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Nickel futures up 0.26% on spot demand, overseas cues

New Delhi : Nickel prices moved up by 0.26 per cent to Rs 898.70 per kg in futures market after speculators enlarged their position amid increased demand in spot market from alloy-makers.

Besides, a firming trend in the base metals pack at the London Metal Exchange (LME) also supported the upside.

At the Multi Commodity Exchange, nickel for delivery in November gained Rs 2.30, or 0.26 per cent, to Rs 898.70 per kg in business turnover of 13 lots.

Similarly, the metal for delivery in October rose by Rs 1.90, or 0.21 per cent, to Rs 891 per kg in 359 lots.

Market analysts said increased domestic demand from alloy-makers and reports of a firming trend in copper and other base metals at the LME were responsible for the rise in nickel prices at futures trade.

Agata Nickel Project Pilot Plant Commissioned, Operation Commenced

Mindoro Resources Ltd. is pleased to report that its joint venture partner, TVI Pacific Inc., has announced that, as a result of positive bench-scale test work carried out at the Agata Nickel Processing Project, it has commissioned and commenced operation of pilot-plant testing which will further define the technological parameters to be used in producing a Bankable Feasibility Study with the goal of building a commercial processing plant.

The positive test work on nickel (Ni) laterite ore, from the Agata nickel laterite deposit, confirms the Agata ore is highly amenable to acid leaching with a high rate of nickel extraction achieved at a low acid consumption rate. The process technology TVI is developing, and which has produced these results, aims to achieve maximum nickel recovery and low acid consumption which translates into increased metal production and lower operating costs.

Highlights:

  • Extractions of 94% nickel achieved
  • Agata ore highly amenable to acid leaching
  • Low acid consumption rate of 650 kg/t ore
  • More than 70 leach tests concluded to date
  • TVI pilot plant testing expected to be completed during Q3 2013

"We are extremely pleased with the results achieved," said Mr. Cliff James, Chairman and CEO of TVI Pacific Inc. "The process being developed could position the proposed Agata nickel processing plant amongst the lower cost producers."

The Agata Processing Project is located in Agusan del Norte province, within the Surigao mining region on the island of Mindanao, Philippines. The Surigao region is a major nickel producing region providing ore to processing plants in Australia, China, Korea and Japan.

Nickel Reaches 8-Week High as Export-Ban Prospect Spurs Buying

Nickel touched an eight-week high in London as investors purchased the metal to close out bets on lower prices amid prospects for Indonesia, the world’s biggest producer, to bar ore exports.

A ban on shipments from Indonesia of ores including bauxite, used to make aluminum, and nickel may take effect next year to aid local processing. Nickel gained today on buying to close out so-called short positions, according to Citigroup Inc. Prices slid 14 percent this year, the most among the six main metals traded on the London Metal Exchange.

“It has been the big short play in the year to date, largely by CTAs,” or commodity trading advisers, David Wilson, an analyst at Citigroup in London, said by e-mail.

Nickel for delivery in three months climbed 1.8 percent to $14,629 a metric ton by 10:32 a.m. on the LME. Prices reached $14,650, the highest since Aug. 22. Copper for delivery in three months rose 0.1 percent to $7,250 a ton and the contract for delivery in December was little changed at $3.302 a pound on the Comex in New York.

Nickel slid this year as stockpiles of the metal tracked by the LME expanded to a record, reaching 231,480 tons today, according to daily exchange data. Open interest, or the number of futures outstanding, fell 4.9 percent last week from a record on Oct. 11 as prices rose 2 percent, suggesting short-covering.

The fee to borrow nickel for a day on the LME touched $7 a ton today, the highest level since March 9, 2012.

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Copper

Copper edged lower on Friday after hitting, its highest in almost a month as investors, following the U.S. Federal.
Reserve's decision to stick to its stimulus program, shifted focus back to fragile fundamentals.

Ickel Prices Moved Down By 0.85 Per Cent to Rs 868.20 Per Kg in Futures Trade

New Delhi : Nickel prices moved down by 0.85 per cent to Rs 868.20 per kg in futures trade today due to sluggish demand from alloy-makers in the spot market amid a weak global trend.

At the Multi Commodity Exchange, nickel for delivery in September declined by Rs 7.40, or 0.85 per cent to Rs 868.20 per kg in a turnover of 1,228 lots.

Similarly, the metal for delivery in October traded lower by Rs 6.80, or 0.77 per cent to Rs 878.20 per kg in 143 lots.

Globally, nickel slid 1.30 per cent to USD 13,885.00 a tonne on the London Metal Exchange (LME).

Analysts attributed the fall in nickel prices at futures trade to subdued domestic demand, particularly from alloy-makers, and a weak trend in copper and other base metals at the global market after Chinese imports fell, suggesting demand by the largest consumer may be weaker than estimated.

Reuters

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Aluminium prices were also set for their third weekly gain in a row on a UK court ruling that halted a London Metal Exchange plan to release backlogged stocks of the metal, while copper continued to consolidate after recent 3-1/2 year lows. Three-month nickel on the London Metal Exchange CMNI3 traded up 1.9 percent to $17,400 a tonne at the close, after earlier striking $17,495 a tonne, its highest since February 20 last year. Nickel has rallied around 25 percent this year, and is on track for its biggest weekly gain since February 2013. Prices for nickel ore, used as a substitute for refined nickel by stainless steel plants, have surged in China since the Indonesian ban on unprocessed minerals came into effect this January. The surge has increased prospects that stainless steel mills will use refined nickel instead of the ore. "Nickel ore stocks have gone up because those holding them are holding them in tighter hands, (so) stainless mills will at some stage start using refined nickel," said Fastmarkets head of research William Adams. But he added: "Nickel is running ahead of itself. People are going to start looking for cheaper sources of nickel, be that LME stockpiles or nickel pig iron (made) using higher cost nickel ore from the Philippines." Rallies in nickel helped some commodity funds to bounce in the first quarter from a 2013 loss. (Full Story) In industry news, breakthroughs in the way BHP Billiton BHP.AX processes nickel ores could help the world's biggest miner find a buyer for its ailing Nickel West division in Australia. (Full Story) In other metals, aluminium CMAL3 traded down 0.5 percent at $1,884 a tonne, after hitting its highest since October at $1,902.50 a tonne, with prices up around 4 percent for the year. Persistently low prices for aluminium have forced production cuts this year just as global demand is finally beginning to perk up. But much of the world's surplus, built up after the financial crisis, is stuck in LME warehouses. A UK court ruling in favour of aluminium giant Rusal 0486.HK dashed a LME plan to unblock its warehousing system that had been set to come into effect in April. (Full Story) "The largest new dynamic in aluminium is Rusal's overplaying of the warehouse business, putting a lid on hopes of extra supply availability for the moment," said analyst Mark Keenan of Societe General in Singapore. Copper CMCU3 closed up 0.2 percent to $6,670 a tonne. It is up nearly 6 percent since hitting a 3-1/2 year low of $6,321 a tonne in March. "Copper got oversold recently but the rebound has been the least energetic. Copper (relative to other metals) is still trading the highest above its cost of production and we are moving into surplus," said Adams. A weak copper price and tighter financing conditions are forcing mining companies to cut or stall spending on exploration to their lowest levels in four years as they focus instead on axing costs and reducing debt. (Full Story) Lead CMPB3 closed at $2,100 a tonne, down 0.6 percent, tin CMSN3 ended 0.1 percent lower at $23,375, and zinc CMZN3, untraded at the close, was bid at $2,025 a tonne, down 0.7 percent.
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London, Feb 18 (reuters) - Copper Rose On Tuesday As Support From A Strong Euro Helped Cushion

The People's Bank of China (PBOC) issued cash-draining forward bond repurchase agreements on Tuesday, sucking 48 billion yuan ($7.9 billion) out of the system, pushing up the cost of money after unexpectedly strong credit growth in January. (Full Story) Three-month copper on the London Metal Exchange CMCU3, untraded in rings, was last bid at $7,190 a tonne before the close, from a last bid of $7,170 on Monday. "The PBOC’s decision is predominantly on traders' minds today," Naeem Aslam, chief market analyst at Ava Trade in Dublin, said. "Given that the Chinese growth (rate) is already a major concern for many, the reduction in liquidity by the PBOC is not helping the metal." China is the biggest consumer of copper, which is used in construction and power cables. It imported record volumes of copper last month, partly for consumption and partly to ease tight credit conditions. Goldman Sachs sees Chinese bonded inventories at 700,000 tonnes, up from 550,000 tonnes since the beginning of the year, it said in a note. The euro hit a seven-week high against the dollar EUR=, which was trading at a six-week low against a basket of currencies .DXY. A weak U.S. currency underpins industrial metals by making it less expensive for foreign investors to purchase dollar-priced commodities. FRX/ "We should see a generally firmer tone in most commodity markets over the short term as softer U.S. macro data should keep the dollar under pressure and provide further support for the (base metals) group," Ed Meir, an analyst at INTL FCStone, said. In the week ahead, the focus will be on the U.S. Federal Reserve's tapering of monetary stimulus, with the release of its minutes on Wednesday, and on China's slowdown, with a purchasing managers' index due on Thursday. (Full Story) Both factors have been behind this year's sell-off in emerging markets. U.S. manufacturing last week recorded its biggest drop in more than 4-1/2 years in January as cold weather disrupted production. It was the latest indication that the world's biggest economy got off to a weak start this year. (Full Story) Global miner BHP Billiton BHP.AX BLT.L topped market forecasts with a 31 percent rise in first-half profit on Tuesday but gave a cautious outlook on Chinese growth. (Full Story) Its copper output grew by 6 percent, and total full-year 2014 production is seen unchanged at 1.7 million tonnes. It also expected the copper market to move back into deficit in the medium term and for supply surpluses in nickel and aluminium to ease. Benchmark three-month aluminium on the LME CMAL3 firmed after producer Alcoa Inc AA.N announced it would close its Point Henry smelter and two rolling mills in Australia, removing around 190,000 tonnes of annual capacity, equal to about 10 percent of the country's total output. (Full Story) The LME three-month aluminium contract closed at $1,766 a tonne from a last bid of $1,732 on Monday. It has risen 1.7 percent so far this month after falling 5 percent last month and more than 13 percent last year. United Company Rusal RUSL.MM, the world's largest aluminium producer, also indicated on Tuesday that its output of the metal could fall to 3.5 million tonnes this year from 3.9 million last year. (Full Story) The announcements underscored the dire market conditions facing producers amid a flood of new Chinese capacity. LME three-month lead CMPB3 closed at $2,173 a tonne, from $2,150 at Monday's close, tin CMSN3 closed at $23,150 per tonne from $23,125 and zinc CMZN3 ended at $2,068 a tonne from $2,059 at the close on Monday. Nickel CMNI3, untraded at the close, was bid at $14,460 a tonne from $14,385.

"good News And Will Eventually Support Nickel Prices"

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By Andy Home

Feb 28 (Reuters) - Indonesia's January ban on the export of nickel ore is, according to French nickel producer Eramet, "good news and will eventually support nickel prices".

Eramet Chairman and Chief Executive Patrick Buffet's view, expressed in the company's annual results release, that the ban "is a positive step towards restoring market balance" pretty much sums up the consensus view of the market.

After all, the January halt to flows of nickel ore to China's giant nickel pig iron (NPI) sector puts at risk an estimated 482,000 tonnes, or around 25 percent of global supply, according to estimates by analysts at Macquarie Bank. ("Indonesian Ore Ban - a Q&A", Jan. 14, 2014)

The ban is a potential game-changer for a market that is suffering from chronic low prices resulting from high stocks and supply surplus.

The collective expectation, and hope for other nickel producers, is that the ban will over time generate two interlinked bullish trends.

If Chinese buyers up their intake of ore from the Philippines, the only other viable source, the lower quality of that ore will push up the cost of NPI production, effectively lifting the global cost curve.

Then, since it is extremely doubtful that the Philippines can fully replace Indonesian supply, China's NPI producers will start to cut production as their stockpiles run out. That raises the prospect of the country turning to more traditional forms of nickel to keep its stainless steel sector humming.

It's an attractive narrative, so much so that the rest of the nickel world is betting big on the Indonesian ban staying in place.

Nickel Up On Firm Global Cues, Spot Demand The Metal Prices For January Delivery Traded Higher By Rs

Nickel prices rose by Rs 5.10 to Rs 855.60 per kg in futures trading today as speculators enlarged positions, taking positive cues from the global markets.

A firm trend at the domestic spot markets on the back of increased demand from alloy-makers also influenced prices.

At the Multi Commodity Exchange, nickel for delivery in December traded Rs 5.10, or 0.60%, higher at Rs 855.60 per kg in business turnover of 722 lots.

Similarly, the metal prices for delivery in January traded higher by Rs 5.20, or 0.58%, to Rs 864.20 per kg in 33 lots.

Market analysts said a firming trend in copper and other base metals overseas after the Asian Development Bank raised China's 2013 economic growth forecast to 7.7% from 7.6% in October and increased its 2014 estimate to 7.5% from 7.4%, mainly led to rise in nickel futures.

Besides, increased buying by speculators on pick-up in demand from alloy-maker in the spot market.
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si???con prices start to rnove up In China on tight spo

Export pr???es of s"???on meta???5?? 5?? 3grade are in the range of$2,06???2,100/t nneF0B Chna,and about$2,160-2,200/tonne F0BC"na for s???Con meta???4-4?? 1g???deExport pr???es of s"???on meta???5?? 5?? 3grade are in the range of$2,06???2,100/t nneF0B Chna,and about$2,160-2,200/tonne F0BC"na for s???Con meta???4-4?? 1g???de

Nickel Was Steady On Friday and Notched Up A 6 Percent Rise This Week, Its Biggest Weekly Gain In Al

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London, Jan 17 (Reuters) - Nickel was steady on Friday and notched up a 6 percent rise this week, its biggest weekly gain in almost a year, after Indonesia banned exports of ore last weekend. Indonesia is the world's largest exporter of nickel ore. Prices for refined metal surged this week as traders bet that rising costs for producers of nickel pig iron, a low-cost alternative to refined nickel for makers of stainless steel, will lift the floor for LME nickel prices. "Nickel has had an extremely good run. It's not surprising to see a correction," BNP Paribas analyst Stephen Briggs said. A drop in exports may pile up more pressure on Indonesia's slowing economy, forcing the government to water down its policy, some industry sources said. "Nickel's gains may just have been an initial reaction to the export ban and we could see it wash out a bit over the coming weeks," James Glenn, an analyst at National Australia Bank in Melbourne, said. "There are plenty of stockpiles in China that should act as a bit of a buffer. But people will probably be watching the Indonesian (economic) numbers to see if there is any hint of distress from the export policy," he added. Indonesia's nickel production will decline by 84 percent from last year to 9 million tonnes this year, the chief economic minister said on Thursday, as the ban hits home. Three-month nickel on the London Metal Exchange CMNI3, closed flat at $14,695 on Friday, unchanged from the close on Thursday. The metal posted its biggest weekly rise since early February 2013. In other metals, three-month copper on the LME CMCU3 closed at $7,341 from a close of $7,310 on Thursday. The metal has been underpinned by a nearby shortfall of refined metal, with traders holding off on purchases ahead of the Lunar New Year which starts at the end of the month. Expectations of global growth have fanned hopes that metals' fortunes may revive, although recovery is still tilted towards rich nations which use less metal than emerging economies. A much better year lies in store for most of the world's major developed economies, although weak inflation will persist, complicating central banks' ability to get interest rates back to normal, Reuters polls forecast on Thursday. Traders have already noted a recovery in demand for zinc, used in galvanising, in Europe. "For the first time in months (if not years) we are seeing offers emerge for zinc on warrant in LME warehouse in Antwerp and Rotterdam," London-based broker Triland said in a note. "There is immediate buyer interest in these warrants, so that is encouraging for the state of the zinc market in general." LME benchmark zinc CMZN3 closed at $2,079 from $2,074 at the close on Thursday, tin CMSN3 at $22,355 from $22,425 and lead CMPB3 at $2,208 from $2,197. Aluminium CMAL3, untraded at the close, was last bid at $1,820 from $1,798.

The London Metal Exchange (LME) has approved its first warehouse in Dutch town Moerdijk, part of a t

The warehouse, run by Independent Commodities Logistics BV (ICL), will be listed from March 13, 2014 and will be allowed to store all major base metals, the exchange said in a members' notice.Analysts have said the changes in LME warehouse regulations, aimed to reduce backlogs, are expected to spur a resurgence of independent warehouse companies after several years of dominance by big groups such as Goldman Sachs GS.N and Glencore Xstrata GLEN.L. (Full Story)The managing director of ICL, Hans Cleton, told Reuters last month his firm planned to take advantage of the new rules and attract customers looking for an alternative and neutral place to store metals.
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REUTERS

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Royalties were set at 2 percent in the deal and could rise to as high as 3 percent, more than double the previous 0.6 percent and 0.7 percent, said Nico Kanter, chief executive of Vale's Indonesian subsidiary PT Vale Indonesia TBK INCO.JK. The royalty hike will "definitely affect our bottom line," Kanter told reporters in Indonesia. He didn't elaborate on the impact. Vale officials in Rio de Janeiro were not immediately available for comment. Vale preferred shares, the company's most-traded class of stock, have lost about 20 percent in Sao Paulo in the last 12 months. The shares rose 0.3 percent to 23.08 raise in Sao Paulo on Friday. Vale, which owns 59.2 percent of Vale Indonesia, controls the subsidiary in partnership with Japan's Sumitomo Corp. 8053.T, which owns 20.1 percent, Vale's press office in Rio de Janeiro said. Indonesian investors have already purchased 20 percent of Vale Indonesia. The sale of the additional 20 percent will be done within five years and come out of Vale and Sumitomo's stakes, a Vale press officer in Toronto said in an e-mailed response to questions. The increased costs and obligations come as Vale and other nickel miners face rising intervention by Indonesia's government. The country has banned the export of raw nickel ore, requiring miners to process ore in local smelters. Vale plans to invest $4 billion in Indonesian smelters. Smelters use heat and chemicals to remove oxygen and other elements from the ore, leaving pure, metallic nickel behind. The money will be spent upgrading smelters on the island of Sulawesi, half at Vale's plant at Pomala and the other half at its Sorowako facility, Kanter said. The company is also considering an additional $2 billion investment to increase smelting capacity on Sulawesi, Vale said. Vale executives have recently expressed the belief that increasing costs in countries such as Indonesia would be offset by rising prices for nickel, at least in the short term, as Indonesian policies reduced world supplies of metallic nickel. Like iron ore .IO62-CNI=SI, Rio de Janeiro-based Vale's main product, the price of nickel MNI3 has fallen in recent months. After reaching a two-year high of $21,000 a tonne in May, nickel has fallen 26 percent to $15,575 a tonne. The new agreement with Indonesia also cuts the area of Vale's mineral rights by 38 percent to 118,435 hectares (457 square miles), an area about the size of Hong Kong, from 190,510 hectares, Vale said in a statement. Vale can extend the contract, originally scheduled to expire at the end of 2025, through 2045 with two 10-year renewals.

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Ten years ago, getting to Koira was not easy.

Hundred kilometres to the north of the steel making town of Rourkela, the village was one of the main centres of iron ore mining in Odisha.

Day and night, trucks crawled along the road going downhill – some lugging ore to the railway yards at the foot of the hills, others travelling 300 kilometres to the port at Paradip, from where ore was shipped to China and beyond. With as many as 80-100 trucks moving bumper to bumper, locals struggled to cross the road. Pile-ups were common. Traffic jams took days to clear.

The road itself was a mess. A combination of heavy rains and overloaded trucks had reduced it to a rutted dirt track. And yet, given the insatiable demand for iron ore at the time, the trucks kept moving, kicking up large clouds of red dust as they lurched in and out of potholes and ruts.

Those were the boom years. As countries like China rapidly added infrastructure, ore prices were surging across the world. The price of powdered iron ore rose from around $18/tonne in 2004 to $86/ton by 2009. In India, during this period, the price of ore rose from a few hundreds to as high as Rs 8,000 a ton.

With the market giving such unequivocal signals, ore extraction went through the roof in states like Odisha. From 8.1 million tons of ore in 1994-''95, before the boom started, the production reached 70 million tons in 2008-''09. That year, exports stood at 16.3 million tons – twice the state''s total production just 15 years ago.



Koira was one of the ground zeros of this boom. Once a tiny village surrounded by forests, it had been taken over by the trucking economy. Lured by miners willing to pay high rates for every ton of ore transported down, truckers were flooding in from as far away as Uttar Pradesh. Miners were bribing them to take quicker routes, or paying bonuses to those who did multiple trips in a day.

Walking down the main street at that time, visitors saw, through a fine, omnipresent red dust, the mushrooming of new businesses – rooms for truckers, shops selling truck spares, roadside repair shops, a new hotel with a liquor license.

In all, Koira had the air of a frontier town in the middle of a gold rush.

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VICE-PRESIDENT Emmerson Mnangagwa says government will soon launch a special purchase vehicle (SPV) to enable it to buy chrome ore directly from miners and smelters at international market prices and sell it to Russia for maximum benefit to the country.

BY BLESSED MHLANGA

Speaking at the official opening of a South African retail store in Kwekwe last Friday, Mnangagwa said government had realized that middlemen were shortchanging both miners and government, hence the decision to sideline them.

“We will establish an SPV of the government which will purchase chrome at international prices . . . We have a market for that product in Russia,” Mnangagwa said.

 

Mnangagwa has previously accused major chrome smelter Zimasco of sabotaging the economy by selling chrome through middlemen who then diverted the resources. He also warned Zimasco and ZimAlloys that they risked losing their chrome ore reserves which they were allegedly holding onto for speculative purposes.

“They pegged the whole country and are now thinking they are the rightful owners of the chrome ore reserves, but in government we are saying if you don’t use it you will lose it and those who can use it among you should go and take it,” he said.

Zimbabwe currently sits on nearly a billion metric tonnes of chrome ore reserves which lie untapped along the Great Dyke.

“From that billion, as government we are going to allow just 30 million to be mined and exported in its raw form and at the current rate of extraction it could take you 15 years,” he said.

Chrome smelting companies in the Midlands which include Zimasco, Zimalloys and Oliken Ferrochrome have been hit hard by low world market prices of the metal and rising costs forcing them to cut production and trim their workforce.

Zimasco recently sent home 645 workers with 400 being axed from its main smelting plant in Kwekwe.

Two months ago, government lifted the ban on exports of raw chrome in a move aimed at bringing in the much-needed foreign currency.

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Supported by rising demand from alloy-makers at domestic spot markets, nickel futures traded a shade higher at Rs 680.30 per kg as speculators enlarged positions.

At the Multi Commodity Exchange, nickel for delivery in August was up by just 50 paise, to Rs 680.30 per kg, with a business turnover of 871 lots.

Metal for delivery in September traded edged up by 40 paise, or 0.06 per cent, to Rs 686.70 per kg, with a turnover of 62 lots.

Marketmen attributed the rise in nickel prices in futures trade to a firm demand from consuming industries particularly alloy-makers amid metal''s strength at the London Metal Exchange.

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MUMBAI: Is the pain over for India Inc? With falling commodity prices, rising demand and more projects getting completed, industry is poised to see a revival in earnings growth, say analysts.

Corporate earnings have been weak over the last four years, with profits at a historical low of 4.2% to GDP in the fiscal year ended March 31, 2015, compared with an average of 5.3% in the last five years. The past two quarters have seen a sharp increase in analysts cutting earnings forecast on companies, with the average FY16 earnings estimate falling 13% year-to-date.

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* Nickel, copper hit multi-year lows

* U.S. crude slides more than 2 pct, gold down nearly 1 pct

* Dollar hits 7-month high vs euro

By Manolo Serapio Jr

MANILA, Nov 23 Copper and nickel tumbled to multi-year lows and oil extended losses on Monday as commodities bore the brunt of another selloff, reflecting growing worries over China''s economic fate and a strengthening dollar.

The selloff mostly focused on base metals as London nickel slid nearly 6 percent to its lowest since 2003 and copper fell almost 3 percent to its cheapest in more than six years.

Oil was not spared, with U.S. crude sliding as much as 2.2 percent, while gold came close to a near 6-1/2-year trough as a looming U.S. interest rate hike and a resultant firm dollar continued to blunt the bullion''s safe-haven appeal.

Persistent fears that China, a top consumer of many commodities from copper to iron ore and rubber, "might stumble a bit more" are feeding the selling frenzy, said Vishnu Varathan, senior economist at Mizuho Bank in Singapore.

"So the entire confluence suggests that commodities are probably going to be about the worst hit in the asset space," said Varathan.

On the London Metal Exchange, three-month copper hit a low $4,461.50 a tonne before recovering slightly to $4,469 by 0420 GMT, off 2.4 percent from the previous session.

LME nickel fell as far as $8,235 a tonne and was down 4.6 percent at $8,330, while zinc slid 3 percent to $1,511.50 a tonne, having dropped below $1,500 last week for the first time since 2009.

The losses in nickel and zinc mirror the weakness in China''s vast steel sector. China''s apparent consumption of crude steel continued to shrink this year after falling in 2014 for the first time in more than a decade as a slowing economy hit industrial demand.

The fall in zinc prices came despite major Chinese zinc smelters saying they will slash output by 500,000 tonnes next year, almost a fifth of their output.

Shanghai rebar steel futures dropped to a record low on Monday.

Low profitability has cut the utilisation rate among Chinese steel mills and that will "worsen oversupply of iron ore", said Helen Lau, analyst at Argonaut Securities in Hong Kong.

In Tangshan in China''s top steel producing Hebei province, utilisation rate stood at 81 percent, a six-year low, said Lau.

Also hit by selloff, U.S. crude dropped to below $41 a barrel, while Brent fell as much as 1.4 percent to just above $44 as oversupply worries persisted.

Spot gold slipped nearly 1 percent to a session low of $1,067.85, not far above last week''s $1,064.95, its weakest since February 2010.

With Chinese credit not picking up "it''s quite difficult to convince people that on the ground demand will pick up", said Varathan, also citing weak trade statistics. (Reporting by Manolo Serapio Jr.; Editing by Himani Sarkar)

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Informa: What are the top 3 factors that Wood Makenzie believe will impact the outlook for Nickel pricing in 2016?

AD: China and its economic outlook are always a major driver of nickel prices – nickel demand is generally viewed as being poor at the moment, particularly with the perceived “slow down” in Chinese growth and its change to a demand driven economy. Any “good news” out of China tends to have a positive impact on all commodities, including nickel. The current elevated levels of nickel stock we believe will be a buffer to any significant price rise this year. Indeed, until these are reduced to more “normal levels” through producer discipline these could have a longer term influence on stemming any significant price rise. Near term one of the biggest drivers of nickel price movement is sentiment. As already mentioned, any good news on the Chinese economy can quickly lead to quite sharp price rises. Overall, we forecast little in the way of upside for the nickel price in 2016 and maintain our forecast at around $8800/t as an average for the year.

Informa: Nickel prices have made a small recovery in recent weeks, what do you believe needs to happen for the market to sustain a recovery?

AD: A sustained recovery in nickel prices will only occur if producer cutbacks continue so that global nickel stocks can be worked down to more acceptable levels. This would provide a greater fundamental justification for prices to move above the $4.00/lb to $4.20/lb range that we are currently forecasting until the end of 2017.

Informa: China announced plans to reduce Nickel smelter production by 20% in 2016. What impact do you see this having on the market going forward?

AD: The 20% reduction in output announced by Jinchuan and other Chinese producers shows that Chinese smelters and refiners are sensibly adjusting their production targets. The impact of these cutbacks, if they are sustained, should slowly help to draw down stocks and ultimately provide support to higher prices by the end of 2017. However, there remains much uncertainty around production levels for NPI and so in reality the announcement of the cuts has had little impact on the market and price outlook in the near term.

Informa: Recently there has been speculation in the press that Shanghai trading is impacting the Nickelmarket. What are your views on this?

AD: The SHFE was established originally with 10kt nickel metal capacity across its warehousing system in early 2015. At the end of 2015, capacity was advertised as having expanded to 110kt, and metal held in the system now exceeds 85kt. SHFE is therefore acting as a market of last resort running parallel to the LME, and its rapid capacity expansion is merely facilitating the growth in financed metal stock at a time when the market really needs fewer opportunities to do so. Furthermore, it has also been prone to manipulation by speculators who are using nickel as collateral against loans for other purposes, creating the impression of higher physical demand than truly exists. Recent new regulation has curbed such speculation, but clearly this is an area which requires continued monitoring by Chinese authorities.

Informa: You will speaking at the 13th China Nickel Conference, what are the conversations that you are looking forward to having with your peers at the gathering?

AD: I am very much looking forward to the conference and meeting with producers, traders and governments alike. The nickel industry has experienced extremely challenging market conditions over the last few years and I hope to learn about the strategies producers and consumers intend to adopt in order to navigate through this period.

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Why visit ISF-2017?
  • 1. Almost all leading manufacturers of metal finishing chemicals, Equipments and allied accessories in India show case their products.


  • 2. Multi nationals engaged in metal finishing business will try to tap the Indian market through ISF-2017.


  • 3. Every participant tries to display or promote their products keeping in mind the latest requirement in metal finishing arena thus taking the standard of ISF-2017 to a very high level.


  • 4. Inching towards a pollution free electroplating industry through ideas and concepts put forward by the participating exhibitors.


  • 5. ISF-2017 is the single largest platform for the entire metal finishing industry to unveil their R&D results in the field of surface finishing achieved in the past 3 years.


  • So do not miss this opportunity to visit ISF-2017& enhance your production skills.

Who should Visit?
  • 1. If you are employed in the automotive, cutlery, electrical, electronics, fasteners, hardware, jewellery, plastics, aluminum finishing, nuclear, space, paints, coatings or any other industry connected to surface finishing, in design, purchase, production, quality assurance, marketing, effluent treatment or process control; participate in ISF 2017.


  • 2. If you are conducting research in any area connected to surface finishing and are connected to research organisations or universities or institutes, come to ISF 2017.


  • 3. If you are a student interested in knowing the innumerable opportunities in research and industry in the field to surface finishing, come to ISF-2017.


  • 4. If you are a job shop owner and are looking for new opportunities and contacts, come to ISF 2017.


  • 5. If you are a manufacturer and want to understand the latest technologies and intricacies of surface finishing, come to ISF 2017.

News Headlines

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Metal Finishers'' Association of India

VSIST US AT ISF 2017

DELHI
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News Headlines

Why visit ISF-2017?
  • 1. Almost all leading manufacturers of metal finishing chemicals, Equipments and allied accessories in India show case their products.

  • 2. Multi nationals engaged in metal finishing business will try to tap the Indian market through ISF-2017.

  • 3. Every participant tries to display or promote their products keeping in mind the latest requirement in metal finishing arena thus taking the standard of ISF-2017 to a very high level.

  • 4. Inching towards a pollution free electroplating industry through ideas and concepts put forward by the participating exhibitors.

  • 5. ISF-2017 is the single largest platform for the entire metal finishing industry to unveil their R&D results in the field of surface finishing achieved in the past 3 years.

  • So do not miss this opportunity to visit ISF-2017& enhance your production skills.

News Headlines

Why visit ISF-2017:
  • 1. Almost all leading manufacturers of metal finishing chemicals, Equipments and allied accessories in India show case their products.


  • 2. Multi nationals engaged in metal finishing business will try to tap the Indian market through ISF-2017.


  • 3. Every participant tries to display or promote their products keeping in mind the latest requirement in metal finishing arena thus taking the standard of ISF-2017 to a very high level.


  • 4. Inching towards a pollution free electroplating industry through ideas and concepts put forward by the participating exhibitors.


  • 5. ISF-2017 is the single largest platform for the entire metal finishing industry to unveil their R&D results in the field of surface finishing achieved in the past 3 years.


  • So do not miss this opportunity to visit ISF-2017& enhance your production skills.

News Headlines

Click to Zoom
Technical Comment Analysis
  • This year’s rally in zinc prices petered out on February 13 at $2,980.50 per tonne, just $4.50 per tonne shy of the November 2016 high. Overhead supply therefore seems evident ahead of $3,000 per tonne.
  • Having been capped by selling, prices started to consolidate, but consolidation has been followed by further weakness.
  • The double top seem to have become an influential pattern and a H&S has also been triggered at $2,790 per tonne. The count from this would be $225 per tonne, producing a target of $2,565 per tonne.
  • The 20 DMA is now moving lower and the stochastics remain bearish.
  • The overall trend has been bullish for more than a year. It looks set to continue after this correction, which may well be prompting stale long liquidation.
  • The UTL is at $2,626 per tonne; it will be interesting to see if prices find support ahead of this level or if they go on to reach the H&S target. We would not give up on our overall bullish outlook unless the December low at $2,516 per tonne is breached.

Macro factors

The pick-up in weakness seems to have been driven by a combination dominant overhead supply ahead of $3,000 per tonne and more recently by dented sentiment after China reduced its growth target to 6.5%.

These may be prompting some stale long liquidation – we wait to see what today’s LME COTR data shows. We would not get too bearish while the fundamentals remain strong.

Cancelled warrants have risen, which may signal a pick-up in stock outflow. It also means there are now fewer than 200,000 tonnes of available metal in LME-listed warehouses.

A price correction is constructive because lower prices should entice more buyers back into the market.

Conclusion

Zinc’s fundamentals are strong but LME data shows money managers are not that active so fresh buying pressure may have to come from consumer, who they have been in no hurry to chase prices higher – they may well buy into the dip, though. Overall, we remain friendly to the metal’s outlook and we expect dips to be well supported, especially while availability in LME warehouses is tightening.

All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations
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News Headlines

Click to Zoom
Technical Comment Analysis
  • This year’s rally in zinc prices petered out on February 13 at $2,980.50 per tonne, just $4.50 per tonne shy of the November 2016 high. Overhead supply therefore seems evident ahead of $3,000 per tonne.
  • Having been capped by selling, prices started to consolidate, but consolidation has been followed by further weakness.
  • The double top seem to have become an influential pattern and a H&S has also been triggered at $2,790 per tonne. The count from this would be $225 per tonne, producing a target of $2,565 per tonne.
  • The 20 DMA is now moving lower and the stochastics remain bearish.
  • The overall trend has been bullish for more than a year. It looks set to continue after this correction, which may well be prompting stale long liquidation.
  • The UTL is at $2,626 per tonne; it will be interesting to see if prices find support ahead of this level or if they go on to reach the H&S target. We would not give up on our overall bullish outlook unless the December low at $2,516 per tonne is breached.

Macro factors

The pick-up in weakness seems to have been driven by a combination dominant overhead supply ahead of $3,000 per tonne and more recently by dented sentiment after China reduced its growth target to 6.5%.

These may be prompting some stale long liquidation – we wait to see what today’s LME COTR data shows. We would not get too bearish while the fundamentals remain strong.

Cancelled warrants have risen, which may signal a pick-up in stock outflow. It also means there are now fewer than 200,000 tonnes of available metal in LME-listed warehouses.

A price correction is constructive because lower prices should entice more buyers back into the market.

Conclusion

Zinc’s fundamentals are strong but LME data shows money managers are not that active so fresh buying pressure may have to come from consumer, who they have been in no hurry to chase prices higher – they may well buy into the dip, though. Overall, we remain friendly to the metal’s outlook and we expect dips to be well supported, especially while availability in LME warehouses is tightening.

All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations

News Headlines

Zinc was once again the best performing commodity for the week with LME prices ending at $2,882 a tonne ($1.31 a pound), a 6.7% jump over the last five trading days, outperforming sector bellwether copper''s 3.4% gain for the week.

Zinc, up 12% year to date, is being buoyed by record refined output in China and tight supply after a number of mine closures.

RBC Capital in a recent research note followed others to upgrade its forecasts for the metal. The Canadian investment bank quoted by investment blog Barron''s upped its previous forecast for the zinc price by 8%. RBC believes zinc will advance to $1.35 a pound or $2,976 a tonne over the year.

RBC is generally bullish on industrial metals and steelmaking raw materials saying "commodity price strength could continue into the second quarter driven by improving leading economic indicators and strong seasonality." It singled out zinc as the metal with the "best fundamentals".

Glencore (which RBC rates as an "outperformer") with its financial results release said conditions that saw zinc jump 60% last year should continue in 2017:

[In 2016] the widely anticipated zinc mining output reduction materialised and resulted in significantly tighter physical market conditions, particularly for zinc concentrate. Confirmation of decreasing supply, in combination with better than anticipated demand conditions driven by the recovery of the Chinese real estate and global automotive market, has resulted in destocking of both zinc concentrates and metal during the year and a higher corresponding LME price.

NICKEL 23% HIGH

London Metal Exchange three-month nickel has jumped 23% since the start of June and at a current $14,250 per tonne is trading at its highest level in a year.
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Indonesia¿¿¿s Export Ban Update Drives Nickel Price Rise

Indonesia’s Export Ban Update Drives Nickel Price Rise

After drifting off from a spring high, the nickel price has flatlined in the second quarter (along with much of the rest of the metals complex).

However, the metal has put in a surprisingly strong performance in just the last week due to Indonesia’s announced export ban spooking market concerns about supply, according to the Financial Times.

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Since last week, nickel has reached an 11-month high, jumping 9% to above $14,000 a tonne, the article reports, extending gains since the start of the year to 30%.

In contrast, copper is up just 1.2% in 2019, while aluminum has gained only 2.5%.

Robust demand in China has helped nickel’s overall position this year, but the recent export ban has added fuel to the fire.

Indonesia is the world’s second-largest exporter of nickel ore after the Philippines. In an unexpected move, Jakarta pledged last week to stick with plans to stop exports of unprocessed nickel ore in 2022.

The ban is aimed at encouraging the domestic development of value-added industries, such as refined nickel and even stainless steel production, a policy that has had its ups and downs in recent years but broadly proved successful in encouraging domestic refined metal production.

The Philippines, the top nickel producer, and Indonesia are major ore suppliers to China’s nickel pig iron industry, which currently accounts for some 20% of global nickel production.

Much of the demand for nickel is being driven by stainless steel production in China. So far this year, that demand has been strong. However, as the Financial Times notes, inventories have also been rising, raising questions about the underlying strength of the Chinese market facing the headwinds of a trade war and slowing growth.

Maybe consumers should not be panicking too much about rising nickel prices — a pullback after such a strong rise is likely, especially coming into the summer season when demand in China and western Europe is likely to soften.

Nickel price surges as stockpiles deplete and Indonesia threatens export ban

Nickel’s time to shine may have reappeared with the metal reaching US$14,220 per tonne (US$6.31/pound) this week, as stockpiles continue to diminish, and the electric vehicle and lithium-ion battery revolution picks up pace.

A nickel price resurgence has been forecast for the last few years, with many analysts and nickel miners believing it had finally arrived in 2018, before US President Donald Trump picked a trade war with China, which escalated considerably as the year advanced.

With the US-China trade war causing uncertainty in several commodity markets including nickel, the metal’s price started falling in mid-2018, finally bottoming at US$10,435/t at the start of this year.

Since then, it has slowly begun creeping back, but in late June the rise picked up pace, with the metal reaching US$14,220/t on Wednesday.

Underpinning the rising price are diminishing stockpiles on the London Metal Exchange with stocks sitting at 148,374t on Thursday – down from more than 350,000t less than two years ago.

Jervois Mining (ASX: JRV) executive general manager Michael Rodriguez told Small Caps the stockpile figure represents less than two months’-worth of supply.

He pointed out that LME stockpiles falling below 150,000t this week had also sent a signal to the market, which is in a supply deficit and facing potential shortages.

“The large drop in inventory over such a short period of time is material and speculative buyers have been buying backing higher future prices. Bottom line, nickel has gone bullish after doing very little over the last 12 months,” Mr Rodriguez said.

He added it was time to watch nickel stocks carefully.

“Having said that, low interest rates, changing consumer sentiment and the ongoing trade war between China and the US looks like it’s going to drag well into next year,” he noted.

Nickel strikes 1-yr highs as rally picks up speed

BEIJING - Shanghai nickel prices rose more than 4% in early trade on Thursday to a one-year high, extending a rally for the metal into a ninth day as speculators continue to pile into the Shanghai Futures Exchange.

Nickel, used to make stainless steel and batteries for electric vehicles, is now up more than 30% since the start of this year in Shanghai and is almost 37% higher in London.

FUNDAMENTALS

SHANGHAI NICKEL: The most traded August nickel contract on the ShFE rose as much as 4.1% to 114,770 yuan ($16,692.85) a tonne, the highest since July 4, 2018, and stood at 114,090 yuan as of 0155 GMT.

 

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Abhay Jain(Managing Partner)
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