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Iron Ore Trade Boom Shows China Bid for Commodities Clout

Posted on 08 May 2015 by VRS  |  Email |Print

China’s bid for greater influence over commodity prices is intensifying as record trade in its iron ore futures dwarfs its nearest rivals. Derivatives volumes on the Dalian Commodity Exchange more than doubled to 18.6 million contracts last month, or 1.86 billion metric tons, bourse data show.
Trading in contracts on the Singapore Exchange Ltd. totaled 78.2 million tons. UBS Group AG forecasts global demand at 2.04 billion tons in 2015. The world’s biggest consumer of metals, energy and grains is seeking to tighten its grip over prices with its own contracts for raw materials from tin to coal………………………………………..Full Article: Source

Copper slips from near 2015 peaks

Posted on 07 May 2015 by VRS  |  Email |Print

Copper and most other industrial metals retreated on Wednesday from recent peaks as copper demand in China falters. Some investors also regard the base metals sector’s recent strong gains as outpacing supply and demand fundamentals.
The index of six base metals traded on the London Metal Exchange had rallied 13 per cent from lows in mid-March until Tuesday, when zinc hit its highest price in eight months and copper its strongest since mid-December. “I do think in general they’ve moved a bit too far too soon. The sector is overdue a correction,” said Stephen Briggs, metals strategist at BNP Paribas in London………………………………………..Full Article: Source

Iron Ore Trade Boom Shows China Bid for Commodities Clout

Posted on 07 May 2015 by VRS  |  Email |Print

China’s bid for greater influence over commodity prices is intensifying as record trade in its iron ore futures dwarfs its nearest rivals. Derivatives volumes on the Dalian Commodity Exchange more than doubled to 18.6 million contracts last month, or 1.86 billion metric tons, bourse data show. Trading in contracts on the Singapore Exchange Ltd. totaled 78.2 million tons. UBS Group AG forecasts global demand at 2.04 billion tons in 2015.
The world’s biggest consumer of metals, energy and grains is seeking to tighten its grip over prices with its own contracts for raw materials from tin to coal. While bourses from London to New York maintain a hold on global commodity benchmarks, iron ore traders look to the Dalian market for direction, according to Clarkson Plc, a broker………………………………………..Full Article: Source

Silver Market Update: Could A Reversal Be On The Way?

Posted on 06 May 2015 by VRS  |  Email |Print

Silver’s long bear market, from its 2011 highs, is believed to be “nested” within a larger bull market, along with gold’s, as discussed in more detail in my parallel Gold Market update, to which the reader is referred. This is an echo of what happened in the 70s, when both gold and silver went into a heavy correction in 1975 and 1976 that was taken at the time to be a new bear market, but ended up leading into a massive parabolic ramp that took silver to dizzying heights as the Hunt brothers attempted to corner the silver market.
The second major upleg of this bull market should take silver to levels that dwarf those of the 70s peak, and this is not some deluded fantasy but based on a sound assessment of the trends in currencies and debt now extant………………………………………..Full Article: Source

Copper bulls take charge on supply, China bets

Posted on 06 May 2015 by VRS  |  Email |Print

Copper’s longest rally in almost a decade pushed the metal into a bull market on signs that supplies are tightening just as speculation mounts that demand from China will rebound. Glencore, the world’s third-biggest copper-mining company, said output of the metal slid 9 per cent last quarter partly as ore grades fell.
The Baar, Switzerland-based company’s results add to supply concerns after a disruption in February from an electrical failure at a site owned by BHP Billiton. Almost a 10th of global output is at risk of being lost due to labor disruptions this year, Barclays estimates………………………………………..Full Article: Source

Zinc and copper rally on the LME

Posted on 06 May 2015 by VRS  |  Email |Print

Zinc hit its highest price in eight months on Tuesday and copper its loftiest since mid-December thanks to a combination of concern about supply shortfalls and optimism over the global economy. All the metals on the London Metal Exchange (LME) attracted buying, which also pushed nickel to a six-week high, as the market reopened following a British public holiday on Monday.
‘Commodities are bouncing back up, led by oil and iron ore. Base metals seem to be following the herd,’ said Richard Fu, director of Asian commodities trading for Societe Generale Newedge in London………………………………………..Full Article: Source

Base metal miners climb back

Posted on 06 May 2015 by VRS  |  Email |Print

Damage undone: base metal equities largely back to where they started the year before copper’s rout. Early this year copper prices dropped hard and fast. They went from about $3/lb to, briefly, under $2.50/lb in late January. Asian traders took a sudden bearish view of copper on the back of routs in oil and iron ore and drove the price down.
With the crashing copper price so went the miners, no surprise here. Mining equities with key copper operations tumbled heavily. The likes of Lundin Mining and Hudbay lost a quarter or so of their share price over the course of a few days back in mid-January. As noted back then, the copper rout seemed overdone. In contrast to iron ore, copper did not (and does not) suffer the same bearish outlook of a pervasive and sizeable long-term oversupply………………………………………..Full Article: Source

Global iron ore prices recover in April 2015; reverse price fall trend of past months

Posted on 06 May 2015 by VRS  |  Email |Print

Global iron ore prices staged a recovery last month reversing a trend that witnessed a sharp fall in past months. Prime grade ore with iron content of 62% (Fe 62% grade) rose nearly 10% to $56.2 per tonne, in what markets term a relief rally on a month on month basis in April. Ore with Fe content of 58% gained 2.1%. However, domestic iron ore prices fell due to higher availability. This is expected to add stability to steel prices according to analysts.
Ore prices had shrunk to an almost ten year low in beginning of April 2015. The upturn, close to the biggest gain in prices in nearly two years was led by Australian giant BHP Billiton announcing a slower pace of expansion. Last week, Brazilian mining major Vale announced production cuts to contain price fall in iron ore………………………………………..Full Article: Source

4 Industrial Metal ETFs Leading the Space Rally

Posted on 06 May 2015 by VRS  |  Email |Print

Metal ETFs persistently gave a weak performance for much of 2014 and the initial phase of 2015. The combination of a stronger greenback, a slumping China, the oil price rout and the adverse demand-supply imbalance have put a hold over several industrial metals in recent times.
However, since the last one month, a huge reversal in the space is being noticed, as many metals in the segment have started to see bumper trading. In fact, the metal space has seen Pure Beta Lead ETN ( LEDD ) returning as high as 21% in the last four-week period. A dovish Fed which is in no hurry to hike key rates in the U.S. and the resultant moderation in the greenback lent a hand in pushing the space higher………………………………………..Full Article: Source

All eyes are on iron-ore rally

Posted on 05 May 2015 by VRS  |  Email |Print

By last month iron-ore prices stood at just a third of their 2011 highs, according to the World Bank’s latest quarterly Commodity Markets Outlook, which was released last week. The iron-ore market has been savaged as new, low-cost supplies have come online — mainly from Australia but also from Brazil — while Chinese demand growth is reducing as China’s economy slows. The steel industry consumes almost all of the world’s iron-ore output and China now produces half of its steel.
Not surprisingly, then, the market hangs on every twist in the Chinese economic saga — which is why speculation in recent weeks that China’s authorities might take extra steps to stimulate the economy has helped to cause a sharp bounce in the iron-ore price globally, and an even sharper jump domestically in the share price of SA’s largest iron-ore producer, Kumba Iron Ore………………………………………..Full Article: Source

Outside money start to pour into mining M&A

Posted on 05 May 2015 by VRS  |  Email |Print

Mick Davis hasn’t spent a cent of his $6bn, but private money and non-mining players’ share of M&A has already doubled in less than three years. In 2014 the number of mergers and acquisitions in the mining and metals industry doubled from the year before according to data from research company SNL Metals & Mining.
It was far from a bumper year though. At $21 billion deal values were less than half 2012’s tally according to the authors of the report Nick Wright and Mark Ferguson. It also pales against the heady pre-financial crisis days when mining M&A came within shouting distance of the $100 billion mark………………………………………..Full Article: Source

Goldman Sachs May Sell Coal Mines –Energy Journal

Posted on 05 May 2015 by VRS  |  Email |Print

Goldman Sachs Group Inc. is in talks to sell its Colombia coal mines at a loss, according to people familiar with the negotiations, Ianthe Jeanne Dugan reports. Goldman faced protests, falling coal prices, an environmental law and the Federal Reserve considering limits on the ways commercial banks can produce, store and sell raw materials, as it struggled to make the investment pay off.
A deal in the wake of Goldman’s sales of power plants and an aluminum-storage business would mark the end of the bank’s rough experience as a producer of raw materials. But it plans to continue trading raw materials and related financial instruments and making a market in commodities for its clients. Its commodities operations represented about $1.5 billion in revenue in 2013, down from about $3.4 billion in 2009………………………………………..Full Article: Source

Gold equities may be better bet than physical metal

Posted on 04 May 2015 by VRS  |  Email |Print

While the price of gold has meandered in a narrow range this year, gold equities have improved somewhat and an analysis of relative performance suggests they may have further to rally. Spot gold ended Thursday’s trade at $1,183.85 an ounce, largely unchanged from $1,183.55 at the end of 2014, as the precious metal battles the competing influences of a firmer dollar and concerns over a Greek exit from the eurozone.
However, major gold miners have shown some improvement, with the S&P TSX Global Gold Index gaining 14% so far this year. The Toronto Stock Exchange-based index groups together the world’s top gold producers, including No 1 Barrick Gold Corp, which is up 20.5% this year in US dollar terms, and No.2 Newmont Mining Corp, which has gained 40%………………………………………..Full Article: Source

Silver miners moving up the endangered list

Posted on 29 April 2015 by VRS  |  Email |Print

Pure-play silver miners, a niche investment market popular with retail investors, are moving up the endangered list. Buffeted by a 68 percent plunge in the price of silver since 2011, miners who traditionally made most of their money from silver are increasingly diversifying into gold, buying mines that have been put up for sale and looking to acquire more.
In addition to spurring deals in the precious metals space, the trend is reducing investment avenues for those wanting to take a bet on a commodity that often outperforms gold when bullion is rising. ……………………………………….Full Article: Source

Good news for platinum industry

Posted on 29 April 2015 by VRS  |  Email |Print

New commercial vehicle sales in the 28-member European Union bode well for platinum producers in South Africa. Sales figures for March released in Brussels by the European Automobile Manufacturers Association showed a 20.7% increase on last year.
Even though the region produces less than a quarter of the world’s new vehicles, European demand accounts for just over a third of global platinum demand for use in autocatalysts. The March 2015 year-on-year sales growth was the highest since December 2013, following gains of 8.3% y/y in February and 7.6% y/y in January………………………………………..Full Article: Source

Where to next for the iron ore price?

Posted on 29 April 2015 by VRS  |  Email |Print

Iron ore rose to its highest level since March last night at $US59.09, and is now up 25 per cent for the month. The rise, which follows BHP Billiton’s decision last week to slow the pace of its $US2 billion expansion plan in the Pilbara, comes after the iron ore price suffered its largest quarterly loss since 2009 in the three months through March and fell to a decade-low of $US47.08 a tonne earlier this month. Steel demand in China was down 5 per cent year-on-year during the March quarter.
The biggest question facing the industry is whether BHP’s slowdown will be matched by Rio, Gina Rinehart’s Roy Hill project or Vale, which is halfway through a $US19 billion expansion in Northern Brazil………………………………………..Full Article: Source

Iron ore rally: Mere dead cat bounce?

Posted on 29 April 2015 by VRS  |  Email |Print

A breath-taking rally in iron ore prices in recent weeks has put the sector back in bull market territory, but strategists warn that the upside may be short-lived. The beleaguered commodity has recovered 25 percent since hitting a ten-year low of $46.70 per metric ton earlier this month; a 20 percent gain from recent lows is typically considered in bull market territory.
Spot prices traded just below $60 a ton on Tuesday, extending a two-and-a-half week run and pushed Australia’s benchmark stock index to seven-year highs on Monday………………………………………..Full Article: Source

Should You Applaud Recent Surge in Metal ETFs?

Posted on 29 April 2015 by VRS  |  Email |Print

The commodity markets saw a choppy 2014, with the metals and mining ETF space being one of the most hurt spaces. A rising greenback amid QE-wrap in the U.S., concerns of further Fed tightening, global growth worries, deflationary fears and last but not the least the Chinese economic slowdown caused metal ETFs to see their worst days in several years.
However, to many investors’ surprise, metal ETFs received a fresh lease of life and logged refreshing returns in the last five days (as of April 27, 2015) along with several other commodity ETFs. In fact, metal and mining ETFs have been displaying a pretty nice trend lately healing their year-to-date bloodbath to a large extent……………………………………….Full Article: Source

For hard-hit silver miners, gold is the silver lining

Posted on 28 April 2015 by VRS  |  Email |Print

Pure-play silver miners, a niche investment market popular with retail investors, are moving up the endangered list. Buffeted by a 68 percent plunge in the price of silver since 2011, miners who traditionally made most of their money from silver are increasingly diversifying into gold, buying mines that have been put up for sale and looking to acquire more.
In addition to spurring deals in the precious metals space, the trend is reducing investment avenues for those wanting to take a bet on a commodity that often outperforms gold when bullion is rising………………………………………..Full Article: Source

Why Nickel is Your Best Bet for Resource Gains This Year

Posted on 28 April 2015 by VRS  |  Email |Print

A huge event is playing out in the commodities markets right now. Most people don’t know about it. It’s not gold. It’s not oil. And it’s not iron ore. This is an event taking place close to Australia’s borders that’s set to impact one key — and niche — area of the resources sector.
And if I’m right about the importance of this event, it could see the demand for this one key commodity take off, as soon as June this year. What am I talking about? Let me explain…This is a story about nickel. Most people have heard of nickel, but many have no idea about its importance. The most important thing you need to know about it is that China is hungry for high-grade nickel………………………………………..Full Article: Source

Japanese aluminum industry divided on Chinese export tax removal

Posted on 28 April 2015 by VRS  |  Email |Print

China’s plan to remove an export tax on aluminum bars and rods from May 1 has the Japanese market divided, sources said Monday, April 27. Although rods and bars are a small market — China exported 2,114 mt to Japan in 2014 — the products have a wide range of uses in the cable, construction and automotive sectors. So the end of China’s export tax could have ripple effects, they said.
Japan’s 2014 imports included those by an extruder that used Chinese rods and bars to produce window frames and sliding doors for high-rise buildings………………………………………..Full Article: Source

Uranium outlook positive but perhaps not outstanding unless…

Posted on 24 April 2015 by VRS  |  Email |Print

Uranium has been one of the best performing commodities over the past year, but only because it was rising from such a low level. So now what lies ahead? While the uranium price may well have been one of the best performing over the past nine months or so, it should be remembered that this is as a recovery from an all-time low price in real terms – but then such times may well prove to have provided the best opportunity to get back into the commodity.
Thus the uranium round table panel event at the London 121 Mining Investment conference was well attended as investment professionals sought to get a handle on the latest prospects for the nuclear metal. It is worth recalling that the price reached an all-time high at a time when lack of investment in new projects, together with run down user inventories, created a huge supply/demand imbalance price spike in 2007 to reach around $135/lb – albeit briefly as is the nature of price bubbles of this type…………………………………..Full Article: Source

Bullish Traders Are Turning To Rare Earth Metals

Posted on 24 April 2015 by VRS  |  Email |Print

This past week many momentum traders have turned their attention to a niche corner of the commodity markets – rare earth metals. Companies that explore and or process rare metals are of specific interest to traders because of strong moves in a couple of the sector’s key players. Based on their respective chart patterns, active traders will likely add these stocks to their watch lists because they could be setting up for a continued move higher.
Molycorp, Inc. (MCP) is one of the most popular rare earth players available in the public markets and it is a favorite amongst many who are interested in the sector. Recently, the company announced that it will supply rare earth metals for use in Siemens AG’s (SIEGY) wind turbine generators over the next 10 years. This news could be enough of a catalyst to continue to send prices higher over the coming weeks and months…………………………………..Full Article: Source

China’s aluminum set to worsen glut as export taxes removed

Posted on 24 April 2015 by VRS  |  Email |Print

China, the world’s largest aluminum producer, may worsen a global glut of the metal as the government scrapped export duties for some products. The removal of fees to ship certain aluminum products may encourage further exports from the country that accounts for about half the world’s production. Global prices may sink as the move encourages producers to shift China’s aluminum glut overseas, according to Bloomberg Intelligence.
“The policy will improve China’s aluminum market by encouraging exports and reducing domestic oversupply, but will increase global aluminum supply,” said Ma Kai, a Beijing-based analyst at China International Capital Corp. “Overseas aluminum premiums will be damped, while rising Chinese exports will also have a negative impact on LME aluminum prices.”………………………………….Full Article: Source

Aluminum leads metals lower as China manufacturing contracts

Posted on 24 April 2015 by VRS  |  Email |Print

Aluminum fell the most in almost a month as most industrial metals retreated after a gauge of manufacturing strength slid to a 12-month low in China, the world’s biggest consumer. Aluminum lost as much as 1.2%, the biggest drop since March 27. HSBC Holdings and Markit Economics’ preliminary Purchasing Managers’ Index for Chinese manufacturing was at 49.2 for April, below the median estimate in a Bloomberg survey and the second month of contraction. Factory data for the euro region are due later in the day.
“The fundamental economy is not improving” in China, said Helen Lau, a metals and mining analyst at Argonaut Securities Ltd. in Hong Kong. “It is a little worrying. We’re close to the bottom. Before that happens, the government should continue with stimulus until there is a rebound.”………………………………….Full Article: Source

China’s molybdenum export tax removal to overshadow Japanese term talks

Posted on 24 April 2015 by VRS  |  Email |Print

China’s removal of its export tax on molybdenum products from May 1 will overshadow term contract negotiations between Japanese steelmakers and overseas moly suppliers, industry sources said Thursday, April 23. Japanese moly term contracts typically run over a one-year period.
But for 2015, some consumers last year have asked to break up the annual contract into two six-month contracts as the launch of the Chilean Sierra Gorda mine in 2014 may impact the supply and demand picture. Japanese traders told Platts Thursday that they were told that first Sierra Gorda moly shipment will be in May-June. More than 140 mt/month of moly oxide in total are to be discussed for July-December contracts. The negotiations are expected to heat up in May…………………………………..Full Article: Source

Copper: What’s in store for the metal in FY16?

Posted on 24 April 2015 by VRS  |  Email |Print

Copper prices may remain under pressure as the new mine supply will exceed the rate of copper consumption by about 1.5% per annum. In India, domestic metal demand growth is likely for FY16.
Copper market will be driven by fear of oversupply in the coming years. Prices are also likely to be under pressure. A report by India Ratings(Ind-Ra) says copper market is likely to be in a physical surplus for the coming two to three years. Fitch Ratings see a downside risk to copper prices. While the demand-supply situation till 2014 was more evenly balanced for copper than for aluminium, there is an expectation of oversupply…………………………………..Full Article: Source

Iron Ore Price Outlook Cut by World Bank as Supplies to Expand

Posted on 23 April 2015 by VRS  |  Email |Print

Iron ore will lead declines among metals this year as the biggest producers in Australia and Brazil expand low-cost supplies further while demand remains weak, according to the World Bank, which cut price forecasts.
The raw material will average $63 a metric ton this year, the Washington-based lender said in its quarterly commodities report on Wednesday. That compares with the estimate of $75 given in the bank’s January’s report. The forecast for 2016 was cut to $66.60 from $77.90……………………………………Full Article: Source

Zinc bull story to keep rolling

Posted on 23 April 2015 by VRS  |  Email |Print

Zinc has started to show signs of life again. In recent weeks the spot price of zinc crossed over $1/lb, up from a one-year low around 0.90/lb. It seems the prospect of a growing zinc deficit is back in play.
The notion of zinc deficit, long forecast by analysts and base metal miners, has already created one false dawn. With such a deficit in mind, zinc fever caught the market in late 2013 and persisted to mid 2014, driving the price from near $0.80/lb to around C$1.10……………………………………Full Article: Source

Platinum: The Best Buy in the Metals Sector

Posted on 22 April 2015 by VRS  |  Email |Print

Precious metals are often misunderstood in the investment world. Most consider the three big metals – silver, gold, and platinum – interchangeable, since they tend to rise and fall as a group. But these metals are not created equal…
Of the three, platinum is the rarest and most valuable. Yet trying to convince investors to buy platinum is like pulling teeth. Everyone wants to stick with the more familiar metals – gold and silver. But it’s time to stretch your boundaries. Right now, platinum is trading for less than the price of gold – and it’s sure to move higher soon!………………………………….Full Article: Source

Price Forecast for Aluminum, Copper 2015

Posted on 22 April 2015 by VRS  |  Email |Print

As we’ve heard many times before from our readers, conference attendees and loyal followers, “We’re not as interested in where metal prices have been, we’re much more interested in where prices are going.”
We at MetalMiner have done our best to heed the call, from our daily coverage all the way up to our monthly metal price forecast offerings, and with bearish markets prevailing we thought it best to provide an update for aluminum, copper, steel and stainless markets…………………………………..Full Article: Source

LME strives for ‘evolution’ not ‘revolution’: LME CEO

Posted on 22 April 2015 by VRS  |  Email |Print

The London Metal Exchange has seen a number of significant changes since Hong Kong Exchanges and Clearing completed its acquisition of the exchange in 2012, Garry Jones, CEO, LME said in a briefing late Monday. “Over the last couple of years since the Hong Kong Exchange bought the LME we continue to see significant changes and I think the important thing is that it’s evolution not revolution…we’re not changing the entire exchange, we’re moving things forward considerably,” Jones said.
He said the starting point of this ‘evolution’ was looking at the ‘underpinnings’ of the exchange in order to strengthen its core functions in IT, risk management, regulation, compliance, internal audit and market surveillance…………………………………..Full Article: Source

Goldman Sachs “very bearish” on copper price outlook

Posted on 21 April 2015 by VRS  |  Email |Print

Goldman Sachs expects the price of copper to fall to $5,200 per tonne or lower over the next twelve months, as a result of falling demand from China and a stronger US dollar. “We are very bearish on the outlook for copper over the next twelve to 18 months”, Goldman Sachs’ executive director for commodities, Max Layton, said during the Cesco week in Santiago, Chile.
“We have a very strong conviction that the copper prices are going to fall to $5,200 [per tonne], if not lower, over the next twelve months”, he added. A key indicator is the recent drop in steel demand from China, which has been falling by 5% year-on-year for the last six months. “Steel demand is declining and in history that is extremely rare,” Layton said…………………………………..Full Article: Source

Copper bulls are backing away

Posted on 21 April 2015 by VRS  |  Email |Print

Investors are backing away from copper after the biggest two-month rally since 2012. The problem is that demand is slowing in China, which accounts for about half of global copper use. Producers including Freeport-McMoRan say Chinese buying hasn’t picked up as it normally does at this time of year, and Goldman Sachs Group and Societe Generale SA are among banks predicting lower prices.
The metal is losing its appeal for money managers, who have reduced their net-long positions for two straight weeks, according to Commodity Futures Trading Commission data. Analysts, traders and hedge funds surveyed by Bloomberg last week were split on the price outlook, assessing rising inventories and prospects for reduced China consumption against aging mines that will mean limited supply gains…………………………………..Full Article: Source

Global Steel demand will grow by 1.4% in 2016: worldsteel

Posted on 21 April 2015 by VRS  |  Email |Print

In its latest report worldsteel forecasts that global apparent steel use will increase by 0.5% to 1,544 Mt in 2015 following growth of 0.6% in 2014. In 2016, it is forecast that world steel demand will grow by 1.4% and will reach 1,565 Mt. Chinese steel demand in 2014 saw negative growth for the first time since 1995 due to the government’s rebalancing efforts that had a major impact on the real estate market.
This situation is likely to remain unchanged in the short term and Chinese steel use will continue to record negative growth of -0.5% in both 2015 and 2016. In the medium term no strong rebound is expected. Some uncertainty remains regarding the impact of government measures aimed at stabilising the decelerating economy…………………………………..Full Article: Source

Steel demand in China forecast to decline through 2016

Posted on 21 April 2015 by VRS  |  Email |Print

Steel demand in China will shrink this year and next to extend the first annual contraction since 1995 as economic growth in the world’s biggest producer slows, according to the World Steel Association.
China’s steel use will drop 0.5 per cent to 707.2 million metric tons in 2015 and fall to 703.7 million tons next year, the group said in a statement. In 2014, demand declined 3.3 per cent to 710.8 million tons, according to the Brussels-based body, whose members account for 85 per cent of global output…………………………………..Full Article: Source

Iron ore jumps above US$50: Is it time to buy the miners?

Posted on 21 April 2015 by VRS  |  Email |Print

Iron ore has somehow managed to defy bearish market sentiment over the last few weeks, having recovered from a 10-year low to bounce back above the US$50 a tonne mark on Friday. According to data from the Metal Bulletin, the commodity rose 2.3% during the session to be trading at US$50.93 a tonne, compared to its recent low beneath US$47 a tonne. While iron ore has been on something of a tear recently; the rebound could well be short-lived.
Analysts and economists have taken turns in berating the outlook for the commodity, with some predicting prices will fall towards US$40 a tonne by 2017 while others, including Citi and Australia’s own Treasurer, Joe Hockey, have suggested it could fall below that level this year…………………………………..Full Article: Source

Copper Bulls Backing Away as China Woes Trump Supply Concerns

Posted on 20 April 2015 by VRS  |  Email |Print

Investors are backing away from copper after the biggest two-month rally since 2012. The problem is that demand is slowing in China, which accounts for about half of global copper use. Producers including Freeport-McMoRan Inc. say Chinese buying hasn’t picked up as it normally does at this time of year, and Goldman Sachs Group Inc. and Societe Generale SA are among banks predicting lower prices.
The metal is losing its appeal for money managers, who have reduced their net-long positions for two straight weeks, according to Commodity Futures Trading Commission data. Analysts, traders and hedge funds surveyed by Bloomberg last week were split on the price outlook, assessing rising inventories and prospects for reduced China consumption against aging mines that will mean limited supply gains……………………………………Full Article: Source

Copper supply surplus to widen to 399,000 mt in 2015: GFMS

Posted on 16 April 2015 by VRS  |  Email |Print

Rising production and softer demand growth should see the copper market register a 399,000 mt surplus this year, up from a surplus of 316,000 mt in 2014, Thomson Reuters GFMS said Wednesday. “We do not expect a pick-up in prices of note until the latter half of 2015,” GFMS said in its Copper Survey 2015, though it added: “Wild cards remain and include supply-side surprises, with producers perhaps cutting back from planned targets, while China’s state stockpiler could be active again in the current year.”
GFMS is forecasting an average copper price for 2015 of $5,975/mt, a 12% drop from the previous year. Three-months copper closed London Metal Exchange floor trade at $5,950/mt on Tuesday………………………………………..Full Article: Source

Copper may fall below $5,000/t next year: BofAML

Posted on 16 April 2015 by VRS  |  Email |Print

Copper prices have fallen YTD, despite significant production disruptions. This suggests that the commodity is on track to move into surplus and BofAML see prices fall below $5,000/t ($2.26/lb) next year. Copper has been the underperformer in the base metals complex since the beginning of 2014. This is heavily influenced by an unfolding switch in market balances from deficits to surpluses.
The challenging fundamental backdrop has also been reflected YTD, with copper falling by around 5% in 1Q15, despite close to 500kt of supply disruptions, equivalent to what we had allowed for the entire first half of 2015………………………………………..Full Article: Source

Chinese steel mills cut ferrous scrap buying prices

Posted on 15 April 2015 by VRS  |  Email |Print

The steel mills in Eastern China have announced further cut in ferrous scrap purchasing prices. The cut comes in the light of declining rebar and iron ore prices. Sources indicate that Jiangsu Shagang Group announced cut of Yuan 30 per mt on Saturday. The company had earlier lowered its scrap purchasing prices by Yuan 30 per mt last Sunday.
Following the announcement, scrap purchasing price of heavy melting scrap of thickness 6 mm and above now stands at Yuan 1,550 per mt, inclusive of VAT. The company has dropped its scrap buying prices by Yuan 170 per mt since March this year. Meantime, Yonggang Group also declared cut of Yuan 30 per mt on purchase price of heavy melting scrap 8mm and above effective Sunday onwards………………………………………..Full Article: Source

Base Metal Mining M&A Activity Expected to Make a Turnaround This 2015

Posted on 15 April 2015 by VRS  |  Email |Print

Base metal mining companies have been wary of acquisitions in the past few years due to global financial crisis and economic downturn. These companies have bought fewer assets that require large capital investment since 2012.
2013 had been a particularly slow year for transactions as companies opted to maximise the values of their assets and enter into joint ventures that reduce costs while maintaining production. Things are looking to go up soon, however, based on a recent report released by SNL Metals and Mining………………………………………..Full Article: Source

Precious metal bears eating bulls for lunch

Posted on 14 April 2015 by VRS  |  Email |Print

Weekend reading has served us rather well to catch up on current (potentially future) views and thoughts. Concern about the world economy is still the spotlight, continued fight of deflation and lower crude oil prices, China economy hard landing hitting the front page, volatile Middle East wars and the never ending tension between Ukraine and Russia seems to sum up a fair amount of uncertainty and volatility.
Looking at this week, China GDP data will serve as a catalyst to currencies that heavily depend on it. Further contraction in the 2nd largest economy could spell disaster as global demand could diminish and a snowball effect of fear may grip the market………………………………………..Full Article: Source

Citigroup Cuts Metals to Iron Forecasts as China Growth Slows

Posted on 14 April 2015 by VRS  |  Email |Print

Citigroup Inc. cut price forecasts for industrial metals and iron ore by as much as 50 percent amid signs Chinese demand is waning as economic growth in the world’s biggest consumer slows. The bank lowered its 2015 nickel forecast by 21 percent and cut its estimate for next year by 15 percent, analysts including Ed Morse wrote in a report e-mailed Monday.
Copper, aluminum, zinc, lead and tin projections for this year and 2016 were also lowered. The bank reduced its iron ore outlook through 2020, with prices seen falling into the $30s, according to the bank………………………………………..Full Article: Source

Aluminium drops on oversupply worries; lead and zinc rally

Posted on 10 April 2015 by VRS  |  Email |Print

Aluminium hit a three-week low on Thursday on concerns of oversupply and a cut in Chinese power prices, while lead and zinc hit multi-month highs on further inventory drawdowns. Daily London Metal Exchange (LME) data showed lead stocks MPB-STOCKS fell 725 tonnes to 223,125 tonnes, their lowest level since mid-March, while zinc stocks MZN-STOCKS fell 50 tonnes to 509,925 tonnes, their lowest point in five years.
Zinc and lead are the best performing base metals this year, with supply expected to tighten due to the closure of big mines. “We think (lead) prices should stabilise (near term) and rise by end of year. Lead (demand) is not very dynamic … but supply is probably not going to be as good as expected,” said Eugen Weinberg, an analyst at Commerzbank………………………………………..Full Article: Source

Global mining deals to pick up this year

Posted on 09 April 2015 by VRS  |  Email |Print

The number of mining deals worldwide increased in 2014 and this trend is likely to continue this year amid an ongoing commodity price rout that has forced miners to slash capital spending and cut costs, a study released April 8 shows.
According to SNL Metals & Mining’s report, 2014 saw 73 acquisitions that were valued at over US$10 million each, totalling almost $22 billion for the year. The figure, considerably higher than the $12 billion registered in 2013, is nothing to be too excited about, the study hints. The reason? 2014’s total was the third lowest in the past ten years, with only 2013 and 2009 (US$14.88 billion) being more disappointing than last year’s………………………………………..Full Article: Source

China’s iron ore tax cut puts heat on Australian miners

Posted on 09 April 2015 by VRS  |  Email |Print

China has sent a blunt warning to governments in Australia that it will strive to keep its domestic iron ore miners afloat by announcing a new round of tax cuts for the embattled industry. Just days after the Western Australian Government started giving royalty relief to junior miners like BC Iron, China’s State Council announced that Chinese iron ore miners would receive a 6 yuan ($1.27) tax cut on each tonne of iron ore produced.
The introduction of a subsidy by the world’s largest steelmaker may further hurt iron ore prices which fell to a 10-year of $US47.08 per tonne last week, and is bad news for Australian miners hoping to survive long enough to succeed the Chinese domestic miners………………………………………..Full Article: Source

Iron ore price rebounds past $US47

Posted on 08 April 2015 by VRS  |  Email |Print

Iron ore’s latest losing streak has halted at seven sessions, with the commodity recovering a small portion of lost ground in offshore trade and stalling the plunge toward $US45 a tonne. At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US47.60 a tonne, up 1.9 per cent from its prior close of $US46.70 a tonne.
The figure from the previous session represented a record low since The Steel Index began releasing the data in 2008 and was also the weakest mark since 2005-06 when miners used to set yearly benchmark contracts with Chinese steelmakers………………………………………..Full Article: Source

Decline in US sheet steel prices slowing, turnaround still unclear

Posted on 08 April 2015 by VRS  |  Email |Print

Although US flat-rolled steel price erosion is creeping to a halt, a definitive turnaround point has yet to be established, sources said Tuesday. A service center executive pegged the bulk of the hot-rolled coil market within Platts’ specifications of $450-$460/st, down slightly from last week’s range.
Buyers and mills alike are sensing the bottom is near, he said, but no one wants to be the first to commit to a large order or institute a price increase. “When we believe we’re at the bottom, we’ll go in and get some extra tons,” he said. “But we haven’t seen it yet. We need the mills to draw a line in the sand. So we’re just buying what we have to buy and nothing more.” A source with a top-tier mill agreed that mills are hesitant to raise prices until the overall market environment improves………………………………………..Full Article: Source

Supply Problems Buff Away Some of Copper’s Tarnish

Posted on 07 April 2015 by VRS  |  Email |Print

Bad news is good news for copper bulls. After being weighed down for years by slowing demand in China, prices of the industrial metal are on the rise again in recent weeks because of a series of calamities, ranging from flooding and mudslides in northern Chile—which have claimed at least 25 lives—to an electrical failure in Australia.
These unforeseen events have shut copper mines and caused severe disruptions to the world’s output of the metal, which is used in everything from consumer electronics to air conditioners and water pipes. As supply shrank, copper prices in the $87.5 billion futures market went on a tear………………………………………..Full Article: Source

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