survey before data from the country’s customs administration………………………………………..Full Article: Source

China Copper Ore Imports Jump to Record as Smelters Boost Demand

Posted on 14 October 2014 by VRS  |  Email |Print

China’s imports of copper ore and concentrate climbed for a second month to a record as the world’s biggest producer of the refined metal boosts capacity.
Inbound shipments of the partly treated ore used in smelting rose 34 percent to 1.29 million tons in September, according to data today from country’s customs administration. Imports through the first nine months of the year are 20 percent higher than the same period in 2013………………………………………..Full Article: Source

Three options to play aluminium

Posted on 13 October 2014 by VRS  |  Email |Print

While aluminium has a number of practical uses, its returns for investors have been extremely poor. However the sector may be due for a change in fortune for investors who are patient and prepared to ride out the current depressed markets. This is the view of South African asset management firm RECM which has quietly been building up positions in the sector since the start of 2014.
Pointing out that aluminium is beginning to make inroads into the automotive sector and take market share in the beverage market, RECM sees demand continuing to rise. While the demand side for aluminium looks good, this comes with the caveat that the aluminium price is continuing to trade at below the production costs of around 60% of the producers in the global aluminium market, suggesting that this isn’t necessarily a “slam-dunk” short-term play………………………………………..Full Article: Source

Will Zinc Price Rally in October?

Posted on 10 October 2014 by VRS  |  Email |Print

Zinc price in China’s domestic market is expected to trend higher in October, an analyst from Shanghai CIFCO Futures predicts in a most recent SMM’s interview. Orders at Chinese galvanizers and zinc oxide producers usually grow in Q4, and this will boost demand for zinc ingot, the analyst told SMM.
“Physical supply is tight now, with spot premiums in east China’s zinc market as high as 200 yuan per tonne”, he said. Concern over supply disruptions of zinc ore will continue to lure investors into zinc market, he added………………………………………..Full Article: Source

Copper Price Rises Most in Three Weeks on Dollar’s Drop

Posted on 10 October 2014 by VRS  |  Email |Print

Copper prices rose the most in three weeks in London as the dollar’s decline enhanced the appeal of industrial metals as alternative investments. Federal Reserve policy makers maintained a pledge to keep interest rates low for a “considerable time,” and said growth “might be slower than they expected if foreign economic growth came in weaker than anticipated,” minutes of last month’s meeting showed.
In the previous three days, the dollar posted the biggest drop since July 2013, against a basket of 10 currencies. Today, prices from aluminum to zinc climbed………………………………………..Full Article: Source

So you want to control PGM prices…

Posted on 09 October 2014 by VRS  |  Email |Print

Central banks buying and selling platinum and palladium to control prices: it’s the least silly idea circulating in the bid to boost platinum prices. In case you missed it, ahead of a Russia-South Africa meeting a month or so from now, Sergei Donskoi, Russia’s Minister of Natural Resources, suggested the two countries buy the metal through their central banks to affect prices, according to a Bloomberg report on Tuesday.
Consider the main alternative: platinum and palladium miners getting together to form a true cartel. Here the PGM houses would have to coordinate and control production, somehow addressing the politically thorny issue of unprofitable shafts; stick to said production plans; and then agree, presumably, only to sell for a fixed price………………………………………..Full Article: Source

Chinese alumina prices rangebound as market returns from holidays

Posted on 09 October 2014 by VRS  |  Email |Print

The spot alumina price in China’s Henan was rangebound Wednesday at Yuan 2,860/mt ($465/mt) for 70:30 cash and credit payment terms, unchanged from September 30, as the market returned from an extended break from October 1-7 to celebrate National Day.
On Wednesday, Henan refiners’ offers remained at Yuan 2,900/mt cash, with tradable levels pegged at Yuan 2,850-2,900/mt cash to partial credit terms. Spot trade was lacking as market participants took a wait-and-see attitude on their first day back, especially in view of weaker domestic aluminum prices………………………………………..Full Article: Source

Commodity themes 2015: Expect metals to be bullish, Oil to fall further

Posted on 08 October 2014 by VRS  |  Email |Print

Amidst a strengthening US dollar, rise in equity markets, commodities are likely to underperform in the coming months. However, metals complex appears bullish,according to a new report titled Commodity Themes 2015 released by Deutsche Bank.
Brent oil physical fundamentals are weak and appearance of contango in Brent oil market will eventually be met with OPEC production cuts to tighten fundamentals and restore backwardation.Falling Brent crude oil prices are already impacting budgetary positions among the major oil producers. History shows that when OPEC takes action and cuts production, their efforts to stabilise and push oil prices are successful. However, this is contingent on world GDP growth in excess of 2.5%………………………………………..Full Article: Source

Palladium, Platinum Gain After Recent Slide

Posted on 08 October 2014 by VRS  |  Email |Print

Platinum and palladium futures rose Tuesday, as traders swooped in to take advantage of beaten-down prices in the precious metals. Palladium for December surged 2.7%, the biggest one-day gain for the most actively traded contract since Oct. 13, 2013. The contract ended up $20.90 at $787 a troy ounce on the Comex division of the New York Mercantile Exchange.
Platinum for January delivery, the most actively traded contract, settled up $12.70, or 1%, at $1,261.90 a troy ounce. Both metals, which are used primarily as a component in auto exhaust filters, have been pummeled in recent months, as an absence of growth in Europe and an economic slowdown in China sparked fears of weaker car demand. Platinum is down 17% from its highs of the summer, while palladium is off 15%………………………………………..Full Article: Source

Spot iron ore price decline fuelled record derivatives volume

Posted on 08 October 2014 by VRS  |  Email |Print

Slumping iron ore prices in September caused derivatives volumes to spike, after a relative sanguine period with prices hovering in a narrow range, according to data from The Steel Index. Over 62 million mt of iron ore derivatives were cleared outside China last month, with 15.6 million mt of options trade, 25 million mt of futures and the balance swaps.
Last month was the first time futures actually eclipsed swaps in volume — some participants prefer futures for regulatory reasons. “If the market migrates to futures entirely then theoretically more people should be able to participate,” one paper trader said………………………………………..Full Article: Source

Long-term Forecast for Commodity Prices and Mining Industry Funding

Posted on 07 October 2014 by VRS  |  Email |Print

Rising global scarcity of resources – metals, minerals and energy – that an ever-increasing human population uses every day to sustain its unsustainable lifestyle, has been the most important topic since the burst of the dotcom bubble in 2000. The reason is simple: we live on a planet with a distinctly finite resource base and a rapidly growing population.
For over the last twelve years supply has struggled to keep pace with demand. Yet we experience a collective breakdown among junior miners of epic historical proportions. Confused investors have been questioning their portfolio strategies and have withdrawn their money from “value in the ground” to re-invest it into scarily overvalued internet companies with questionable earnings and even more precarious business models built on promises of more bites and bytes………………………………………..Full Article: Source

Deutsche Bank Prefers Base Metals Over Precious for Investments

Posted on 07 October 2014 by VRS  |  Email |Print

Industrial metals are displaying resilience, while base metals are preferred over bulks and precious metals, said Deutsche Bank analysts in a recently published third-quarter preview.“Base metal commodity prices have displayed resilience in the face of ongoing U.S. dollar strength, with our thesis of lower price volatility playing out,” said DB metals and mining analysts Jorge Beristain and Wilfredo Ortiz.
“Of the industrial metals group, we expect nickel, lead and zinc will be the outperformers particularly since these markets have a relatively low exposure to the Chinese property market. However, the analysts advised that the 3Q14 earnings outlook is positive for industrial and precious metals. ……………………………………….Full Article: Source

Iron ore: Yes, the juice is bitter

Posted on 07 October 2014 by VRS  |  Email |Print

The competition is fierce among the top iron ore miners to drive down costs. In recent days BHP Billiton has touted its plan to usurp all - Rio Tinto in particular - as the lowest cost miner of iron ore, which is the main ingredient in steel making.
The miner is hosting analysts in Australia to hear its production plans which are, like its main rival, to produce more iron ore more cheaply in a market already in oversupply. Indeed, Jimmy Wilson, President of BHP’s iron ore unit, has likened it to squeezing as much juice from a lemon as possible………………………………………..Full Article: Source

Precious metals lacklustre on stronger dollar, weak physical demand

Posted on 06 October 2014 by VRS  |  Email |Print

Precious metals weakened on strength in US dollar and weak phyical demand. Barclays noted in a weekly report that platinum prices fell towards $1200/Oz to levels last tested in August 2009, making it the laggard of the complex. Silver has also failed to find fundamental support and has tested levels below $17/oz for the first time in 4½ years.
Palladium and gold have fared better,with gold having only surrendered its gains for the year, tumbling below $1200/oz after the strong nonfarm payrolls report, while palladium has fallen to six-month lows as the dollar has strengthened and equity markets have weakened. In our view, palladium’s fundamentals have limited the metal’s downside to some extent but the recent price weakness raises the question: where is the price floor for the precious metals?……………………………………….Full Article: Source

Nickel Advances Most in 19 Weeks as Goldman See Rally

Posted on 06 October 2014 by VRS  |  Email |Print

Nickel rose the most since mid-May as Goldman Sachs Group Inc. said it expects prices to recover after the metal entered a bear market this week. Rising costs stemming from an Indonesian ore-export ban, along with lower Philippine ore deliveries to China, the world’s largest nickel user, will help boost prices to $22,000 a metric ton in 12 months, or 37 percent higher than yesterday’s close, Goldman analysts led by Jeffrey Currie said in a note dated yesterday.
Indonesia was the top supplier to China until it implemented the limits in January. “The Indonesians don’t seem to be relenting on the ore-export ban, so the nickel price is likely to have some upside from here,” Tai Wong, director of commodity products trading at BMO Capital Markets Corp. said………………………………………..Full Article: Source

Robots replace humans in mines as commodity slump forces cost cuts

Posted on 06 October 2014 by VRS  |  Email |Print

Major mining firms could have converted around 40pc of their machinery to operate autonomously by the end of the decade. The world’s biggest mining companies are poised to aggressively slash production costs and introduce more automation into their most productive pits as slowing demand in China threatens to force almost a third of the industry out of business.
Experts expect that the major mining companies could have converted around 40pc of their machinery to operate autonomously by the end of the decade as high-tech robots and drones replace humans in a drive to maintain the bottom line and operating profits………………………………………..Full Article: Source

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