WEEK IN BRIEF: Glencore cuts; JP Morgan exits LME trading floor; zinc stocks; Codelco labour action

Charlotte Radford looks back at the past seven days’ metals market news, as covered by Metal Bulletin reporters.

Glencore kicked the week off by announcing it was removing an estimated 400,000 tonnes of copper from the market over 18 months, by suspending production at its Katanga and Mopani mines

The miner-trader also plans to raise up to $2.5 billion in equity capital, as part of a cost-cutting programme that aims to cut its debt by more than $10 billion by the end of 2016.

Glencore ceo Ivan Glasenberg has long been an advocate of supply discipline, and he has now put his money where his mouth is, Alex Harrison wrote.

And the production cuts have changed the outlook for the copper market over the coming year, just as annual contract season approaches. 

The suspension of metal output at Katanga will also tighten the cobalt market and given impetus to the minor metal.

As markets reacted to the news, copper prices rallied on the London Metal Exchange on Tuesday, with positive sentiment filtering through to benefit the rest of the base metals. The red metal’s three-month price rallied towards $5,400 per tonne on short covering, though analysts are sceptical that it will manage to retain its gains.

Nickel led the way in LME trading on Thursday to stabilise above $10,000 per tonne, though cautious market participants said that high inventory levels could limit the alloying metal’s price gains.

Catch up with the latest price moves on the exchanges with our rolling price report.

Exchange news also came from JP Morgan. The bank withdrew from the LME’s open outcry trading floor, and will continue to service its clients as a category two member of the bourse.

The departure might not have been a surprise for some, but it has left the market wondering how the LME’s membership landscape might look this time next year.

Meanwhile, Credit Suisse will deal on the LME via its Credit Suisse International subsidiary from Friday September 11. Details are here.

Some 77,350 tonnes of zinc in LME warehouses in New Orleans were made available as cancelled warrants for the material were reissued on Thursday. James Heywood had the story.

In the copper market, Codelco’s contract workers blocked access roads to five if its seven copper mines, resuming strike action after talks between the parties collapsed. By Thursday the mines were operating normally, the world’s largest copper producer said.

The company also sold a record $2 billion of 10-year bonds, seeking to finance its ambitious investment plan amid falling copper prices.

News also came from Peruvian zinc-sliver miner Volcan Cia Minera: the company is taking additional steps to cut costs and ensure a balanced cash flow amid the significant drop in metals prices.

In other company news, troubled Evraz Highveld Steel and Vanadium delayed the announcement of its preferred bidder.

Price news came from China Minmetals Nonferrous Metals and Ganzhou Tungsten Assn. Both companies announced that they are cutting their tungsten concentrate prices for September.

Meanwhile, Xiamen Tungsten, China’s largest tungsten smelting and processing company, announced it is to pay 922.4 million yuan ($144.8 million) to acquire a 32.36% stake in Jiangxi Jutong. Rena Gu had the story.

Noble alloys prices fell further, with sellers lacking optimism over an upside in the near future.

Staying with the ores and alloys, Janie Davies was reporting from Metal Bulletin’s Ferro-alloys & Chromite Conference in South Africa. Here’s an overview of sentiment at the event.

Siyanda Chrome Smelting Co could start producing low-cost ferro-chrome in South Africa by 2018, according to the company’s ceo, David Kovarsky.

In aluminium news, Rio Tinto plc is dropping the name “Alcan” from its aluminium division as it brings “the aluminium product group of Rio Tinto” in step with the entire company.

Century Aluminum is to curtail one potline at its Hawesville, Kentucky aluminium smelter, reducing output to about 60% of capacity.

An appeal by the China Nonferrous Metals Industry Association for the Chinese government to remove a longstanding 15% tax on primary aluminium exports has been met with criticism by the Aluminum Association.

And finally, James Heywood looked at Umicore’s focus on rotary ITO (indium tin oxide) targets, and the growth of China’s display screen industry.

Charlotte Radford 
Twitter: @CRadford_MB

Charlotte Radford



Charlotte Radford

September 11, 2015

18:30 GMT