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Zinc falls, Copper Heads for Its Largest Quarterly Climb in a Year on Weakening Dollar
By Anna Stablum - Sep 30, 2010 6:04 AM PT
Copper, little changed in New York and London, headed for its biggest quarterly gain in a year, bolstered by a slumping dollar and the largest drop in stockpiles of metal since the second quarter of 2009.
The U.S. Dollar Index, a six-currency measure of the greenback’s value, has slid 8.7 percent this quarter. A weaker dollar makes metals priced in the currency cheaper in terms of other monies and encourages demand for raw materials as an alternative investment. Copper inventories tracked by the London Metal Exchange dropped 17 percent in the quarter.
“The main factor has been the depreciation of the dollar, which continues to fall,” Alex Heath, head of industrial-metals trading at Royal Bank of Canada Europe Ltd. in London, said by phone. “We could easily see higher prices.”
Copper for delivery in December slipped 0.05 cent to $3.661 a pound at 8:39 a.m. on the Comex in New York. The most-active contract is up 24 percent for the quarter. Prices yesterday reached the highest intraday level since April 12. Copper for delivery in three months fell 0.2 percent to $8,047 a ton on the LME.
The dollar index is on course for the biggest drop since 2002’s second quarter. The currency has retreated as economic figures indicated a faltering recovery and the Federal Reserve pledged to take more steps to aid growth if needed.
Inventories Contract
“It does appear as if the government there is ready to apply quantitative easing again in order to stimulate growth,” Heath said, referring to asset purchases by the Fed.
LME copper stockpiles fell for a fourth day to 374,150 tons, the lowest level since Nov. 4, daily exchange figures showed. Inventories posted a 31st weekly drop in a row last week and have slid 26 percent this year, on course for the first annual contraction since 2004. Stocks shrank for a seventh straight month in September.
Copper stockpiles monitored by the Shanghai Futures Exchange fell 6,918 tons to 87,447 tons this week, according to the exchange.
Orders to draw copper from LME inventories, or canceled warrants, slid for a seventh day, declining 1.5 percent to 21,750 tons.
Sterlite Industries (India) Ltd., the country’s biggest copper producer, began closing its Tuticorin smelter following a court order for breaching environment standards. Ore mined by the company can be sold elsewhere, helping to augment supply, because India imports most of its needs, said Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London.
Mine Production
“I’d certainly expect them to sell concentrate to other producers, rather than reducing mine output,” he said. Mined copper production accounts for about 5 percent of total finished metal in India, according to estimates cited by Brown.
The current rally has boosted LME copper by 9.1 percent in 2010. Prices gained partly because of increased awareness that supplies of copper concentrate “are going to continue to create a supply deficit both for 2011 and increasingly for 2012,” RBC’s Heath said. Smelters process concentrate to make refined metal.
Copper may climb as high as $8,377 a ton in the first half of October, rising to $8,818 in next year’s first six months, Laredo, Texas-based researcher Harbor Intelligence said in a report. The predictions equate to Comex prices of $3.80 and $4 a pound.
“The structural constraints of the supply side of the copper market are getting increasingly evident and imply a challenging outlook ahead,” Harbor said. “Fundamental, technical and cyclical analyses point out that the underlying picture of the copper market will be bullish for a while.”
Supply Gap
Copper demand will exceed supply by 125,000 tons this year, with the deficit widening to 250,000 tons next year, according to the report.
Tin for three-month delivery on the LME gained 0.9 percent to the day’s high of $24,550 a ton, the highest intraday price since May 22, 2008. The metal is this year’s best LME performer, up 45 percent, beating the 26 percent advance by closest rival nickel. Production disruptions in Indonesia and Democratic Republic of Congo bolstered prices.
Aluminum rose 0.3 percent to $2,347 a ton after reaching $2,350, the highest intraday price since April 26. Nickel was little changed at $23,340 a ton, lead dropped 0.5 percent to $2,288 a ton and zinc fell 0.7 percent to $2,209 a ton.
http://www.bloomberg.com/news/2010-09-30/copper-heads-for-its-largest-quarterly-climb-in-a-year-on-weakening-dollar.html
Zinc slips, Copper Climbs, Advances Above $8,000 a Ton for the First Time Since April
By Anna Stablum - Sep 29, 2010 5:08 AM PT
Copper rose in New York and London, exceeding $8,000 a metric ton for the first time since April, as manufacturing sped up for a second month in China, the world’s largest user of the metal.
A purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics gained to a five-month high of 52.9 from 51.9 in August. Copper climbed as high as $8,038 a ton, the highest intraday price since April 12, in London. Prices also advanced as the dollar weakened.
“I’m slightly surprised at the strength of the PMI,” said Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London. “I’d thought we would have seen a bit more of a pause, given the impact of energy-efficiency measures on some parts of Chinese heavy industry.”
Copper for delivery in December rose 1.5 cents, or 0.4 percent, to $3.652 a pound at 7:57 a.m. on the Comex in New York. Copper for delivery in three months added 1 percent to $8,029 a ton on the London Metal Exchange.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, fell as much as 0.5 percent to an eight- month low on speculation the Federal Reserve will add to monetary easing to bolster the slowing U.S. economy. A weaker dollar makes metals priced in the currency cheaper in terms of other monies.
U.S. Economy
Figures released yesterday showed cooling home prices and weaker consumer confidence in the U.S., the second-biggest copper user. Sales of new homes last month held at the second- lowest level on record, indicating housing remains depressed, data showed on Sept. 24. Construction accounts for a quarter of copper demand, according to the Copper Development Association.
“Any signs of weakness in the U.S., the U.K. and potentially Japan will be seen as an excuse to go for the next round of quantitative easing or currency intervention,” Brown said, referring to asset purchases by central banks.
A separate PMI for Chinese manufacturing that’s backed by the country’s government is scheduled for release on Oct. 1. The index, released by the National Bureau of Statistics and the Federation of Logistics and Purchasing, may rise to 52.5 from an August reading of 51.7, according to the median forecast of 15 economists surveyed by Bloomberg News.
“Just as Western authorities are going for more quantitative easing and competitive devaluation, we might just be surprised by the strength of global growth for the next quarter or so,” Brown said.
Inventories Shrink
European confidence in the economic outlook unexpectedly improved this month, the European Commission said today. An index of executive and consumer sentiment in the 16 euro nations rose to 103.2, the highest since January 2008, from a revised 102.3 in August.
LME copper stockpiles fell for a third day to 375,100 tons, the lowest level since Nov. 4, daily exchange figures showed. Inventories posted a 31st weekly drop in a row last week and have slid 25 percent this year, on course for the first annual contraction since 2004.
Orders to draw copper from inventories, or canceled warrants, slid for a sixth day, declining 5.3 percent to 22,075 tons.
Sterlite Industries (India) Ltd., the nation’s largest copper producer, received a court directive yesterday to shutter its only smelter as the government cracks down on factories breaching environment norms. The company is waiting for the full text of the order before deciding on a course of action, according to an e-mailed statement.
Tin for three-month delivery on the LME rose 1.3 percent to $24,301 a ton after touching $24,390, the highest intraday price since May 22, 2008. The metal is this year’s best LME performer, up 43 percent, beating the 25 percent advance by closest rival nickel. Production disruptions in Indonesia and the Democratic Republic of Congo have bolstered prices.
Nickel was unchanged at $23,175 a ton, while aluminum added 0.8 percent to $2,327 a ton. Lead advanced 0.6 percent to $2,295.25 a ton and zinc slipped 0.1 percent to $2,218 a ton.
To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.
http://www.bloomberg.com/news/2010-09-29/copper-climbs-in-london-exceeding-8-000-a-ton-for-first-time-since-april.html
Zinc declines, Copper Slides for a Second Day Before U.S. Home-Price, Confidence Figures
By Anna Stablum - Sep 28, 2010 5:20 AM PT
Copper fell for a second day in New York and London before a report that may show cooling house prices in the U.S., the world’s second-largest user of the metal.
Property values in 20 cities increased 3.1 percent in July from a year earlier, below the 4.2 percent gain in the 12 months to June, according to the median forecast of 28 economists surveyed by Bloomberg News. Separate figures may show consumer confidence in the U.S. weakened.
“Good U.S. consumer-confidence and house-price data are crucial for metals and other risk assets to avoid further losses today,” said David Thurtell, a Citigroup Inc. analyst in London.
Copper for delivery in December dropped 1.8 cents, or 0.5 percent, to $3.579 a pound at 8 a.m. on the Comex in New York. Copper for delivery in three months slid 0.6 percent to $7,861 a metric ton at on the London Metal Exchange. All of the six main metals traded on the LME retreated except tin.
The S&P/Case-Shiller home-price figures are scheduled for release at 9 a.m. in Washington. Construction accounts for a quarter of copper demand, according to the Copper Development Association.
A report from the Conference Board due an hour later may show its index of consumer confidence slipped to 52.1 from an August reading of 53.5, according to analysts surveyed by Bloomberg.
Dollar Movement
Prices slid as the euro weakened against the dollar before rebounding. Metals “tracked the dollar so far today, coming under pressure during the morning before stabilizing,” Leon Westgate, an analyst at Standard Bank Plc in London, said in a report. A stronger U.S. currency makes dollar-priced metals more expensive in terms of other monies.
Signs of stronger German consumer confidence suggested that debt concern was “not affecting consumers in Western Europe’s largest economy,” Citigroup’s Thurtell said. Market researcher GfK AG said today its index of German consumer sentiment will rise to 4.9 from a revised 4.3 in September.
At the same time, consumer confidence fell to the lowest level in 14 months in South Korea, the Bank of Korea said. The country is the fourth-largest copper user after China, the U.S. and Germany.
“Over the last few months, the economic outlook has been unusually uncertain,” leading physical users of industrial metals to defer buying, Tobias Merath, an analyst at Credit Suisse Group AG, said in a report yesterday. “Now local stockpiles are depleted and consumers are buying again in the market,” he said.
Wider Contango
Immediate-delivery copper’s discount to the three-month price, the so-called contango, widened to $4 a ton from $2.50 yesterday, according to LME figures. The gap was as wide as $16 as of Sept. 15. A shrinking discount for near-term prices in relation to longer-dated contracts may signal concern about scarcity.
“The futures curve is flattening, particularly at the front end, suggesting that physical availability is gradually drying up,” Merath said. “Accordingly, supply growth is unable to keep up with demand, leading to a further tightening of the market balance.”
LME copper stockpiles fell for a second day to 375,275 tons, the lowest level since Nov. 4, daily exchange figures showed. Inventories posted a 31st weekly drop in a row last week and have slid 25 percent this year, on course for the first annual contraction since 2004.
Tin Climbs
Orders to draw copper from inventories, or canceled warrants, slid for a fifth day, declining 4 percent to 23,300 tons.
Tin for three-month delivery on the LME rose 0.5 percent to $23,760 a ton. The metal is this year’s best LME performer, up 40 percent, beating the 23 percent advance by closest rival nickel. LME inventories dropped for a third day to 13,500 tons, the lowest level since May 13, 2009, and down by almost half since the start of this year.
Cash tin yesterday traded $2 above the three-month contract, the market’s first so-called backwardation since Sept. 1. Immediate-delivery metal was at a $14 discount to the three- month price on Sept. 23.
Nickel slid 1 percent to $22,850 a ton. Cash metal’s backwardation compared with the three-month price yesterday swelled to $27 a ton, the widest level since Sept. 1, 2009, according to LME data. Immediate-delivery nickel was at a discount of $8 as recently as Sept. 22.
Aluminum fell 1.1 percent to $2,269 a ton, lead dropped 0.8 percent to $2,251 a ton and zinc declined 1.7 percent to $2,170 a ton.
http://www.bloomberg.com/news/2010-09-28/copper-slides-for-a-second-day-before-u-s-home-price-confidence-figures.htmlZin
Zinc drops, Copper May Decline as Prices at Five-Month High Spur Selling by Investors
By Anna Stablum - Sep 27, 2010 5:41 AM PT
Copper may fall in New York and London as prices at a five-month high spur some investors to sell the metal and a stronger dollar reduces the appeal of commodities as an alternative investment.
Copper rose as high as $3.644 a pound, the highest intraday level since April 12, on the Comex in New York. The euro slipped against the dollar before Ireland discloses the cost of bailing out Anglo Irish Bank Corp. A stronger U.S. currency makes dollar-priced metals more expensive in terms of other monies.
“Some profit-taking on the back of the strong run of the last week, a rising dollar and heavy resistance at the $8,000 mark” pulled prices down, Eugen Weinberg, an analyst at Commerzbank AG, said today by phone. London Metal Exchange prices climbed as high as $7,990 a metric ton last week.
Copper for delivery in December slipped 0.15 cent to $3.6165 a pound at 8:24 a.m. on the Comex. The most-active contract added 2.7 percent last week. Copper for delivery in three months was little changed at $7,943 a metric ton on the LME.
Prices climbed 3.9 percent on the Comex in last week’s final three days, when financial markets in China were closed for the Mid-Autumn Festival. The country is the world’s largest consumer of copper.
“The Chinese have made a tentative start after returning from their holidays,” Leon Westgate, an analyst at Standard Bank Plc in London, said today.
$8,000 a Ton
Copper needs “something quite special” for prices to exceed the “historic resistance level” of $8,000 a ton, Citigroup Inc. analysts led by Jon Bergtheil in London said in a report today. The metal last rose above that price on April 12, according to data compiled by Bloomberg.
“That something special could be some dramatically good economic news,” the analysts said. They assessed the chance of that happening at 25 percent, gave the same odds to a potential “sharp” decline in copper inventories, and put the probability of a weakening of the dollar at 50 percent.
“On the balance of these probabilities, then, we believe it is likely that copper will at best ‘pause’ for a while,” Citigroup said. The analysts also considered the chance that prices might fall by around $1,500 a ton before they “justifiably advance through old highs,” the report shows.
The euro slid from a five-month high against the dollar on speculation European banks will need more funds. Irish Finance Minister Brian Lenihan, who said Sept. 22 that costs to bail out Anglo Irish will be “manageable,” is scheduled to publish the latest estimates by Oct. 1.
Smaller Inventories
LME copper stockpiles fell 0.6 percent to 378,125 tons, the lowest level since Nov. 4, daily exchange figures showed. Inventories posted a 31st weekly drop in a row last week and have slid 25 percent this year, on course for the first annual contraction since 2004.
One party held between 30 percent and 39 percent of the stockpiled metal as of Sept. 23, and another party accounted for between 40 percent and 49 percent.
Orders to draw copper from inventories, or canceled warrants, fell for a fourth day, declining 6.4 percent to 24,275 tons.
Tin for three-month delivery on the LME rose 0.7 percent to $23,775 a ton. It touched $23,950 in the prior session, the highest intraday price since May 28, 2008. The metal is this year’s best LME performer, up 40 percent, beating the 25 percent gain by closest rival nickel. Production disruptions in the Democratic Republic of Congo and Indonesia bolstered prices.
A tailings dam at Zijin Mining Group’s Xinyi Yinyan tin mine broke on Sept. 21 after a landslide triggered by heavy rains from Typhoon Fanapi, the Fujian-based company said in a statement yesterday.
Nickel rose 1.1 percent to $23,162 a ton and aluminum was little changed at $2,319 a ton. Lead dropped 0.5 percent to $2,285 a ton and zinc declined 0.9 percent to $2,227.75 a ton.
http://www.bloomberg.com/news/2010-09-27/copper-drops-as-some-investors-sell-following-advance-to-five-month-high.html
They kicked a bashers @$$ in court!
That just appeals to me! Score one for the good guys!
Farallon Announces Internet Defamation Case Award
$425,000 Awarded by The Supreme Court of B.C.
April 22, 2010, Vancouver, BC -- Dick Whittington, President and CEO of Farallon Mining Ltd. ("Farallon" or the "Company") (TSX:FAN) is pleased to announce that on March 30th , 2010, Farallon Mining Ltd., Farallon's Chairman Ronald Thiessen and Hunter Dickinson Inc., were awarded a total of $425,000 in a defamation case brought by the Company against Mr. Robert Butler.
Farallon Mining, on behalf of all the Plaintiffs, filed a lawsuit against Mr. Butler on October 5th, 2004 for posting various defamatory statements on the website at www.stockhouse.com. On March 30th, 2010, the Honourable Madam Justice Wedge of the Supreme Court of British Columbia, awarded each of the Plaintiffs general and punitive damages, while Mr. Thiessen was also awarded aggravated damages. The total damages awarded against Mr. Butler are $425,000. Madam Justice Wedge also awarded costs against Mr. Butler, as well as ordering a permanent injunction against him, restraining him from publishing any further defamatory statements against the Plaintiffs. The Plaintiffs intend to vigorously pursue enforcement of the Order against Mr. Butler to the full extent permitted under the law.
Dick Whittington said: "This is amongst the highest awards of its kind in Canada and will hopefully restrain others from issuing unfounded defamatory statements against companies that are trying to legitimately create value for shareholders, stakeholders and mining communities around the world. Farallon has been the subject of defamatory allegations for some time and our intention has always been to expose those making these allegations and then apply the rules of law to seek compensation. I am very pleased that the Court has ruled so convincingly in our favour. Shareholders can be assured that we will continue to be vigilant in defending their interests against such libellous accusations in the future. We stated we would bring those involved to justice and while it has taken longer than anticipated, in the end, justice has prevailed."
Further details of the Court Order are posted on the Company's website at www.farallonmining.com. The Company was represented in this action by Tom Hakemi of Hakemi & Company Law Corporation.
Farallon operates the G-9 zinc mine on its Campo Morado Property in Guerrero State, Mexico. G-9 is a 1,500 tonnes per day, underground, zinc mine with important by-product credits of copper, gold, silver, and lead. The Company is targeting to produce at an annualized production rate of 120 million pounds of zinc and 15 million pounds of copper per year.
For further details on Farallon Mining Ltd., please visit the Company's website at www.farallonmining.com or contact Neil MacRae, Investor Relations Manager, at (604) 638-2160 or within North America at 1-877-688-2050.
ON BEHALF OF THE BOARD OF DIRECTORS
J.R.H. (Dick) Whittington
President & CEO
No problem Hunt, I can delete it out as a duplicate.
Thanks Huntewr7 ! Welcome to one of the better kept secrets in mining!
I think there's gonna be a second mine before too long.
"Dick Whittington said "The completion of a PFS on the historical deposits at Campo Morado is the first step in unlocking shareholder value from the nearly 1 million ounce of contained gold and 60 million ounce of contained silver in these resources2 with the objective of having a second mine in operation at Campo Morado by July 1, 2013."
These guys produce !
They are gonna put out 26,000 ounces of gold and 2.5 million ounces of silver this year and that's a by product!
The main thing is Zinc and Copper!
I'd love to see them add a gold and silver mine to the operation because they have already proven they can bring a mine in on time and within budget.
I think the upwards trend in precious metals prices will support the expansion CEO Whittington was referring to.
Glad you are here Huntewr7.
the cork, Thanks for guiding me here. Looks like what i am looking for. Will pick up a position here as powder allows. A little concerned in that they seem to be a 1 mine co. They need to get some other projects in process. Can you comment on this. A person mark for you.
Farallon Mining Target Raised To C$0.80 From C$0.70 By Cormark >FAN.T
Last update: 9/24/2010 7:29:11 AM
http://custom.marketwatch.com/custom/tdameritrade-com/html-story.asp?guid={ccd8a7dd-9b47-49a8-8ee8-76fb170070c7}
Zinc slips, Copper Drops From Five-Month High, Paring Weekly Advance, on U.S. Economy
By Glenys Sim - Sep 23, 2010 6:58 PM PT
Copper declined from a five-month high, paring a second weekly advance, as an increase in U.S. jobless claims signaled the recovery in the second-largest user may stall, damping demand. Zinc and aluminum dropped.
The three-month contract on the London Metal Exchange fell as much as 0.6 percent to $7,835 a metric ton, and traded at $7,873 at 9:48 a.m. in Singapore. The metal climbed to $7,909 a ton yesterday, the highest price since April 16. December- delivery copper on the Comex division of the New York Mercantile Exchange shed 0.2 percent to $3.5820 a pound.
“Today, economic data will be in the focus again, with U.S. durable goods orders and German IFO business climate,” Credit Suisse Group AG analysts including Stefan Graber, wrote in a note to clients today. “Weaker-than-expected figures could trigger a minor pullback in the sector.”
Copper is still up for a second week, by 1.8 percent, as the dollar weakened on prospects for a further easing of U.S. monetary policy by the Federal Reserve to bolster the economy. The dollar, little changed against a six-currency basket, including the euro, is heading for a second weekly drop.
Economists forecast orders for U.S. durable goods dropped in August, giving the U.S. Central Bank more reason to keep borrowing costs low. Business confidence in Germany probably fell from a three-year high in September as a global slowdown damped the country’s export-driven recovery.
Aluminum in London fell 0.4 percent to $2,282 a ton, zinc lost 0.7 percent to $2,233.75 a ton, lead dropped 0.2 percent to $2,270 a ton, and nickel shed 0.7 percent to $22,600 a ton. Tin hadn’t traded.
http://www.bloomberg.com/news/2010-09-24/copper-drops-from-five-month-high-paring-weekly-advance-on-u-s-economy.html
Zinc climbs, Copper, Near Five-Month High, May Rise as Stocks Head for 31st Weekly Drop
By Nicholas Larkin and Glenys Sim - Sep 23, 2010 6:09 AM PT
Copper, little changed near a five- month high in New York, may gain as stockpiles of metal head for a 31st weekly drop in a row, signaling steady demand.
London Metal Exchange copper inventories declined to near the lowest level since November, and cash metal’s discount to the three-month contract shrank. Figures due today may show a gain in sales of existing homes in the U.S., the world’s second- largest copper user after China.
“Continued stock drawdowns mean the market is looking very tight,” Gayle Berry, an analyst at Barclays Capital, said today by phone from London. “Demand is very robust,” and prices may continue to climb, she said.
Copper for delivery in December rose 0.65 cent, or 0.2 percent, to $3.5715 at 8:54 a.m. on the Comex in New York. The contract touched $3.594, the highest price since April 16. Copper for delivery in three months added 0.1 percent to $7,852 a metric ton on the LME. All six main metals traded on the LME gained, led by zinc.
Home resales rose to a 4.1 million annual pace in August from July’s 3.83 million, according to the median of 72 estimates in a Bloomberg News survey. The figures are due at 10 a.m. New York time. Construction accounts for a quarter of copper demand, according to the Copper Development Association.
Fed Rate Target
Prices gained earlier even as the dollar rebounded from a five-month low against the euro. The U.S. currency weakened this week after the Federal Reserve left its benchmark interest-rate target at a record low, pledged to take more steps to spur growth if necessary and said inflation “is likely to remain subdued for some time.”
Until U.S. interest rates start to “edge up, investors will continue loading up on dollar-denominated assets,” said Geoff Clear, head of Asia commodities at Australia & New Zealand Banking Group Ltd.
Initial jobless claims increased by 12,000 to 465,000 in the week ended Sept. 18, Labor Department figures showed today. Claims were expected to stay unchanged at 450,000 in the week ended Sept. 18, according to the average estimate of 47 economists surveyed by Bloomberg.
LME copper stockpiles fell 0.5 percent to 380,125 tons, daily exchange figures showed, leaving inventories down 1.1 percent this week. Stocks climbed yesterday for the first time in six days after dropping on Sept. 21 to the lowest level since November. Orders to draw copper from inventories, or canceled warrants, slid 6.8 percent to 26,750 tons today.
Contango Narrows
Two parties held between 30 percent and 39 percent of the stockpiled metal as of Sept. 21.
Cash copper’s discount to the three-month contract shrank to $1 a ton today. The so-called contango was at $7.50 yesterday and $11.50 on Sept. 21, according to LME data.
“The fact that we’re beginning to see nearby spreads tighten is reflecting that there is increased demand for spot material,” Barclays’ Berry said. “It’s only a matter of time before we see this flipping into backwardation,” when immediate-delivery metal trades above the three-month price.
Among other LME metals for three-month delivery, tin added 1.1 percent to $23,550 a ton. The metal is this year’s best LME performer, adding 39 percent, compared with the 22 percent advance by closest rival nickel.
Aluminum gained 1.3 percent to $2,265 a ton after touching $2,276.50, the highest price since April 27. Zinc climbed 1.5 percent to $2,224.25 a ton after reaching $2,245, the highest price since May 4. Nickel rose 0.3 percent to $22,650 a ton and lead was 0.6 percent higher at $2,237 a ton.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
http://www.bloomberg.com/news/2010-09-23/copper-may-advance-for-a-second-day-as-dollar-weakens-after-fed-statement.html
Zinc gains, Copper Climbs in New York as Weakening Dollar Stokes Demand From Investors
By Nicholas Larkin and Glenys Sim - Sep 22, 2010 5:14 AM PT
Copper gained for the first time in three days in New York as a weaker dollar bolstered the appeal of commodities as alternative investments.
The dollar slid to an almost five-month low against the euro after the Federal Reserve yesterday left its benchmark interest-rate target at a record low and pledged to take more steps to spur economic growth if needed. The euro gained as Portugal sold bonds today after investors bought the maximum amounts offered at Spanish and Irish debt sales yesterday.
“The main thing is the weakness of the dollar,” said Dan Smith, an analyst at Standard Chartered Plc in London. “The Fed statement creates additional worries about the U.S., and the European bond sales create positives for Europe.”
Copper for delivery in December added 2.35 cents, or 0.7 percent, to $3.5045 a pound at 7:54 a.m. on the Comex in New York. Copper for delivery in three months was 0.4 percent higher at $7,710 a metric ton on the London Metal Exchange.
Investors bought and sold 3,419 LME copper contracts, about 8 percent of volume on Sept. 17. Financial markets in China, the world’s biggest copper user, are closed until Sept. 27 for a holiday.
The dollar slumped 1.5 percent against the euro after the Fed statement yesterday and today fell to the lowest level since April 27. Some investors buy commodities as an alternative to a weaker greenback, which makes dollar-priced metals cheaper in terms of other monies.
‘Optimistic About Demand’
“Near-term direction will be influenced by economic data, the stock market and the dollar,” Tiger Shi, head of Asia- Pacific metals at Newedge Group, said from Hong Kong. “We are still pretty optimistic about demand going forward.”
The Federal Housing Finance Agency’s monthly index for U.S. house prices, due out today at 10 a.m. New York time, fell 0.2 percent in July, according to a Bloomberg survey of economists. That would be less than June’s 0.3 percent drop.
Builders in the U.S. began work on more homes than forecast in August, outpacing the number of building permits issued, figures showed yesterday. Construction accounts for a quarter of copper demand, according to the Copper Development Association. Asian shares rose today.
Futures on the Chicago Mercantile Exchange show a 21.2 percent chance the U.S. central bank will lower its target rate for overnight bank lending from between zero and 0.25 percent to zero at its June 2011 meeting, up from 18 percent odds a week ago. The U.S. central bank also said yesterday it refrained from expanding its holdings of securities.
Fed Statement
The Fed said it “will provide additional accommodation if needed” to spur growth and that inflation “is likely to remain subdued for some time.” Investors often buy commodities as a hedge against rising prices.
Portugal sold 750 million euros ($1 billion) of bonds after Ireland sold 1.5 billion euros of debt yesterday and Spain sold 7 billion euros of 12-month and 18-month bills, the maximum target.
LME copper stockpiles gained for the first time in six days, rising 0.5 percent to 382,100 tons and rebounding from the lowest level since November, daily exchange figures showed. Orders to draw copper from inventories, or canceled warrants, fell 1.6 percent to 28,700 tons.
One party held between 30 percent and 39 percent of the stockpiled metal and another held between 40 percent and 49 percent as of Sept. 20.
Tin, Aluminum
Among other LME-traded metals for three-month delivery, tin rose 0.7 percent to $23,150 a ton. The metal is this year’s best LME performer, adding 37 percent, compared with the 20 percent advance by closest rival nickel. Prices have been bolstered by disruptions to production in the Democratic Republic of Congo and Indonesia, the world’s biggest tin exporter.
Indonesia’s August tin exports fell to 7,974 tons from 8,870 tons in July, the Ministry of Trade said today.
Aluminum added 0.4 percent to $2,184 a ton, and zinc gained 0.4 percent to $2,150 a ton. Nickel declined 0.6 percent to $22,215 a ton, and lead was 0.3 percent higher at $2,182 a ton.
Commodity assets under management declined $7 billion to $293 billion in August, Barclays Capital said in a report. The drop was the second-biggest this year, after an $11 billion retreat in January, the bank said. The figures cover commodity index swaps, exchange-traded products and medium-term notes.
http://www.bloomberg.com/news/2010-09-22/copper-climbs-for-first-day-in-three-as-dollar-weakens-on-federal-reserve.html
Zinc falls, Copper May Advance in New York as Dollar Weakens Before Fed's Announcement
By Anna Stablum - Sep 21, 2010 5:58 AM PT
Copper may rise in New York and London as the dollar weakens before today’s conclusion of a meeting of Federal Reserve policy makers.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, fell as much as 0.5 percent, making dollar-priced metals cheaper in terms of other monies. The U.S. central bank probably will leave its target rate for overnight loans between banks at a record low, according to economists surveyed by Bloomberg.
“All is quiet ahead of the Fed meeting,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “A weaker dollar is supportive to most commodity prices, including base metals.”
Copper for delivery in December rose 0.7 cent, or 0.2 percent, to $3.5115 a pound at 8:48 a.m. on the Comex in New York after gaining as much as 0.7 percent. Copper for delivery in three months advanced 0.1 percent to $7,720 a metric ton on the London Metal Exchange.
The Fed is scheduled to announce its decision at about 2:15 p.m. in Washington. The benchmark interest rate has been in a range of zero to 0.25 percent since December 2008. Economists surveyed by Bloomberg earlier this month forecast the central bank will hold that rate until late 2011.
“The Fed statement will be closely watched as well for hints on quantitative easing,” Kryuchenkov said, referring to debt purchases by the central bank.
Housing Starts
Builders in the U.S. broke ground on more homes in July than estimated by economists, government figures showed, helping to support prices. Housing starts gained 10.5 percent to a 598,000 annual rate, the Commerce Department said, above the 550,000 estimated in a Bloomberg News survey. The country is the world’s second-largest copper consumer after China.
“The data suggest that the U.S. housing sector is slowly pulling itself off the canvas after a knockout punch,” said David Thurtell, a Citigroup Inc. analyst in London. Construction accounts for a quarter of copper demand, according to the Copper Development Association.
LME copper stockpiles fell for a fifth day to 380,025 tons, the lowest level since Nov. 5, daily exchange figures show. Orders to draw copper from inventories, or canceled warrants, rose 0.8 percent to 29,175 tons. One party held between 30 percent and 39 percent of the inventory and a second accounted for between 40 percent and 49 percent as of Sept. 17, according to exchange figures.
Inventories Contract
Copper stockpiles monitored by the Shanghai Futures Exchange declined to the lowest level in 11 months, according to data from the bourse. Inventories fell 3.9 percent to 94,365 tons, the exchange said today. That’s the lowest level since the week ended Oct. 9, 2009. Financial markets in China, the world’s largest metals user, are closed from Sept. 20 to Sept. 24 for the Mid-Autumn Festival holiday.
The copper market was in deficit by 281,000 tons in the year’s first half, more than double the year-earlier 125,000 tons, the International Copper Study Group said today.
Tin for three-month delivery on the LME fell 0.9 percent to $23,250 a ton. Prices last week reached $23,800, the highest intraday level since July 16, 2008. The metal is this year’s best LME performer, adding 37 percent, compared with the 24 percent advance by closest rival nickel.
Tin, which touched a record $25,500 a ton in May 2008, has been bolstered by disruptions to production in the Democratic Republic of Congo and Indonesia.
Too Much Aluminum
Aluminum advanced 0.5 percent to $2,205 a ton. A “clear oversupply” of the lightweight metal is the industry’s “main challenge,” Norsk Hydro ASA, the world’s fifth-largest producer, said today.
“We are still very worried about the U.S.,” Executive Vice President Arvid Moss said. “Demand driven by the infrastructure investments there will now gradually be less.”
Construction and transportation make up about 40 percent of global aluminum demand, according to researcher CRU.
A market surplus of the metal will shrink this year to 385,000 tons from 1.1 million tons in 2009, according to Barclays Capital. Next year the surplus will swell to 553,000 tons, the bank said in a report on Sept. 16. Aluminum usage will rise 8.4 percent this year in North America, Barclays Capital said, below its estimate for a 13 percent global gain.
Nickel slipped 0.5 percent to $22,950 a ton, lead declined 1.6 percent to $2,160 a ton and zinc fell 0.8 percent to $2,162 a ton.
http://www.bloomberg.com/news/2010-09-21/copper-may-advance-in-london-as-dollar-weakens-before-fed-s-announcement.htmlZin
Zinc climbs, Copper Advances for Third Day as Dollar's Drop Increases Investor Demand
By Glenys Sim - Sep 20, 2010 12:24 AM PT
Copper climbed for a third day, rising to a five-month high, as the weakening dollar boosted demand for raw materials as alternative investments. Zinc, lead and nickel also advanced.
The three-month contract on the London Metal Exchange gained as much as 1.2 percent to $7,812 a metric ton, the highest price since April 26, and was at $7,788 at 3:15 p.m. in Singapore. Copper for December in Shanghai rose as much as 1.2 percent to a two-week high of 60,440 yuan ($9,006).
“The Fed is expected to keep interest rates low during their meeting this week, which should put pressure on the dollar and support metals prices,” Zeng Chao, an analyst at Everbright Futures Co., said in an e-mail. “Trading this week will be marked by low volumes, with China out from Wednesday.”
Financial markets in China, the world’s largest metals user, are closed from Sept. 22 to Sept. 24 for the Mid-Autumn festival holiday. Factories and construction sites, which use copper for making pipes and wires, may close or run at a reduced rate.
The dollar fell against a six-currency basket, including the euro, on speculation that the Federal Reserve’s Open Market Committee will say at a meeting tomorrow it’s considering further measures to keep borrowing costs low. The dollar was at $1.3092 per euro from $1.3050 on Sept. 17, when it slid to $1.3159, the weakest level since Aug. 11.
“Metals are also benefiting from the rally in the agricultural market” as investors put more funds into commodity holdings as prices rise, said Wang Hongchuan, deputy general manager at Chongqing Xianrong Futures Brokerage Co.
Corn, which on Sept. 17 traded at more than $5 a bushel for the first time since 2008, extended its rally today. Futures in Dalian surged to a record. Cotton in New York jumped to the highest price in more than 15 years, trading at more than $1 a pound. Wheat and soybeans also gained today.
Indonesia Tin
Tin, which reached $23,800 a ton on Sept. 17, the highest level since July 2008, dropped 0.2 percent to $23,550 a ton at 3:18 p.m. Singapore time.
Tin shipments from Indonesia, the largest exporter, may drop 19 percent this year to about 80,000 tons from 99,287 tons in 2009 as heavy rains disrupt mining, according to the trade ministry, adding to signs of a slump in trade that’s helped make the commodity this year’s best base-metal performer. That’s in line with an August forecast from Indonesia’s energy ministry for a 20 percent decline in output.
Aluminum in London increased 0.6 percent to $2,192 a ton, zinc climbed 1.9 percent to $2,192 a ton, lead advanced 0.9 percent to $2,221.25 a ton and nickel increased 1 percent to $23,431 a ton.
http://www.bloomberg.com/news/2010-09-20/copper-advances-for-third-day-as-dollar-s-drop-increases-investor-demand.html
Zinc jumps, Copper Climbs to a Five-Month High as Inventories Contract for 30th Week
By Anna Stablum - Sep 17, 2010 5:13 AM PT
Copper rose in New York and London to the highest price in almost five months as inventories of metal shrank for a 30th week in a row.
Stockpiles of copper tracked by the London Metal Exchange dropped to the lowest level in more than 10 months. Orders to draw metal from inventories posted the biggest weekly jump in four weeks. Goldman Sachs Group Inc. said copper is among raw materials it expects “to break out to the upside in coming months.”
“The market is increasingly aware of fundamental tightness in copper,” said Tom Kendall, an analyst at Credit Suisse Group AG in London. “Stocks keep being drawn down.”
Copper for delivery in December gained 4.05 cents, or 1.2 percent, to $3.534 a pound at 7:53 a.m. on the Comex in New York. The most-active contract touched $3.5525, the highest price since April 26, and is up 3.7 percent this week, on course for the biggest weekly advance since July.
Supply deficits probably will “quickly deplete” stocks over the coming year, Goldman Sachs analysts including Jeffrey Currie said in a report. U.S. and Chinese government policies aimed at spurring growth will combine with “exceptionally high” demand in emerging markets, the bank said.
Copper for delivery in three months rose 0.9 percent to $7,769 a metric ton on the LME. Among other main LME metals, tin gained for a ninth day in a row.
Inventories Shrink
LME copper stockpiles fell for a third day to 384,200 tons, the lowest level since Nov. 5, daily exchange figures show. They dropped 1.8 percent this week, the most since the week ended July 16.
Orders to draw copper from LME inventories, or canceled warrants, fell 4.6 percent to 29,775 tons. That pared this week’s surge to 43 percent, the biggest since the week ended Aug. 20.
Copper stockpiles monitored by the Shanghai Futures Exchange gained by 200 tons to 98,225 tons this week, the bourse said today.
Cash metal’s discount to the three-month contract shrank to $8.25 a ton today, the narrowest intraday level since Sept. 14, 2009. The so-called contango was at $10.75 in the prior session, according to LME data.
“Potential strikes in Peru” may aid prices, Credit Suisse’s Kendall said. Miners in the country, the second-largest copper producer after Chile, may vote this week to start a national strike to press for better pensions and a greater share of profits, a union leader said Sept. 14.
Tin Advances
Protesters in Peru attempted to seize Xstrata Plc’s Tintaya copper mine yesterday after clashes with police left two dead.
Tin for three-month delivery on the LME gained 0.9 percent to $23,700 a ton after touching $23,800, the highest intraday price since July 16, 2008. The metal is this year’s best LME performer, adding 39 percent, compared with the 27 percent advance by closest rival nickel.
Supply lagged behind demand by 9,900 tons in the first seven months of 2010 after a year-earlier, 9,500-ton surplus, according to the World Bureau of Metal Statistics. Tin, which touched a record $25,500 a ton in May 2008, has been bolstered by disruptions to production in Congo and Indonesia.
“With problems in the tin-rich province in Congo, there are some fundamental reasons for higher prices,” said Barbara Lambrecht, a Commerzbank AG analyst.
LME stockpiles fell for a fourth week to 13,625 tons, taking this year’s decline to 49 percent. One party held between 40 percent and 49 percent of the inventory as of Sept. 14, according to the LME.
Nickel, Lead
“There is some risk that market prices are overheating” because of the concentration of stockpile ownership, Lambrecht said.
Nickel rose 0.8 percent to $23,440 a ton after reaching $23,570, the highest intraday price since May 10. The market moved into a so-called backwardation for the first time in more than a year on Sept. 14 as immediate-delivery nickel traded at a premium to three-month metal.
Cash nickel traded at a premium of $8 a ton to the three- month contract today, widening from $7 in the prior session, according to the latest LME figures. Cash metal was at a discount of $6 on Sept. 13.
Aluminum advanced 1.4 percent to $2,196.75 a ton, lead climbed 1.6 percent to $2,238 a ton and zinc jumped 1.8 percent to $2,186 a ton.
http://www.bloomberg.com/news/2010-09-17/copper-climbs-to-a-five-month-high-as-inventories-contract-for-30th-week.html
Zinc little changed, Copper Declines for Second day on Speculation China Curbs May Crimp Demand
By Glenys Sim - Sep 15, 2010 8:53 PM PT
Copper dropped for a second day, erasing an early advance, on speculation that China may add to tightening measures, raising concern that economic growth may slow in the biggest metals user. Lead and tin also fell.
The three-month contract on the London Metal Exchange declined as much as 0.3 percent to $7,596 a metric ton after earlier gaining as much as 0.4 percent. The metal, which traded at $7,607 at 11:46 a.m. in Singapore, dropped yesterday after economic data in the U.S. indicated a slowdown in manufacturing in the largest user after China.
“If China’s economic data continues to show previous measures to cool the economy haven’t worked, more steps will definitely be taken,” said Wang Weiwei, an analyst at First Futures Brokerage Co.
China’s regulator may require the nation’s biggest banks to boost capital-adequacy ratios to as much as 15 percent by 2012, a person with knowledge of the matter said yesterday. This will slow loan growth to a pace that more closely matches economic expansion, according to Goldman Sachs Group Inc.
China’s authorities earlier this year boosted requirements for bank reserves three times and introduced real-estate curbs in an effort to cool lending and speculation. Copper is used in electrical wiring and pipes.
U.S. Manufacturing
Industrial production in the U.S. cooled in August to 0.2 percent after a 0.6 percent gain in July, figures from the Federal Reserve showed yesterday. A separate report showed manufacturing in the New York region expanded this month at the slowest pace in more than a year.
Copper for December delivery on the Shanghai Futures Exchange lost as much as 0.4 percent to 58,830 yuan ($8,737) a ton, after gaining as much as 0.5 percent earlier. China’s financial markets are closed from Sept. 22 to Sept. 24 for the Mid-Autumn festival holiday, and again from Oct. 1 to Oct. 7 for the National Day holiday.
“The market will continue to be rangebound at least until after the Chinese holidays in October,” said Wang.
Aluminum in London decreased 0.4 percent to $2,146.50 a ton, lead dropped 0.6 percent to $2,225 a ton and zinc was little changed at $2,144.50 a ton. Nickel declined 0.5 percent to $23,100 a ton and tin lost 0.4 percent to $23,070 a ton.
http://www.bloomberg.com/news/2010-09-16/copper-pares-gain-as-u-s-data-raises-concerns-about-strength-of-recovery.html
Zinc dips, Copper May Decline on Concern About Potential Real-Estate Curbs in China
By Anna Stablum - Sep 15, 2010 4:58 AM PT
Copper may fall in New York on concern that the government in China, the world’s largest consumer of the metal, might take more steps to curb the real- estate market, one of the main sources of demand.
The Shanghai Composite Index of Chinese equities declined the most in almost a week. Property stocks slid after the People’s Daily cited an official as saying developers face increasing cash-flow pressure. Copper also dropped as investors awaited figures that may show a slowdown in U.S. industrial production.
“There are scattered reports that the government may introduce new measures to cool the property market” in China, said Daniel Brebner, an analyst at Deutsche Bank AG in London. A quarter of all copper is consumed in construction, according to the Copper Development Association.
Copper for delivery in December fell 0.4 cent, or 0.1 percent, to $3.4645 a pound at 7:49 a.m. on the Comex in New York, rebounding from a slide of as much as 0.7 percent. Copper for delivery in three months declined 0.5 percent to $7,614 a metric ton on the London Metal Exchange.
Prices also retreated after a person with knowledge of the matter said China’s banking regulator may require the nation’s “systemically important” lenders to raise capital-adequacy ratios as high as 15 percent by 2012.
Empire State
U.S. industrial production increased 0.2 percent last month after rising 1 percent in July, according to the median estimate of 78 economists surveyed by Bloomberg News. The Federal Reserve figures are scheduled for release at 9:15 a.m. in Washington.
A report due 45 minutes earlier from the New York Federal Reserve Bank probably will show that the so-called Empire State manufacturing index increased to 8 this month from 7.1 in August, according to the median forecast in a Bloomberg survey.
“We expect that even if data disappoints, the prospect for the Federal Reserve’s possible intervention or more quantitative easing could keep metal prices supported,” Brebner said. “The contradictory economic data that has been released over the past month is making the assessment of physical demand much more difficult than usual.”
Figures published in recent weeks showed weaker-than- estimated U.S. housing starts and durable-goods orders in July, as well as an unexpected slump in the Philadelphia Fed’s factory index. At the same time, consumer confidence was stronger than economists estimated and private payrolls climbed more than expected in August.
Stronger Dollar
Prices also dropped today as the dollar strengthened, making metals prices in the currency more expensive in terms of other monies. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, climbed as much as 0.8 percent.
LME copper stockpiles fell 0.3 percent to 389,500 tons, according to daily exchange figures. They have dropped 22 percent in 2010, heading for the first annual contraction in six years.
Orders to draw copper from LME inventories, or canceled warrants, jumped the most in more than three months. They rose 21 percent, the most since June 8, to 27,675 tons.
Nickel for three-month delivery on the LME slid 0.6 percent to $23,200 a ton. The contract yesterday reached $23,355, the highest intraday price since May 10. LME stocks, down 24 percent this year, rose 0.7 percent today to 119,856 tons.
The nickel market moved into a so-called backwardation yesterday as cash metal traded at a premium of $2 a ton to the three-month contract, compared with discounts of $6 on Sept. 13 and $39 a week ago. A backwardation often indicates a scarcity of a commodity for nearer-term delivery.
Tin gained 1 percent to $22,875 a ton after touching $22,990, the highest intraday price since July 24, 2008. Aluminum fell 0.3 percent to $2,153.50 a ton, lead dropped 0.4 percent to $2,234 a ton and zinc slid 1.3 percent to $2,147 a ton.
http://www.bloomberg.com/news/2010-09-15/copper-drops-in-london-on-concern-about-potential-china-real-estate-curbs.html
Zinc Jumps, Copper Climbs as China Pledges to Maintain Policy Stability;
By Bloomberg News - Jul 28, 2010 12:44 AM PT
Copper climbed, reversing earlier losses, as China’s pledge to maintain policy stability improved investors’ risk appetite for raw-material investment. Aluminum, lead, nickel, zinc and tin gained.
Copper for three-month delivery rose as much as 1.8 percent to $7,185 a metric ton on the London Metal Exchange and traded at $7,175 at 3:13 p.m. in Shanghai.
China will maintain moderately loose monetary policy in the second half, Zhang Tao, head of the central bank’s survey and statistics department, wrote in yesterday’s Economic Daily newspaper. President Hu Jintao and Premier Wen Jiabao pledged last week to maintain policy stability for the rest of the year after measures to rein in property prices and bank lending eased second-quarter growth.
“Investors feel bolder now, with the government’s policy stance,” Ni Yaoxiang, an analyst at Guojin Futures Co., said from Shanghai today. “There has always been quite a lot of money around looking for investment. It’s just that people want to be cautious after China took some tightening measures.”
Japan’s output of copper and copper-alloy fabricated products rose for the eighth straight month as the country’s export-led economy expanded, an industry group said today. The country’s shipments of rolled-aluminum products increased for a seventh month, as the economic recovery improved demand for the metal used in cars and houses.
Power Outage
Copper also rose as Chile’s second electricity outage in less than two weeks disrupted mines owned by Codelco and Antofagasta Plc.
Orders for durable goods in the U.S. probably increased in June for the sixth time in the past seven months, showing business spending is supporting the country’s recovery, economists said before a report today. “Durable orders will be watched closely,” Xiao Jing, an analyst at Beijing Capital Futures Co., said today.
Copper for October delivery in Shanghai rose 2 percent to 56,220 yuan ($8,293) a ton at 2:48 p.m. local time. Aluminum futures in London gained 1 percent to $2,076.75 a ton, while lead gained 1.7 percent to $2,010 a ton and zinc advanced 2.6 percent to $1,958 a ton. Tin rose 1.1 percent to $19,550 a ton.
http://www.bloomberg.com/news/2010-07-28/copper-futures-in-london-may-extend-slump-after-u-s-confidence-declines.html
Zinc climbs, Copper Gains as Chinese Industrial Production Exceeds Analysts' Estimates
By Anna Stablum - Sep 13, 2010 5:28 AM PT
Copper rose in New York and London, rebounding from last week’s drop, after industrial production increased more than analysts estimated in China, the world’s largest consumer of the metal.
Production gained 13.9 percent in August from a year earlier, a statistics bureau report showed on Sept. 11, compared with the 13 percent median estimate of 29 economists. Prices also advanced as copper inventories continued to shrink, the dollar weakened and the European Union said Europe’s economy may expand more than forecast.
“Continued heavy industrial restocking is partly responsible for the robust Chinese industrial-production print,” said Daniel Major, an analyst at RBS Global Banking & Markets in London. The figures were “consistent with firm domestic demand and a soft landing for the domestic Chinese economy,” he said.
Copper for delivery in December gained 7.95 cents, or 2.3 percent, to $3.486 a pound at 8:14 a.m. on the Comex in New York. Copper for delivery in three months rose 2.3 percent to $7,656 a metric ton on the London Metal Exchange. All of the six main metals traded on the LME climbed, led by zinc.
Imports into China also accelerated, adding to signs that growth in the country is picking up even after the government curbed credit growth and property speculation and closed energy- intensive and polluting factories.
‘Risk Appetite’
The figures probably will add to “positive momentum for risk appetite this week,” Robin Bhar, an analyst at Credit Agricole SA’s investment-banking unit in London, said in a report today. Equities advanced in Europe and Asia, and futures indicated that U.S. stock benchmarks will rise when trading begins in New York.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, dropped as much as 0.8 percent, the most since Sept. 1. A weaker dollar makes metals priced in the currency cheaper in terms of other monies.
Europe’s economy may grow almost twice as fast as previously forecast this year with a more “moderate” expansion in the second half, the European Commission said. Gross domestic product in the 16-nation euro region may increase 1.7 percent this year instead of a previously projected 0.9 percent, it said in a report published today.
Europe consumes about 20 percent of global copper output and some 15 percent of aluminum production, according to Barclays Capital estimates for this year.
Inventories Shrink
Copper production in China fell 0.3 percent to 397,000 tons in August from the prior month, statistics bureau data showed today. Output gained 8.8 percent from a year earlier.
LME copper stockpiles dropped for a seventh day to 390,450 tons, the lowest level since Nov. 9, according to daily exchange figures. Orders to draw copper from LME inventories, or canceled warrants, declined for an eighth day to 20,700 tons, the lowest level since Aug. 13.
Tin for three-month delivery on the LME advanced 1 percent to $22,099 a ton after touching $22,250, the highest intraday price since Aug. 1, 2008. The metal is this year’s best performer on the LME, rising 30 percent.
Prices may gain further as supply lags behind demand, according to Macquarie Group Ltd. Tin may add 17.5 percent from $21,600 a ton, analysts including Jim Lennon wrote in a report. That equates to a price of $25,380, according to Bloomberg calculations.
Nickel, Aluminum
Nickel advanced 2.7 percent to $23,100 a ton. Financing agreements may have tied up as much as 65 percent of LME stockpiles, Credit Agricole’s Bhar said. Metal might be “released into the market over coming weeks, as the forward curve has flattened,” making such accords less viable, he said.
LME nickel inventories dropped 0.3 percent to 118,818 tons today, taking this year’s decline to 25 percent. Cash nickel’s discount to three-month metal shrunk to $4 a ton on Sept. 10, the narrowest level since Sept. 2, 2009, from $6 the prior session. Cash metal was at a $48 discount a week ago.
The number of nickel futures contracts outstanding, or market open interest, jumped 3.3 percent to 142,174 lots on Sept. 9, LME data showed. That was the highest level since April 20.
Aluminum rose 2 percent to $2,142 a ton, lead climbed 2.1 percent to $2,230 a ton and zinc added 2.9 percent to $2,171 a ton.
http://www.bloomberg.com/news/2010-09-13/copper-rises-as-chinese-industrial-production-exceeds-analysts-estimates.html
Zink little changed, Copper Heads for Weekly Drop on Concern About U.S., China Demand Outlook
By Anna Stablum - Sep 10, 2010 5:39 AM PT
Copper headed for a weekly drop in New York and London on concern about the outlook for demand in the U.S. and China, the world’s two biggest consumers.
The U.S. economy showed “widespread signs” of slowing, the Federal Reserve said Sept. 8. China advanced the release of August economic figures to tomorrow, stoking speculation that the country’s central bank may be preparing to raise a benchmark interest rate. Prices also fell as orders to draw copper from inventories posted the biggest weekly slide since May.
“The world economy is slowly getting better, but I’d be surprised if the U.S. is going to lead the way,” said Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London.
Copper for delivery in December declined 0.85 cent, or 0.2 percent, to $3.435 a pound at 8:24 a.m. on the Comex in New York. The most-active contract is down 1.9 percent this week after three consecutive gains. Copper for delivery in three months fell 0.2 percent to $7,540 a metric ton on the London Metal Exchange.
Imports of copper and products into China rose 11 percent to 379,527 tons in August from July, customs figures showed. That was the second straight monthly increase. Shipments also gained from a year earlier, according to Bloomberg calculations. The country is the biggest copper user.
Growth in China
“Essentially it is a representation that Chinese growth is only slowing modestly,” Brown said. Still, he predicted “less buoyant” figures for September, saying a narrowed gap between London and Shanghai copper prices reduced profit from selling metal in Asia.
Copper may decline next week on speculation the economic recovery is slowing in the U.S., according to a survey. Nine of 17 analysts, investors and traders surveyed by Bloomberg, or 53 percent, said the metal will drop next week. LME copper yesterday fell as low as $7,460 a ton, the lowest price since Sept. 1.
Orders to draw copper from LME inventories, or canceled warrants, declined for a seventh day, sliding 8.2 percent to 20,800 tons. That was the lowest level since Aug. 13. Canceled warrants plunged 25 percent this week, the most since the week ended May 7.
LME copper stockpiles dropped for a sixth day to 391,400 tons, the lowest level since Nov. 9, daily exchange figures show. Inventories slid for a 29th consecutive week.
Shanghai Inventories
Copper stockpiles in Shanghai declined for a second week to a seven-month low, according to data provided by the Shanghai Futures Exchange. Inventories declined 7.5 percent to 98,025 tons.
Commerce Department figures due at 10 a.m. Washington time today may show that inventories at U.S. wholesalers climbed 0.4 percent in July after a 0.1 percent increase the previous month, according to the median estimate of economists surveyed by Bloomberg News.
Nickel for three-month delivery on the LME climbed 0.5 percent to $22,863 a ton. Inventories rose for the first time in six days to 119,160 tons, reducing this year’s decline to 25 percent.
October-delivery metal on Sept. 8 closed at a $20 premium to the November contract, a so-called backwardation that was at the same level as of yesterday’s close. The contracts settled at the same price on Sept. 7.
Cash nickel’s discount versus three-month metal contracted to $6 yesterday, the narrowest level since Sept. 2, 2009. Cash metal was at a $55 discount a week ago.
One party held between 30 percent and 39 percent of available nickel stockpiles as of Sept. 8, according to the latest LME data.
Tin gained 1.2 percent to the day’s high of $21,950 a ton, the highest intraday price since Aug. 1, 2008. Aluminum rose 0.4 percent to $2,113 a ton, zinc was little changed at $2,152 a ton and lead fell 0.3 percent to $2,195 a ton.
http://www.bloomberg.com/news/2010-09-10/copper-heads-for-weekly-drop-on-concern-about-u-s-china-demand-outlook.html
Zinc declines, Copper in London Declines on U.S. Growth Concern, China Commodity Selloff
By Bloomberg News - Sep 9, 2010 12:37 AM PT
Copper declined on signs that U.S. growth may be slowing and on a selloff in Chinese commodities after a report that regulators may be investigating large positions in Shanghai rubber futures. Zinc dropped 6.5 percent.
The contract for three-month delivery dipped as much as 2.8 percent to $7,460 a metric ton on the London Metal Exchange, and traded at $7,553 at 3:16 p.m. in Shanghai.
The U.S. Federal Reserve said in a report overnight that the economy was showing “widespread signs of a deceleration.” A survey by 12 Fed regional banks showed five reported conditions were mixed or decelerating, five said that there was “economic growth at a moderate pace,” and two pointed to “positive developments or net improvements.”
“The market is still affected by the bad news and data coming out from time to time, so it’s difficult for copper to gain further at this point,” Cao Yanghui, an analyst at Nanhua Futures Co., said by phone from Hangzhou.
Copper for December delivery in Shanghai tumbled as much as 4.4 percent to 57,170 ($8,424) yuan, and closed at 58,590 yuan a ton. Zinc and aluminum fell by the daily 5 percent limit to 17,190 yuan and 15,000 yuan in morning session, respectively. Zinc ended the day at 17,680 yuan and aluminum at 15,580 yuan.
“There’s market talk today that a certain trader is being investigated by the securities regulator, leading to a large liquidation earlier,” Ying Haoliang, an analyst at Orient Securities Futures Co., said by phone from Shanghai.
Probe Talk
Commodity prices in China declined today on market speculation that regulators were investigating large positions in natural rubber futures, the Securities Times said on its website, citing people it didn’t identify. Rubber prices dropped in Shanghai and the declines spilled over into other commodities including copper, aluminum and zinc, it said. Rubber for January delivery dropped as much as 4.6 percent, the most since June 7, to 25,230 yuan a ton.
An official at the China Securities Regulatory Commission, who didn’t wish to be identified, declined to comment.
China’s stocks dropped the most in two weeks, led by financial and metal companies. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, fell 1.4 percent to close at 2,656.35. The 21st Century Business Herald reported yesterday China may introduce more measures to curb the property market, including stopping loans to real estate developers and compulsory lowering of home prices.
China’s government will issue more measures to curb speculation as policy makers had been determined to cut the housing prices, Jones Lang LaSalle Inc. Chief Executive officer Colin Dyer said today in an interview.
Trade Data
“The market will look at the production and trade data in the next couple of days to assess the economic condition,” Zhao Kai, an analyst at Jiurui Futures Co. said from Shenzhen. “We’ll also watch the consumption side in September.”
China’s customs department will release the August trade data tomorrow.
Zinc in London declined by the most since June 29 to $2,075.25 a ton and last traded at $2,160 a ton. Aluminum fell 1.4 percent to $2,130 a ton and lead slid 1.9 percent to $2,193.25 a ton. Nickel lost 1.1 percent to $22,650 a ton and tin dropped 0.8 percent to $21,500 a ton at 3:15 p.m. in Shanghai.
http://www.bloomberg.com/news/2010-09-09/copper-in-london-declines-on-u-s-growth-concern-china-commodity-selloff.html
Zinc rises, Copper Fluctuates in New York Trading, Reflecting Movement by the Dollar
By Anna Stablum - Sep 8, 2010 5:53 AM PT
Copper fluctuated in New York and London, swinging between gains and losses in line with movement by the dollar.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, was little changed after falling as much as 0.3 percent. A weaker dollar makes raw materials priced in the currency less expensive in terms of other monies. The dollar slipped before the release of Federal Reserve figures that may indicate a stalling U.S. economic rebound.
“It’s all about the dollar,” Steve Hardcastle, an analyst at Sucden Financial Ltd. in London, said by phone. “We await the next U.S. data.”
Copper for delivery in December added 0.75 cent, or 0.2 percent, to $3.478 a pound at 8:43 a.m. on the Comex in New York. The contract gained as much as 0.7 percent and fell as much as 0.6 percent. Copper for delivery in three months rose 0.1 percent to $7,634.25 a metric ton on the London Metal Exchange.
The Fed’s survey of conditions in its 12 districts, known as the Beige Book, is due at 7 p.m. London time today. The U.S. jobless rate is likely to approach 10 percent in coming months as the economy fails to grow enough to employ people rejoining the labor force, according to economists surveyed by Bloomberg.
“The Beige Book is likely to suggest that the U.S. economy isn’t exactly setting the world on fire,” said Citigroup Inc. analyst David Thurtell in London.
Inventories Shrink
LME copper stockpiles dropped for a fourth day to 394,500 tons, the lowest level since Nov. 10, according to daily exchange figures. Inventories have slid 21 percent this year, helping to boost the metal to a four-month high of $7,750 a ton on Sept. 3.
“Long-term fundamentals are still appealing,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report. “Restocking will be driven by seasonal demand factors, with a pickup in economic activity later this autumn.”
Orders to draw copper from LME inventories, or canceled warrants, declined for a fifth day, sliding 3.2 percent to 23,900 tons.
Zinc for three-month delivery on the LME rose 1 percent to $2,210 a ton. Seoul-based Korea Zinc Co., the world’s second- biggest zinc smelter, said it will buy a Peruvian mine for $47.5 million to secure stable supplies of raw materials.
Aluminum fell 0.8 percent to $2,147 a ton and nickel gained 1.5 percent to $22,537 a ton. Tin rose 0.7 percent to $21,100 a ton and lead was little changed at $2,187 a ton.
http://www.bloomberg.com/news/2010-09-08/copper-falls-in-london-before-release-of-fed-s-beige-book-economic-survey.html
Zinc falls, Copper Declines on Speculation China May Sell From Government Stockpiles
By Glenys Sim - Sep 7, 2010 12:19 AM PT
Copper dropped for the first time in five days, falling by the most in two weeks, on speculation China’s State Reserve Bureau may sell some of its stockpiles after prices rallied to the highest level in four months.
The three-month delivery contract lost as much as 1.4 percent, the biggest intraday drop since Aug. 25, to $7,601.25 a metric ton on the London Metal Exchange, and traded at $7,630 at 3:08 p.m. in Singapore. The commodity climbed to $7,750 Sept. 3, the highest level since April 27, after better-than-expected U.S. jobs data eased concerns the economic recovery was faltering.
“There is talk today that the SRB might sell copper, and while such rumors emerge from time to time, especially when prices rally strongly, it does hurt investor sentiment,” said Liu Biyuan, an analyst at GF Futures Co. “Copper is also lower because of the stronger dollar and weaker equities.”
China’s State Bureau of Material Reserve, also known as the State Reserve Bureau, operates under the National Development and Reform Commission, formulating strategy and managing state buying of mineral reserves. The bureau bought 235,000 tons of the metal last year, according to the China Nonferrous Metals Industry Association. When contacted, an official at the bureau, who did not wish to be identified, declined to comment.
“While it might make sense to sell now considering what they paid for it, the bureau isn’t out to profit from market moves,” said Wen Jinghai, an analyst at Bohai Futures Co. “If they really do sell part of the stockpile, it will only be a little at a time so as not to cause disruptions in the market.”
Shanghai Copper
Copper for December delivery on the Shanghai Futures Exchange dropped by as much as 1.7 percent to 59,500 yuan ($8,766) a ton, before ending the session at 59,680 yuan. The metal gained to 60,620 yuan yesterday, also the highest price since April 27. Immediate-delivery copper in Changjiang, Shanghai’s biggest cash market, traded at about 59,580 yuan today, down 0.7 percent, the biggest drop in three weeks.
“Higher prices always make physical buyers shy away and the market loses an important area of support,” Guan Jianxiong, an analyst at Zhujiang Futures Co., said from Guangdong. “The uptrend remains intact as economic data improves,” Guan said by phone. Copper has surged 21 percent in the past year.
The dollar gained for a second day against a six-currency basket including the euro. It rose the most in a week against the 16-nation currency after the Association of German Banks said that the nation’s 10 largest lenders, including Deutsche Bank AG, may need about 105 billion euros ($134 billion) in fresh capital because of new regulations.
The MSCI Asia Pacific Index fell for the first day in five, and stocks in China declined after a government official said a slowdown in industrial output growth will deepen on real-estate and energy curbs and the outlook for exports.
Aluminum in London declined 0.2 percent to $2,187.75 a ton, zinc fell 0.8 percent to $2,179.50 a ton, and lead decreased 0.6 percent to $2,182 a ton. Nickel shed 1.1 percent to $21,900 a ton and tin was little changed at $20,900 a ton.
http://www.bloomberg.com/news/2010-09-07/copper-in-london-declines-for-first-day-in-five-as-high-prices-deter-users.html
Zinc gains .6%, Copper Extends Gain in New York After U.S. Jobs Report Signals More Demand
By Anna Stablum - Sep 3, 2010 5:56 AM PT
Copper extended its weekly gains in New York and London after payrolls data in the U.S., copper’s second largest user, eased concerns about an economic slowdown.
Private payrolls that exclude government agencies climbed 67,000, after a revised 107,000 increase in July that was more than initially estimated, Labor Department figures in Washington showed today. The median estimate of economists surveyed by Bloomberg News called for a gain of 40,000. Overall employment fell 54,000 for a second month and the unemployment rate rose to 9.6 percent as more people entered the labor force.
“From a metals perspective, more employment means more consumers and more durable goods purchases,” said David Thurtell, a Citigroup Inc. analyst in London.
Copper for delivery in December rose 1.55 cent, or 0.4 percent, to $3.511 a pound at 8:37 a.m. on the Comex in New York. The U.S. market will be closed on Sept. 6 because of a holiday. The most-active contract rose 3.7 percent this week, the most since the week ended July 30. Copper for delivery in three months gained 1 percent to $7,703 a metric ton on the London Metal Exchange. The contract reached an intraday high of $7,726 after the U.S. data, the most since April 27.
Falling stockpiles in Shanghai and lower inventories in LME-monitored warehouses supported prices, said Leon Westgate, an analyst at Standard Bank Plc in London. Inventories tracked by the LME dropped 0.6 percent this week, down for 28 weeks in a row and the longest weekly decline since August 2004, according to exchange daily.
Inventories dropped 0.5 percent today to 397,675 tons, the lowest since Nov. 11, according to the bourse. Stockpiles have fallen 21 percent this year, on course for the first annual drop since 2004. Copper stockpiles monitored by the Shanghai Futures Exchange dropped to 105,917 tons this week, the lowest level since the week to July 30, according to exchange data today.
ISM Data Next
Another report at 10 a.m. may show services expanded at a weaker pace. The Tempe, Arizona-based Institute for Supply Management’s services gauge dropped in August to a six-month low of 53.2 from 54.3 the prior month, the median estimate of economists surveyed showed. Figures greater than 50 represent expansion for the industries that cover almost 90 percent of the economy.
Aluminum for three-month delivery on the LME rose 1.2 percent to $2,170 a ton. Zinc gained 0.6 percent to $2,188 a ton and tin advanced 0.8 percent at $21,600 a ton. Nickel advanced 1.9 percent to $22,060 a ton and lead climbed 1.5 percent to $2,187 a ton.
http://www.bloomberg.com/news/2010-09-03/copper-set-for-weekly-gain-as-stockpiles-drop-before-u-s-employment-data.html
Zinc gains, Copper Trades Near Four-Month High After U.S., China Manufacturing Data
By Bloomberg News - Sep 1, 2010 7:45 PM PT
Copper in London traded near a four- month high, extending yesterday’s advance, after better-than- expected economic data in U.S. and China, the two biggest consumers, boosted the demand outlook. Copper in Shanghai gained.
The metal for three-month delivery increased as much as 0.5 percent to $7,643 a metric ton on the London Metal Exchange, and traded at $7,616.50 at 10:12 a.m. in Shanghai. Copper for December delivery on Shanghai Futures Exchange gained 0.6 percent to 59,930 yuan ($8,814) a ton.
“The U.S. and China manufacturing data set the keynote for the macro environment,” said Fang Junfeng, an analyst at China International Futures (Shanghai) Co. “Copper is now more likely to advance than fall.”
The Institute for Supply Management’s U.S. manufacturing index increased to a three-month high of 56.3 in August from 55.5 in July, as factories added workers and cranked up production. The figure was projected to drop to 52.8, according to the median forecast in a Bloomberg News survey.
China’s government-backed purchasing managers’ index rose to 51.7 in August from 51.2 in July, beating a median estimate of 51.5 by a Bloomberg News survey of 17 economists.
“In terms of actual downstream demand, it’s not bad at all,” Fang said. High temperatures this summer kept air- conditioner demand robust in China, he said.
If investment demand for commodities remains robust, copper in Shanghai is likely to challenge the highest level touched earlier this year, said HNA Topwin Futures in a report today. Copper futures in Shanghai hit a year-to-date high of 64,300 yuan a ton on April 12.
Aluminum in London declined 0.6 percent to $2,095.50 a ton, zinc gained 0.8 percent to $2,149.75 a ton, and lead increased 0.8 percent to $2,131 a ton. Nickel advanced 0.7 percent to $21,200 a ton, and tin hadn’t traded yet.
--Helen Sun. Editors: Jarrett Banks, Matthew Oakley
http://www.bloomberg.com/news/2010-09-02/copper-trades-near-four-month-high-after-u-s-china-manufacturing-data.html
Zinc adds, Copper Climbs to Highest Level Since April as China Manufacturing Quickens
By Bloomberg News - Aug 31, 2010 8:54 PM PT
Copper Highest Level Since April in London, Shanghai
Copper advanced to the highest level since April in London and Shanghai. Photographer: Chris Rank/Bloomberg
Copper advanced to the highest level since April in London and Shanghai as manufacturing in China, the biggest consumer, expanded at a faster pace in August after the weakest growth since February 2009 the previous month.
Three-month delivery copper gained as much as 2 percent to $7,585 a metric ton, the highest level since April 27, and traded at $7,545 a ton at 11:52 a.m. in Shanghai. Copper for December delivery in Shanghai increased as much as 2.5 percent to 59,880 yuan ($8,789) a ton and traded at 59,600 yuan by the midday break.
The purchasing managers’ index rose to 51.7 from 51.2, exceeding forecasts, a government-backed report showed. Seasonal factors might have had an effect because the index typically gains as factories restart following July maintenance, Mizuho Securities Asia Ltd. said. A separate PMI released by HSBC Holdings Plc and Markit Economics gained to 51.9 from 49.4.
“The PMI data boosted market sentiment, especially the growth in new orders and new export orders,” Peng Qiang, an analyst at Cofco Futures Co., said by phone from Beijing.
Stocks in Asia advanced after the release offered reassurance that China’s moderation in growth isn’t deepening; any steeper slowdown in China would hurt a global recovery already hindered by elevated American unemployment. Signs of faster gains in prices in the report also underscored the need for policy makers to be on guard against inflation.
“I don’t see any substantial improvement in the supply and demand situation that can drive copper prices higher, but Shanghai is technically strong,” Luo Dayun, a trader at China Rising Futures Co., said by phone from Beijing.
U.S. Manufacturing
The U.S. Institute for Supply Management will release the monthly national factory index today, which may drop to 52.8 in August from 55.5 the prior month, according to the median forecast of economists surveyed by Bloomberg.
Demand for base metals in China usually increases in spring and fall, as smelters and manufacturers choose to suspend operations in summer and winter due to extreme temperatures.
Aluminum gained 0.4 percent to $2,067 a ton in London, zinc increased 2.4 percent to $2,114 a ton, and lead climbed 1.1 percent to $2,092 a ton. Nickel advanced 2.2 percent to $21,160 a ton, and tin gained 1.9 percent to $21,395 a ton at 11:37 a.m. in Shanghai.
http://www.bloomberg.com/news/2010-09-01/copper-climbs-to-highest-level-since-april-as-china-manufacturing-quickens.html
Zinc declines,Copper Drops, Paring Monthly Gain, on Concern U.S. Recovery Is Faltering
By Anna Stablum - Aug 31, 2010 5:03 AM PT
Copper fell in New York and London, paring a second monthly advance, before reports that may show a rebound in U.S. home prices slowed and consumer confidence near a five-month low, adding to concerns over the economic recovery.
In the U.S., the world’s second-biggest consumer of the metal after China, home prices in 20 cities rose 0.2 percent in June from the prior month, according to a Bloomberg survey, compared with a 0.5 percent May advance. Another report will probably show consumer sentiment little changed in August compared with July’s reading, which was the lowest since February.
“Copper is down, coming off after last week’s gains at the start of a macro-busy week and after a long weekend in London,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said today. “Economic uncertainty is creeping back in on expectation of bearish U.S. data this week.”
Futures for December delivery slid 6.3 cents, or 1.8 percent, to $3.3665 a pound at 7:28 a.m. on the Comex in New York. Copper for delivery in three months dropped 1 percent to $7,385.75 a metric ton on the London Metal Exchange. The London market was closed yesterday for a holiday.
The most-active contract on Comex is on course for a second monthly gain, up 1 percent after a 12 percent rise in July, the biggest monthly jump since July last year. “We will still trade off the broader market, but copper is actually not that bad,” said Kryuchenkov.
U.S. Data in Focus
Inventories of copper tracked by the LME dropped 3.6 percent this month, down for a sixth consecutive month, daily exchange figures showed. Stockpiles dropped 0.4 percent today to 398,525 tons, the lowest level since Nov. 11. Stockpiles have fallen 21 percent this year, on course for the first annual drop since 2004. Metal booked for delivery, or so-called canceled warrants, were little changed, down 0.1 percent to 30,250 tons, daily exchange data showed.
U.S. property values climbed 3.5 percent in June from the same month last year, down from a 4.6 percent gain in the 12 months to May, according to the median forecast of 21 economists surveyed by Bloomberg News. Construction accounts for a quarter of copper demand, according to the Copper Development Association. The home-price data from S&P/Case-Shiller are due at 9 a.m. in Washington. An hour later, consumer confidence data is due from the Conference Board, a New York-based research group. The sentiment gauge was little changed at 50.7 in August compared with 50.4 the prior month, according to the survey.
Another report, the Chicago Purchasing Managers’ Index due at 9:45 a.m. Washington time, may show its business barometer dropped this month to the lowest level since November, according to the survey’s median estimate.
Rising Demand
Aluminum for three-month delivery on the LME eased 0.3 percent to $2,051 a ton. The contango, cash aluminum’s discount to the three-month contract, widened to $14 a ton today from the prior session’s $13.25, according to LME data. The cash contract traded at a $2.25 premium to the three-month contract on Aug. 24, the highest since March 2007, according to LME data.
United Co. Rusal, the world’s largest aluminum producer, rebounded to a better-than-expected profit in the second quarter and forecast rising global demand, the company said in a statement today. Rusal, controlled by Oleg Deripaska, estimates global aluminum stocks will fall by up to 5 percent by the end of this year and continue to decline through 2011 and 2012, it said. LME inventories have dropped 4 percent this year to 4.44 million tons, according to daily exchange figures.
Nickel fell 1.7 percent to $20,700 a ton. The metal, mainly used in stainless steel, is forecast to average $21,000 a ton in the fourth quarter, Dan Smith, an analyst at Standard Chartered Plc in London said today in a report. A “revival of demand and increasing investor interest are positive for prices,” he said. However, global nickel supply is expected to increase in the second half of this year, in comparison with the first six months, keeping the market “broadly balanced,” Smith said.
Zinc shed 1.4 percent to $2,066.50 a ton, tin dropped 1.2 percent to $21,380 a ton, and lead slid 1.7 percent to $2,054.25 a ton.
http://www.bloomberg.com/news/2010-08-31/copper-drops-paring-monthly-gain-on-concern-u-s-recovery-is-faltering.html
Zinc gains, Copper Climbs to Four-Month High on Share Rally, Bernanke, Japan Optimism
By Bloomberg News - Aug 30, 2010 2:49 AM PT
Copper climbed to a four-month high from New York to Shanghai, as the Bank of Japan expanded credit support for banks and the Federal Reserve pledged steps to spur economic growth, potentially boosting demand for commodities.
December-delivery copper in New York jumped as much as 2.2 percent to $3.46 a pound, the highest level since April 27, and traded at $3.4110 at 5:46 p.m. in Singapore. The metal in Shanghai gained as much as 2.8 percent to 59,450 yuan ($8,740) per metric ton before closing at 59,390 yuan. The London Metal Exchange is closed for a bank holiday today.
“While it may seem like good news that governments are taking steps to ensure the recovery stays in place, it’s also a sign of how fragile the economy is and the current optimism may be short-lived,” Pan Jinghua, an analyst at Citic Futures Co., said from Shanghai. “The move may also be exaggerated by light volumes with London out today.”
Federal Reserve Chairman Ben S. Bernanke said the central bank has the tools to prevent the country from slipping back into a recession. The preconditions for a pickup in growth in 2011 “appear to remain in place,” he said. The Federal Open Market Committee “is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly,” Bernanke said.
Loan Program
In Japan, the central bank expanded a bank-loan program following an emergency policy meeting today, after the yen’s advance to a 15-year high threatened the economic recovery. Prime Minister Naoto Kan met with Bank of Japan Governor Masaaki Shirakawa to decide on the outline of his stimulus plan.
“Bernanke’s speech may serve to boost market sentiment for three to five days at most,” Zhu Haitao, an analyst at Zhongcai Futures, said by phone from Beijing. “The economic conditions, as well as supply and demand, don’t support an upward trend.”
U.S. gross domestic product expanded at a 1.6 percent annual rate from April through June, the Commerce Department said Aug. 27, lower than the 2.4 percent initially reported and higher than the median estimate of 1.4 percent in a Bloomberg survey. Reports this week may show hiring and manufacturing probably cooled in August, highlighting the risks of a slowdown.
Aluminum for December delivery gained 1.4 percent to 15,650 yuan per ton, and zinc increased 2.8 percent to 17,650 yuan.
http://www.bloomberg.com/news/2010-08-30/copper-climbs-to-four-month-high-on-share-rally-bernanke-japan-optimism.html
Zinc drops, Copper May Decline Before U.S. Economic-Growth Report, Speech by Bernanke
By Chanyaporn Chanjaroen - Aug 27, 2010 5:21 AM PT
Copper may fall in New York and London before the release of figures expected to show the economy in the U.S., the world’s second-biggest consumer of the metal, expanded less than initially estimated.
Growth cooled to a 1.4 percent pace from April through June, rather than the 2.4 percent projected last month, according to the median forecast of 81 economists surveyed by Bloomberg News. Investors also awaited a speech today by Federal Reserve Chairman Ben S. Bernanke on the outlook for the world’s largest economy.
“It’s the overshadowing economic uncertainty that’s the one to watch,” Daniel Major, a strategist at Royal Bank of Scotland Group Plc in London, said by phone. “Today’s focus will be on Bernanke.”
Copper for December delivery slipped 0.35 cent, or 0.1 percent, to $3.322 a pound at 8:14 a.m. on the Comex in New York. The contract is up 0.3 percent this week. Copper for three-month delivery fell 0.1 percent to $7,296 a metric ton on the London Metal Exchange.
Reports this week have indicated a mixed outlook for the U.S. economy. While weekly initial claims for unemployment benefits fell more than expected, orders for durable goods rose less than forecast in July and sales of existing and new homes were weaker than estimated.
Stimulus Measures
The Fed said Aug. 10 it would buy Treasuries to help prevent interest rates from rising. Any signs from Bernanke of further measures to stimulate the U.S. economy would be positive for industrial metals, said Dan Brebner, who heads metals research at Deutsche Bank AG in London.
“The likelihood is that the market will be disappointed, as the Fed probably hasn’t decided on more measures themselves,” Brebner said today by phone. A “lack of clarity would pressure prices,” he said.
Bernanke’s speech to central bankers from around the world, gathered at a symposium in Jackson Hole, Wyoming, will start at 3 p.m. London time. It will be followed by a speech from European Central Bank President Jean-Claude Trichet.
LME copper stockpiles dropped 0.3 percent to 400,100 tons, taking this year’s decline to 20 percent. Canceled warrants, or orders to draw metal from LME warehouses, jumped 8.2 percent to 30,275 tons.
World Consumption
Including metal tracked by exchanges in Shanghai and New York, copper inventories totaled 600,979 tons, or 12 days of global consumption based on the RBS estimate for demand this year of 18.2 million tons. That’s down from almost 14 days at the start of 2010. China is the biggest copper consumer.
Tin for three-month delivery on the LME climbed as much as 1.9 percent to $21,750 a ton, the highest intraday price since August 2008. Prices are up more than 26 percent this year, the most among the six main metals traded on the LME. The metal was last up 0.4 percent at $21,425.
Production will be 13,000 tons lower than demand in 2011 following an estimated 6,000-ton shortage this year, according to Standard Bank Plc.
“I’m bullish on tin, as fundamentals are quite positive,” Leon Westgate, a metals analyst at the bank in London, said today by phone. “You’ve got poor supply and strengthening demand.”
Aluminum lost 0.5 percent to $2,012 a ton and zinc dropped 0.2 percent to $2,046 a ton. Lead fell 0.1 percent to $2,024 a ton and nickel rose 0.7 percent to $20,600 a ton.
http://www.bloomberg.com/news/2010-08-27/copper-may-decline-before-u-s-economic-growth-report-speech-by-bernanke.html
Zinc surges, Copper Climbs in Shanghai as Equities Rebound, Dollar Halts Five-Day Gain
By Glenys Sim - Aug 26, 2010 12:31 AM PT
Copper climbed for the first time in three days in Asia, as equities rebounded and the dollar halted a five-day advance, boosting the global economic outlook. Zinc, lead and nickel rose.
Copper for three-month delivery on the London Metal Exchange rose as much as 1.8 percent to $7,230 a metric ton and traded at $7,214 at 3:13 p.m. in Singapore. The metal, used in construction and appliances, dropped to $7,028.25 a ton yesterday, the lowest level since July 27.
“Rising equities always gives sentiment a boost,” said Cheng Wei, an analyst at Jiangxi Rich Futures Co. “To some extent - the relationship isn’t always so clear these days - the dollar’s performance will also influence metals prices.”
The December-delivery contract on the Shanghai Futures Exchange gained for the first time in three days, by as much as 1.4 percent, before ending the day 1.1 percent higher at 57,330 yuan ($8,431) a ton.
U.S. stocks advanced yesterday as investors speculated that recent declines in equities overshot the potential damage from a slowdown in the economy. The benchmark MSCI Asia Pacific Index gained for the first time in three days. The dollar dropped against a six-currency basket as traders increased bets that the Federal Reserve will cut interest rates to stimulate growth.
“Recent economic data has raised concerns about weakening demand but I don’t think it’s as bad as the price action in the past few days suggests,” said Cheng. “Supply remains constrained, with smelter utilization rates relatively low as the concentrates market remains tight.”
Aluminum in London advanced 0.8 percent to $2,019 a ton, zinc surged 3.9 percent to $2,040.50 ton, and lead jumped 2.8 percent to $2,015 a ton. Nickel rose 1.8 percent to $20,460 a ton and tin was 1.5 percent higher at $20,650 a ton.
http://www.bloomberg.com/news/2010-08-26/copper-climbs-for-first-time-in-three-days-as-equities-gain-dollar-drops.html
Zinc climbs, Copper Rebounds From One-Month Low on Hopes Chinese Demand Will Improve
By Glenys Sim - Aug 25, 2010 12:56 AM PT
Copper gained after a slump to a one-month low encouraged purchases by investors expecting demand to improve as the seasonally weak consumption period ends.
Copper for three-month delivery on the London Metal Exchange rose as much as 0.9 percent to $7,200 a metric ton, and traded at $7,181 at 3:52 p.m. in Singapore. The metal, used in construction and appliances, dropped to $7,137 a ton yesterday, the lowest level since July 27. The December-delivery contract on the Shanghai Futures Exchange ended little changed at 56,690 yuan ($8,338) a ton, after falling as much as 0.9 percent.
“The slow-demand season is nearing its end and we’re not seeing signs that the government will further clamp down on the property market,” said Liang Haisan, an analyst at CITIC Newedge Futures Co. “There will be people buying in anticipation of a pickup in demand next month.”
Immediate-delivery copper in Changjiang, Shanghai’s biggest cash market, has been trading above the most-active futures contract for the past week. The condition, known as backwardation, suggests near-term demand may increase.
Last week, copper inventories in Shanghai shrank for the first time in three weeks, by 3,499 tons to 110,371 tons, according to the exchange.
Copper is still down 3.6 percent this year as China’s regulators took steps to prevent asset-price bubbles. Chinese authorities boosted banks’ reserve requirements three times this year and introduced real-estate curbs to cool lending and speculation.
Aluminum in London advanced 0.4 percent to $2,035 a ton, while zinc climbed 1.1 percent to $2,013.50 a ton. Lead fell 0.2 percent to $2,008 a ton, nickel was unchanged at $20,600 a ton, and tin gained 0.2 percent to $20,430 a ton.
http://www.bloomberg.com/news/2010-08-25/copper-rebounds-from-one-month-low-on-hopes-chinese-demand-will-improve.html
Zinc down, Copper Declines as Slump in U.S. Housing Data to Damage Outlook for Demand
By Glenys Sim - Aug 23, 2010 7:31 PM PT
Copper dropped ahead of data that economists forecast will show the U.S. housing market slowed last month, dimming prospects for demand in the world’s second- largest user. The metal in Shanghai slumped to a one-week low.
Copper for three-month delivery on the London Metal Exchange fell as much as 0.6 percent to $7,210 a metric ton, and traded at $7,235.25 at 10:20 a.m. in Singapore. The December- delivery contract on the Shanghai Futures Exchange tumbled as much as 0.9 percent to 56,640 yuan ($8,329) a ton, the lowest level since Aug. 16, before trading at 56,800 yuan.
“We’re not bullish on metals at the moment as investors are plagued by economic worries,” said Chen Wenbin, an analyst at International Trade Futures Co. Copper in London has dropped 1.8 percent this year amid concern that growth may falter in the U.S. and Europe, damaging economies in Asian.
A report today by the National Association of Realtors may show July sales of existing U.S. homes plummeted 12.9 percent from June, the biggest monthly loss of 2010, according to the median estimate of economists surveyed by Bloomberg. New-home sales stayed at the second-lowest level on record last month, economists predict Commerce Department data will show tomorrow.
Aluminum in London rose 0.2 percent to $2,044 a ton, while lead was unchanged at $2,048 a ton. Zinc lost 0.4 percent to $2,035 a ton, nickel shed 0.2 percent to $21,150 a ton, and tin hadn’t traded.
http://www.bloomberg.com/news/2010-08-24/copper-declines-as-slump-in-u-s-housing-data-to-damage-outlook-for-demand.html
Zinc dips, Copper Fluctuates in New York on Dollar Movement and U.S. Rebound Concern
By Chanyaporn Chanjaroen - Aug 23, 2010 5:49 AM PT
Copper fluctuated in New York and London as the dollar swung between gains and losses and investors looked ahead to figures due this week that may signal a weakening U.S. economic rebound.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, erased a drop of as much as 0.3 percent before slipping again. Reports this week may show that sales dropped for existing homes in the U.S. and were unchanged for new dwellings. The country is the world’s second-largest consumer of copper after China.
“The negative sentiment regarding the U.S. recovery and ongoing doubts over China’s demand resumed their influence over markets last week and will likely hang over them again this week,” Alex Heath, head of London Metal Exchange trading at RBC Capital Markets in London, said in a daily report.
Futures for December delivery were little changed at $3.312 a pound at 8:27 a.m. on the Comex in New York. The contract gained as much as 0.6 percent and slid as much as 0.5 percent. Copper for three-month delivery climbed 0.3 percent to $7,279 a metric ton on the LME.
Gains by the U.S. currency make dollar-priced metals more expensive in terms of other monies. The dollar index has advanced 6.6 percent this year, contributing to LME copper’s 1.5 percent drop.
Figures due tomorrow from the National Association of Realtors will show July sales of existing homes in the U.S. plummeted 12.9 percent from June, the biggest monthly loss of 2010, according to the median estimate of economists surveyed by Bloomberg. A report on Aug. 25 may show that sales of new homes in the country were unchanged last month.
Chinese Imports
Construction accounts for a quarter of copper demand, according to the Copper Development Association.
Imports of refined copper into China dropped 23 percent from a year earlier to 224,723 tons in July, according to customs data today. Shipments gained 6 percent from June.
Hedge-fund managers and other large speculators cut their net-long position, or bets on higher prices, in New York copper futures in the week ended Aug. 17 by 13 percent to 14,479 contracts, according to U.S. Commodity Futures Trading Commission data.
LME-monitored copper stockpiles expanded 0.1 percent to 402,200 tons, paring this year’s drop to 20 percent. Canceled warrants, or orders to draw metal from LME-registered warehouses, fell 2.5 percent to 30,650 tons.
Including metal tracked by exchanges in Shanghai and New York, copper inventories totaled 604,080 tons, or about 12 days of global consumption based on Royal Bank of Scotland Group Plc’s estimate for demand this year of 18.2 million tons. That’s down from almost 14 days at the start of 2010.
Aluminum ‘Squeeze’
Aluminum for three-month delivery on the LME added 0.9 percent to $2,058.75 a ton. The borrowing fee for next-day delivery, the so-called tom-next spread, widened as far as $9 a ton per day, matching the 22-month high level traded Aug. 19, after closing at $1 on Aug. 20. The wider spread signals low availability of the lightweight metal for nearby dates.
“There’s a squeeze going on,” Dan Brebner, head of metals research at Deutsche Bank AG in London, said today by phone. Between 70 percent and 80 percent of LME aluminum stocks are held under rental and financing accords, meaning the metal is tied up and can only be released when related contracts expire, he said.
Global aluminum production may outpace demand this year more strongly than predicted because of expansion led by China, the biggest supplier and consumer, said Sumitomo Corp., Japan’s third-largest trading house.
Sumitomo increased its forecast because output in China “appears to be greater than we expected earlier this year,” Motoi Kamitani, manager of light-metal trading, said in an interview in Tokyo on Aug. 20.
Nickel dropped 1.3 percent to $21,270 a ton and tin rose 0.2 percent to $20,700 a ton. Lead gained 0.2 percent to $2,059 a ton and zinc lost 0.5 percent to $2,048 a ton.
http://www.bloomberg.com/news/2010-08-23/copper-may-slide-in-london-as-rebounding-dollar-erodes-demand-for-metals.html
Zinc declines, Copper Falls for Second Day in New York, Reducing Weekly Climb
By Anna Stablum - August 20, 2010 08:15 EDT
Aug. 20 (Bloomberg) -- Copper fell for a second day in New York and London, paring this week’s gain, after reports sparked concern about the strength of the recovery in the U.S., the world’s second-biggest consumer of the metal.
Copper yesterday erased a climb to a 10-day high and closed lower as the Federal Reserve Bank of Philadelphia reported an unexpected contraction in manufacturing. Separate figures showed that more Americans applied for unemployment benefits, rather than the decrease economists had predicted.
“We are going to see the metals going sideways for a short while, particularly if the macro data is continuing to look a little bit ropey,” said Tom Kendall, an analyst at Credit Suisse Group AG in London.
Futures for December delivery slid 5.35 cents, or 1.6 percent, to $3.286 a pound at 7:53 a.m. on the Comex in New York. The most-active contract is up 0.4 percent this week. Copper for delivery in three months dropped 1.1 percent to $7,222 a metric ton on the London Metal Exchange.
Inventories of copper tracked by the LME dropped today for the fourth time this week, signaling steady demand. Stockpiles shrank 1.7 percent for the week, the most in five weeks and the 26th contraction in a row on that basis.
‘Pretty Solid’
“From the fundamental perspective, it still looks pretty solid,” Kendall said. “The problem is the market and the shorter-term players from the fund side, who are reacting to the U.S. macroeconomic data.”
The Fed Bank of Philadelphia’s factory index fell to minus 7.7, compared with the median forecast for a gain to 7 from 58 economists surveyed by Bloomberg News. Revisions to U.S. economic growth next week will probably indicate the expansion slowed even more in the second quarter to 1.4 percent, according to a Bloomberg survey.
Still, a report released on Aug. 17 showed that U.S. industrial output rose more than economists had predicted.
LME copper is on course for a fourth weekly gain in five weeks. Rising prices and lower open interest, or the number of contracts outstanding, suggest that holders of short positions are exiting the market, according to Leon Westgate, an analyst at Standard Bank Plc in London. A short position is a bet on lower prices.
“Copper may be poised for a run higher as we head toward September,” he said in a report yesterday.
China’s Economy
Total market open interest advanced to a 17-month high on Aug. 12 and dropped 3 percent over the next three sessions, according to the latest LME data. Copper rose 1.8 percent on the exchange in the same span.
Markets are continuing to improve, and Chinese demand for consumer-related raw materials will gain as the nation’s economy develops, according to Rio Tinto Group, the world’s third- biggest mining company. China is the largest user of the metal.
“Consumer-oriented commodities are beginning to see demand in the Chinese market as a constructive maturation of Chinese economy,” Tom Albanese, Rio’s chief executive officer, told reporters today in Shanghai.
LME copper inventories dropped to 401,725 tons, the lowest level since Nov. 11, according to daily exchange figures. They are down 2.9 percent this month after sliding 8.3 percent in July. Stocks have fallen 20 percent this year, on course for the first annual drop since 2004.
Copper stockpiles monitored by the Shanghai Futures Exchange dropped for the first time in three weeks, falling by 3,499 tons to 110,371 tons.
Warrants Jump
Orders to draw metal from LME inventories, or canceled warrants, fell for the first day this week, sliding 2.9 percent to 31,450 tons. They surged 53 percent this week, the most in five months.
Aluminum for three-month delivery on the LME fell 2 percent to $2,025 a ton. The so-called tom-next spread paid to borrow metal for a day narrowed to $1 a ton. Yesterday it widened as far as $9, the widest level in 22 months.
The contango, cash aluminum’s discount to the three-month contract, widened to $6 a ton yesterday from the prior session’s $1.75, the narrowest level since March 2007, according to LME data.
Zinc shed 1.5 percent to $2,058 a ton. Two Chinese producers in the south of Gansu province halted output after landslides disrupted power supplies and transport links and damaged facilities, according to researcher Shanghai Metals Market.
Tin dropped 1.9 percent to $20,700 a ton, nickel fell 2.2 percent to $21,300 a ton and lead slid 1.7 percent to $2,070 a ton.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPiSKzE1ETZ0
Farallon Announces Extension Of Zinc And Copper Concentrates Contracts Up To December 2014
August 19, 2010, Vancouver, BC - Farallon Mining Ltd. ("Farallon" or the "Company") (TSX:FAN) announces that it has extended its zinc and copper concentrates contracts for 2 _ years with Trafigura Beheer BV Amsterdam, up to December 2014. More favourable terms have been agreed in both contracts reflecting the current market situation and adjusted to Farallon's quality.
For zinc, a fixed treatment charge has been negotiated for tonnage shipped between July 1st, 2010 and March 30th, 2011. From April 1st 2011 to September 30th 2012, a discount over the benchmark treatment charges will be applied to 50% of zinc concentrates production and starting 1st October 2012, a discount over the benchmark treatment charges will apply to 100% of Farallon production of zinc concentrates. In the case of copper concentrates fixed treatment and refining charges apply; however, from August 2011 benchmark treatment and refining charges will be applied.
For more than 2 years, since Farallon started production at the G-9 mine, the Company's concentrates have been shipped to smelters in Korea, China, Japan and Canada. Both Farallon zinc and copper concentrates are "clean" concentrates with unusually low levels of impurities. At the same time, both concentrates are high in precious metals. As a result, all smelters are fully satisfied with Farallon's quality, confirming the positioning of the Farallon brand in the international market.
Dick Whittington said: "We are very pleased to be able to restructure our concentrate off-take contracts and to extend our relationship with Trafigura. This is a key component in getting our products to market on a competitive basis and providing shareholder value at the same time."
Farallon operates the G-9 zinc mine on its Campo Morado Property in Guerrero State, Mexico. G-9 is a 1,500 tonnes per day, underground zinc mine with important by-product credits of copper, gold, and silver. G-9 has total cash costs1 in the lowest 10% of zinc producers worldwide. The Company is targeting to produce at an annualized production rate of 120 million pounds of zinc and 15 million pounds of copper per year.
For further details on Farallon, please visit the Company's website at www.farallonmining.com or contact Neil MacRae, Investor Relations Manager, at (604) 638-2160 or within North America at 1-877-688-2050.
ON BEHALF OF THE BOARD OF DIRECTORS
J.R.H. (Dick) Whittington, President & CEO
Notes:
(1) Total Cash Costs and Adjusted EBITDA are Non-GAAP Financial Measures. Please read page 8 of the Company's MD&A for 2nd Quarter 2010 for further information.
http://www.farallonresources.com/fan/NewsReleases.asp?ReportID=415087&_Type=News-Releases&_Title=Farallon-Announces-Extension-Of-Zinc-And-Copper-Concentrates-Contracts-Up-T...
Zinc little change, Copper Gains in New York Before Report on U.S. Leading Economic Indicators
By Anna Stablum - Aug 19, 2010 4:44 AM PT
Copper rose in New York and London to the highest price in more than a week before a report that may show a stronger gauge of the economic outlook for the U.S., the world’s second-biggest consumer of the metal.
The index of leading indicators probably climbed in July for the second time in four months, said economists surveyed by Bloomberg News. Separate figures may show that manufacturing sped up in the Philadelphia region and fewer Americans applied for jobless benefits.
“I expect a modestly growing U.S. economy,” said Peter Fertig, owner of Hainburg, Germany-based Quantitative Commodity Research Ltd. “That will be a supporting factor for base metals.”
Futures for December delivery gained 2.85 cents, or 0.8 percent, to $3.399 a pound at 7:28 a.m. on the Comex in New York. The most-active contract reached $3.41, the highest intraday price since Aug. 9. Copper for delivery in three months rose 1.1 percent to $7,470 a metric ton on the London Metal Exchange.
The Conference Board’s gauge of the outlook for the next three to six months, due at 10 a.m. in Washington, rose 0.1 percent after falling 0.2 percent in June, the median forecast of 58 economists in a Bloomberg News survey shows. The Federal Reserve Bank of Philadelphia’s general economic index, due at the same time, rose to 7.2 this month, the survey showed.
Building Inventories
Labor Department figures to be released at 8:30 a.m. in Washington may show initial jobless claims fell to 478,000 last week from 484,000 in the prior week, according to the survey median. Growth in the U.S. would promote restocking of metals, according to Fertig.
“Inventory buildup will still continue, and that is one of the supporting factors,” he said.
Copper inventories tracked by the LME rose to 403,525 tons after falling for four days to the lowest level since Nov. 12 as of yesterday, according to daily exchange figures. They are down 2.4 percent this month after sliding 8.3 percent in July. Stocks have fallen 20 percent this year, on course for the first annual drop since 2004.
Orders to draw metal from inventories, or canceled warrants, rose for a fourth day, gaining 4.7 percent to 32,400 tons. They have surged 58 percent this week, heading for the biggest jump in five months.
Aluminum Stockpiles
Aluminum for three-month delivery on the LME rose 0.4 percent to $2,114 a ton. Inventories of the lightweight metal tracked by the LME slipped 0.1 percent to 4.46 million tons. They have dropped 3.8 percent from a record high in January. An estimated 60 percent to 65 percent of LME stockpiles are tied into financing accords, according to Deutsche Bank AG.
“A lot of aluminum stocks at LME warehouses are earmarked as collateral for loans, and then they cannot be sold that easily,” said Fertig of Quantitative Commodity Research. “So the situation is tighter than the figures for warehouse inventories would suggest.”
Investors yesterday paid the most in 22 months to borrow aluminum for a day as the so-called tom-next spread widened to as much as $9 a ton. Today it traded as high as $6. Yesterday was the so-called prompt date, the day each month on which investors who opted to take delivery receive metal.
Stockpiles have risen 1.9 percent this week. Aluminum has dropped 5.3 percent on the LME in 2010 after last year’s 45 percent advance.
Under $2,000?
“Should stock-building continue, aluminum should come under more pressure,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said in a report today. “We expect prices below $2,000 a ton in the near term.”
The contango, cash aluminum’s discount to the three-month contract, widened to $6 a ton today from the prior session’s $1.75, the narrowest level since March 2007, according to LME data. Cash metal is at a premium to September-delivery aluminum, a so-called backwardation that increased to $17 at yesterday’s close from $10 the day before.
Tin climbed 1.9 percent to $21,400 a ton. LME inventories rose 0.1 percent to 14,065 tons and are up 1.4 percent this week. Cash tin’s premium to the three-month contract narrowed to $70 a ton yesterday from the prior day’s $140, according to LME data. It reached $200 a ton on Aug. 13, the widest level since Oct. 27.
Nickel gained 1.6 percent to $22,250 a ton, lead advanced 0.8 percent to $2,139 a ton and zinc was little changed at $2,136 a ton.
http://www.bloomberg.com/news/2010-08-19/copper-gains-in-london-before-report-on-u-s-leading-economic-indicators.html
Zinc drops, Copper Fluctuates in London Trading on Stockpile Decline, Dollar Movement
By Anna Stablum - Aug 18, 2010 2:18 AM PT
Copper fluctuated in London as stockpiles of metal shrank further and a stronger dollar reduced the appeal of industrial metals as an alternative investment.
Copper inventories tracked by the London Metal Exchange fell for a fourth day, and orders to draw metal from stocks, or canceled warrants, rose more than 10 percent for a third straight day. The U.S. Dollar Index, which measures the currency’s strength against six monies, climbed as much as 0.3 percent before erasing the gain.
Movement in the dollar “is the main driver at the moment,” Steve Hardcastle, an analyst at Sucden Financial Ltd. in London, said by phone. A stronger U.S. currency makes dollar- priced metals more expensive in terms of other monies.
Copper for delivery in three months fell $7, or 0.1 percent, to $7,375 a metric ton at 10:10 a.m. on the LME. The contract rose as much as 0.4 percent and slid as much as 0.6 percent. Futures for December delivery were little changed at $3.357 a pound on the Comex in New York.
LME copper stockpiles dropped to 403,300 tons, the lowest level since Nov. 12, according to daily exchange figures. They are down 2.5 percent this month after sliding 8.3 percent in July, the most since June 2009. Stocks have fallen 20 percent this year, on course for the first annual drop since 2004.
Canceled warrants rose 13 percent to 30,950 tons. They have surged 51 percent this week, heading for the biggest jump in five months.
Tin Drops
Tin for three-month delivery on the LME fell 0.6 percent to $21,175 a ton. The contract reached $21,650 yesterday, the highest intraday price since Aug. 22, 2008. Inventories in LME- monitored warehouses dropped 0.1 percent to 14,050 tons today, of which almost a third is booked for delivery.
“Consumption is running reasonably well from the electronics industry, which is the main area,” Sucden’s Hardcastle said. “Tin looks like being still in short supply, exactly the same time as consumption is picking up.”
Tin production in Indonesia, the world’s largest exporter, may plunge about 20 percent this year because of bad weather, the energy ministry said on Aug. 11.
The backwardation, cash tin’s premium to the three-month contract, narrowed to $140 a ton yesterday from the prior session’s $165, according to LME data. It reached $200 a ton on Aug. 13, the widest level since Oct. 27.
Zinc fell 0.2 percent to $2,119 a ton. Smelters in China, the world’s biggest producer and consumer, may boost output next month as summer maintenance programs are completed, lifting utilization rates from the lowest level since March 2009, a researcher said.
A total of 41 smelters used 68 percent of their capacity in July to produce 282,000 tons, according to a survey by data provider Shanghai Metals Market. “The overall utilization rate should rebound after mid-August,” Zhu Yiman, an analyst at Shanghai Metals, said by phone today.
Aluminum dropped 0.6 percent to $2,129 a ton and nickel slipped 0.2 percent to $21,900 a ton. Lead advanced 0.2 percent to $2,133.75 a ton.
http://www.bloomberg.com/news/2010-08-18/copper-fluctuates-in-london-trading-on-stockpile-decline-dollar-movement.html
Lead up, Zinc gains, Copper Advances for Second Day in New York Before U.S. Production Figures
By Anna Stablum - Aug 17, 2010 4:57 AM PT
Copper rose for a second day in New York and London before reports that may show stronger industrial production and housing starts in the U.S., the world’s second- biggest consumer of the metal.
Output increased 0.5 percent in July, according to the median estimate of 73 economists surveyed by Bloomberg News. A separate report may show work began on more houses for the first time since April. Prices also gained as the U.S. Dollar Index, which measures the currency’s strength against six monies, fell for a second day.
“The greenback is correcting lower, so we are seeing a rebound across the whole complex,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said today. “The housing data is certainly important.”
Futures for December delivery climbed 4.5 cents, or 1.4 percent, to $3.3455 a pound at 7:40 a.m. on the Comex in New York. Copper for delivery in three months rose 1.4 percent to $7,350 a metric ton on the London Metal Exchange. All of the six main metals traded on the LME advanced, led by zinc.
The Federal Reserve’s industrial-production figures are due at 9:15 a.m. in Washington. Commerce Department figures to be released 45 minutes earlier may show housing starts climbed to a 560,000 annual rate last month from June’s 549,000 pace, the lowest in eight months, according to the median estimate in a Bloomberg survey.
Chinese Economy
Construction accounts for a quarter of copper demand, according to the Copper Development Association.
In China, the leading economic index climbed 0.8 percent to 147.0 in June after a revised 0.9 percent gain in May, a report from the New York-based Conference Board showed today. China, the largest copper consumer, overtook Japan to become the world’s second-biggest economy in the second quarter, Japanese data showed yesterday.
Investor confidence slumped in Germany, the third-largest copper consumer. The ZEW Center for European Economic Research said today its index of investor and analyst expectations, which aims to predict developments six months ahead, fell to 14 from 21.2 in July, its fourth straight decline. Economists surveyed by Bloomberg predicted a reading of 20.
The dollar index dropped as much as 0.6 percent. A weaker dollar makes metals priced in the currency cheaper in terms of other monies.
Inventories Decline
Copper stockpiles tracked by the LME shrank for a third day to 405,025 tons, the lowest level since Nov. 13, according to daily exchange figures. They are down 2.1 percent this month after sliding 8.3 percent in July, the most since June 2009. Stocks have fallen 19 percent this year, on course for the first annual drop since 2004.
Canceled warrants, or orders to draw copper from inventories, rose 12 percent after yesterday’s 20 percent jump, the biggest in more than two months. Today canceled warrants advanced to 27,350 tons, the highest level since Aug. 5.
Tin for three-month delivery on the LME gained 2 percent to $21,525 a ton after reaching $21,650, the highest intraday price since Aug. 22, 2008. Inventories in LME-monitored warehouses rose for a second day to 14,065 tons. One party held between 40 percent and 49 percent of available LME stockpiles on Aug. 13, down from 50 percent to 79 percent in the prior session, according to the latest exchange data.
Aluminum climbed 0.9 percent to $2,138 a ton. The contango, cash metal’s discount to the three-month contract, widened to $9 a ton yesterday from the prior session’s $4.50, the narrowest level since March 2007, according to LME data.
Nickel rose 1.9 percent to $21,950 a ton and zinc gained 2.3 percent to $2,120 a ton. Lead advanced 1.9 percent to $2,135 a ton.
http://www.bloomberg.com/news/2010-08-17/copper-rises-for-second-day-before-u-s-production-housing-starts-reports.html
Zinc climbs, Copper Leads Advance in Industrial Metals as Weaker Dollar Boosts
By Glenys Sim - Aug 15, 2010 11:11 PM PT
Copper led an advance in industrial metals, gaining by the most in a week, as a weaker dollar increased the appeal of raw materials priced in the U.S. currency. Zinc, lead and nickel advanced.
Three-month copper on the London Metal Exchange rose as much as 1.3 percent to $7,250.25 a metric ton, the most since Aug. 9, before trading at $7,248.25 at 1:52 p.m. in Singapore. The November-delivery contract on the Shanghai Futures Exchange traded little changed at 57,390 yuan ($8,436) a ton, after losing as much as 1.4 percent earlier.
“The dollar’s giving commodities prices a boost,” Ni Xiaolei, a trader at Donghai Futures Co., said from Jiangsu today. “Short-term price direction will be determined by sentiment and what happens in other markets like currencies and stocks.”
Copper slumped 2.9 percent last week, snapping three weeks of gains, after the Federal Reserve said the U.S. recovery is weakening, European industrial production unexpectedly declined in June and reports showed China’s industrial output, retail sales, new lending, producer prices and money supply grew in July at a slower pace than in June.
The dollar dropped for the first time in six days against a basket of six currencies including the euro and yen as U.S. retail sales rose in July by less than economists had forecast, raising concerns that growth is slowing.
Japan’s gross domestic product grew at a slower-than- expected pace in the three months ended June 30, government figures today showed, adding to signs the global recovery is faltering and triggering losses in Asian equities.
Aluminum in London rose 0.9 percent to $2,128 a ton, zinc climbed 1.6 percent to $2,080 a ton, and lead gained 1.9 percent to $2,095 a ton. Nickel increased 1.7 percent to $21,639 a ton, while tin advanced 0.3 percent to $20,870 a ton at 1:58 p.m. in Singapore.
To contact the reporter for this story: Glenys Sim in Singapore at sgsim4@bloomberg.net
http://www.bloomberg.com/news/2010-08-16/copper-advances-in-london-new-york-as-last-week-s-decline-prompts-buyers.html
Zinc adds, Copper Advances for Second Day in London as Dollar Weakens: LME Preview
By Chanyaporn Chanjaroen - Aug 13, 2010 12:31 AM PT
Copper rose for a second day in London as a weaker dollar buoyed the appeal of commodities as an alternative investment.
-- Copper rose $29, or 0.4 percent, to $7,284 a metric ton
-- Aluminum was little changed at $2,164.75 a ton. RSI 60.4.
-- Zinc added 1.2 percent to $2,080 a ton. RSI 58.4.
-- Lead increased 1.3 percent to $2,127 a ton. RSI 59.3.
-- Nickel advanced 1.9 percent to $21,822 a ton. RSI 58.1.
-- Tin was 0.7 percent higher at $20,690. RSI 64.1.
Other markets: Last % Change % YTD
U.S. Dollar Index 82.307 -0.4 5.7
Crude oil $76.70 1.3 3.4
Gold $1,217.50 0.3 11.0
MSCI World Index 1,108.87 0.3 -5.1
Economic Events:
Forecast Prior Time
(London)
Euro zone trade balance 1.0B -3.4B 10:00
Euro zone GDP 0.7% 0.2% 10:00
U.S. consumer price index 0.2% -0.1% 13:30
U.S. advance retail sales 0.5% -0.5% 13:30
U. of Michigan confidence 69.0 67.8 14:55
U.S. business inventories 0.2% 0.1% 15:00
http://www.bloomberg.com/news/2010-08-13/copper-advances-for-second-day-in-london-as-dollar-weakens-lme-preview.html
Zinc little changed, Copper May Decline for Third Day on Concern About Uneven World Economies
By Chanyaporn Chanjaroen - Aug 12, 2010 5:47 AM PT
Copper may fall for a third day in New York and London amid concern that uneven economies in China, the U.S. and Europe will crimp demand for industrial metals.
European industrial production unexpectedly declined in June, led by a drop in durable consumer goods such as home appliances, figures showed today. The pace of recovery in the U.S. is likely to be “more modest” than forecast, the Federal Reserve said this week, and figures showed that Chinese industrial output rose the least in 11 months.
“People are still worried about the economic outlook,” David Thurtell, a strategist at Citigroup Inc. in London, said today by phone. “The fear is overdone.”
Futures for September delivery were little changed at $3.2535 a pound at 8:30 a.m. on the Comex in New York, after gaining as much as 0.6 percent and sliding as much as 0.7 percent. Copper for delivery in three months rose 0.1 percent to $7,210 a metric ton on the London Metal Exchange.
Output in the economy of the 16 nations that use the euro dropped 0.1 percent from May, when it increased 1.1 percent, the European Union’s statistics office said today. Economists had projected a gain of 0.6 percent, the median of 32 forecasts in a Bloomberg survey showed.
Europe consumes 20 percent of global copper output and 15 percent to 25 percent of aluminum, zinc, nickel and lead production, according to Barclays Capital. Copper is among raw materials used by appliance makers such as Whirlpool Corp. and Electrolux AB.
Dollar Erases Slide
Copper also fluctuated as the dollar erased a drop. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, added as much as 0.6 percent. A stronger dollar makes metals priced in the currency more expensive in terms of other monies.
“Price weakness is also on the back of a dollar rebound,” Citigroup’s Thurtell said.
Copper is down 2.3 percent this year after more than doubling in 2009. Only nickel and tin have gained among the six main metals traded in the LME. The dollar index is up 6 percent in 2010.
“I think there will be further losses,” Thurtell said. He suggested buying copper at prices about 5 percent below current levels, or about $6,845 a ton for LME metal.
LME-monitored copper stockpiles expanded 0.7 percent to 409,075 tons after six declines in a row. Canceled warrants, or orders to draw metal from LME-registered warehouses, rose 2 percent to 21,900 tons.
12 Days of Usage
Including metal tracked by exchanges in Shanghai and New York, copper inventories totaled 604,344 tons, or about 12 days of global consumption based on Royal Bank of Scotland Group Plc’s estimate for demand this year of 18.2 million tons. That’s down from almost 14 days at the start of 2010.
Premiums to the LME cash price for copper paid by Chinese importers fell as low as $70 a ton on a cost, insurance and freight basis to Shanghai this week, according to Grace Qu, a consultant at researcher CRU in Beijing. That was the lowest since April.
“In a market that has become concerned again about an economic slowdown, these signals from the physical market may shake confidence and pressure prices again,” Barclays Capital analyst Gayle Berry in London wrote in a daily report.
Aluminum for three-month delivery on the LME rose 0.1 percent to $2,144 a ton and zinc was little changed at $2,037 a ton. Tin added 1.5 percent to $20,150 a ton, nickel fell 2.3 percent to $21,200 a ton and lead was unchanged at $2,065 a ton.
http://www.bloomberg.com/news/2010-08-12/copper-may-advance-on-london-metal-exchange-lifted-by-weakening-dollar.html
Farallon Announces Second Quarter Financial And Operating Results Record Production Performance Continues
26m lb of Zinc Produced at a Total Cash Cost1 of $0.05/lb payable zinc
August 11, 2010, Vancouver, BC - Farallon Mining Ltd. ("Farallon" or the "Company") (TSX:FAN) announces its financial and operating results for the three months ended June 30, 2010. Currency amounts are stated in United States Dollars, unless otherwise noted. This news release should be read in conjunction with the Company's financial statements and MD&A which are available on SEDAR and the Company's website.
The Company's G-9 mine produced a record 26.3 million pounds of zinc and 2.3 million pounds of copper in concentrates at a total cash cost1 of $0.05/lb of payable zinc, generating operating earnings of $11.3 million and $6.6 million in cash from operations before changes in non-cash working capital.
"The G-9 mine has continued the trend of increasing production on a quarterly basis, and is now achieving its operating cost targets" said President and CEO Dick Whittington. "Production increased 10% from 1,650 tpd in the first quarter to 1,816 tpd in the second quarter, or 21% above the design throughput of 1,500 tpd. At the same time, unit production costs declined 17% from $77/t milled to $64/t milled. As a result, the G-9 mine is now one of the lowest cost zinc mines in the world on a total cash cost1 basis at $0.05/lb of paid zinc. Operationally, our focus is improving the mine output while, corporately, we continue to seek business combinations that will allow us to deliver on our objective of becoming a mid-tier, multi-mine company."
A summary of the results for the three months ended June 30, 2010 ("Q2") compared to the three months ended March 31, 2010 ("Q1") are as follows:
Financial
* Operating earnings of $11.3 million, up from $9.1 million in Q1.
* Net earnings in Q2 were impacted by a non-cash charge of $2.1 million for stock-based compensation related to the Company's annual stock option grant, an unrealized foreign exchange loss of $2.0 million and a $1.1 million non-cash loss on the deemed extinguishment of long-term debt arising from long-term debt restructuring. As a result, net earnings were $2.0 million, down from $6.2 million in Q1.
* Cash flow from operations before changes in non-cash working capital of $6.6 million, up from $6.0 million in Q1.
* Gross revenues of $39.1 million, up from $37.6 million in Q1.
* Non-GAAP Adjusted EBITDA1 of $11.4 million, up from $9.0 million in Q1.
* Working capital of $24.4 million at June 30, 2010, up from $18.2 million at March 31, 2010.
During Q2, the Company restructured its long-term debt facility with Credit Suisse. As part of the restructuring, the facility was expanded and drawn to $36 million from $30 million and repayment terms were extended to 48 months from 36 months. The fixed interest rate was lowered from 6.97% to 6.62%. Principal repayments began in July 2010 and will continue monthly until June 2014, unless repaid earlier. As a result, the Company's annual interest and debt expenses have been reduced.
Costs
* Unit operating costs of $64/tonne milled, down from $77/tonne milled in Q1.
* Total cash cost per payable pound of zinc1 of $0.05/lb down from $0.36/lb in Q1.
Operations
* Processed 165,244 tonnes of ore (average throughput 1,816 tonnes per day "tpd" or 21% above the design throughput of 1,500 tpd) grading 8.7% zinc, 0.9% copper, 222 g/t silver and 2.7 g/t gold.
* Produced 25,342 tonnes of zinc concentrate and 9,011 tonnes of copper concentrate, containing an estimated 26.3 million pounds of zinc, 2.3 million pounds of copper, 595,309 ounces of silver and 6,722 ounces of gold from the G-9 mine.
* Recovered 82% zinc, 68% copper, 53% silver and 41% gold from ore into zinc and copper concentrates.
* Sold approximately 25,388 tonnes of zinc concentrate grading 48% zinc and 10,433 tonnes of copper concentrate grading 11.4% copper. Payable metals contained in concentrate were 22.3 million pounds of zinc, 2.4 million pounds of copper, 478,825 ounces of silver and 4,243 ounces of gold.
Metal Prices
* Realized sales prices for zinc and copper were of $0.89/lb and $3.11/lb, respectively, down from Q1 realized prices of $0.99/lb zinc and $3.23/lb copper.
The net effect of the 10% decline in zinc price and the 4% decline in copper price was estimated to be $2.5 million in cash flow from operations before changes in non-cash working capital.
Expansion Project
In November 2009, Company's Board of Directors approved a project to expand the existing operations from 1,500 tpd to 2,000 tpd. Axxent Engineering was engaged to provide engineering, procurement and construction management services for the mill portion of the project and key pieces of equipment were procured, including additional regrind mills and rougher flotation cells.
The mill portion of the expansion was suspended during the period as it is apparent that the mill is capable of processing greater than 2,000 tpd without any additional equipment installation. The capital budget allocated to the mill has been re-allocated to the mining operations to improve ore output from the mine. A review of the mill capacity has concluded that the mill is likely capable of producing at a steady-state operation of 2,300 tpd without any significant additional capital expenditures.
Outlook
At year-end 2009, the Company announced its objective to be operating at 1,500 tpd for the first six months of 2010 and then increase to 2,000 tpd by July 1, 2010. During the first half of 2010, throughput actually averaged 1,750 tpd and, as such, the Company is well ahead of its objectives as of July 1, 2010. However, management now believes that it is appropriate to express caution regarding whether the mining operations will be able to deliver the planned quantity of ore on a regular basis until underground development and capital projects are completed in the latter half of 2010. Accordingly, the Company is reducing throughput rates to 1,500 tpd during the third quarter of 2010 at which time ramp-up to 2,000 tpd will be further evaluated.
Management Changes
The Company is pleased to announce the hiring of Mr. Kerry Barker as the new General Manager of G-9. Kerry is a Geological and Mining Engineer with over 15 years of worldwide industry experience. Kerry obtained his B.Sc. in Geological Engineering, his B.Sc in Mining Engineering and his Masters of Science in Mining Engineering from the University of Utah in Salt Lake City. He was most recently Mining Manager of the Palmarejo Operations for Coeur d'Alene Mines in Mexico. He was also previously Operations Manager at Freeport-McMoRan Copper & Gold.
Kevin Weston, Chief Operating Officer, has resigned and, effective August 17, will be leaving the organization.
"Kevin has made a significant contribution to the Company over the last year, particularly in the areas of safety and mill performance. We thank him for his contributions and wish him the best in his future endeavors. Farallon is a different Company today from when Kevin joined us a year ago" said Dick Whittington. "Kerry is a tremendous addition and offers a wealth of knowledge and experience to the Farallon senior management team, particularly in the area of underground mining. The Company looks forward to supporting Kerry as he brings steady state operations to G-9."
Gold Project Development
During the period, the Company announced the initiation of a formal engineering study on the original deposits at Campo Morado - El Largo, Reforma, Naranjo and El Rey. It is the Company's intention to present the results of this work as a Pre-Feasibility Study ("PFS") by July 1, 2011. Since the announcement of the scope of work on July 6, the Company has engaged Melis Engineering to perform metallurgical test work, Stephen Godden as a primary mining consultant and AMC Consultants to deliver the PFS, including signing off on Mineral Reserves. Knight Piesold Consulting of Vancouver, BC will address the environmental aspects of the study including tailings, waste rock and water management. The project manager for the PFS will be Dr. David Stone, P.Eng., of Hunter Dickinson Services Inc.
Dick Whittington said "The completion of a PFS on the historical deposits at Campo Morado is the first step in unlocking shareholder value from the nearly 1 million ounce of contained gold and 60 million ounce of contained silver in these resources2 with the objective of having a second mine in operation at Campo Morado by July 1, 2013."
Exploration
The Company issued an update on exploration activities in a separate news release dated August 10, 2010.
Conference Call
Farallon will hold a conference call tomorrow, Thursday August 12, at 8:00 am Pacific time (11:00 am Eastern) to discuss these results. The call can be accessed at (647) 427-7450 or toll-free at (888) 231-8191. A live webcast will also be available at www.farallonmining.com.
Farallon operates the G-9 zinc mine on its Campo Morado Property in Guerrero State, Mexico. G-9 is a 1,500 tonnes per day, underground zinc mine with important by-product credits of copper, gold, and silver. G-9 has total cash costs1 amongst the lowest of zinc producers worldwide. The Company is targeting to produce at an annualized production rate of 120 million pounds of zinc and 15 million pounds of copper per year.
For further details on Farallon, please visit the Company's website at www.farallonmining.com or contact Neil MacRae, Investor Relations Manager, at (604) 638-2160 or within North America at 1-877-688-2050.
ON BEHALF OF THE BOARD OF DIRECTORS
J.R.H. (Dick) Whittington, President & CEO
Notes:
1. Total Cash Costs and Adjusted EBITDA are Non-GAAP Financial Measures. Please read page 8 of the Company's MD&A for further information.
2. Indicated resources of 11.209 million tonnes grading 4.66% Zn, 0.67% Cu, 1.44 % Pb, 2.67 g/t Au and 165 g/t Ag at a $90 GMV/t cutoff using metal prices of US$0.51/lb for Zn; $1.00/lb for Cu; US$0.25/lb for Pb; US$375/oz for Au and US$5.50/oz for Ag. Further information is included in the Company's June 29, 2010 news release.
No regulatory authority has approved or disapproved the information contained in this news release
http://www.farallonresources.com/fan/NewsReleases.asp?ReportID=414024&_Type=News-Releases&_Title=Farallon-Announces-Second-Quarter-Financial-And-Operating-Results-Record-Pr...
Zinc up .2%, Copper Falls for a Second Day in London as Dollar Strengthens: LME Preview
By Chanyaporn Chanjaroen - Aug 11, 2010 12:19 AM PT
Copper fell for a second consecutive day in London as a stronger dollar curbed demand for commodities including industrial metals.
-- Copper fell $53, or 0.7 percent, to $7,247 a metric ton
-- Aluminum lost 0.8 percent to $2,153 a ton. RSI 59.2.
-- Zinc gained 0.2 percent at $2,090 a ton. RSI 60.4
-- Lead slipped 0.9 percent at $2,105 a ton. RSI 58.5.
-- Nickel declined 1.1 percent to $21,954 a ton. RSI 60.7.
-- Tin retreated 0.5 percent at $20,500 a ton. RSI 66.4.
Other markets: Last % Change % YTD
U.S. Dollar Index 81.472 0.7 4.6
Crude oil $79.67 -0.7 0.4
Gold $1,199.90 -0.4 9.4
MSCI World Index 1,142.28 -0.3 -2.2
Economic Events:
Forecast Prior Time
(London)
BOE quarterly inflation report 10:30
U.S. MBA mortgage applications -- 1.3% 12:00
http://www.bloomberg.com/news/2010-08-11/copper-falls-for-a-second-day-in-london-as-dollar-strengthens-lme-preview.html
Farallon provides exploration update for first half 2010 - Excellent results from underground drilling continue
Last update: 8/10/2010 9:08:00 AM
VANCOUVER, Aug 10, 2010 /PRNewswire via COMTEX/ -- 10 m of 31% zinc in Area 8 & 4.2 m of 13.24 grams of gold/tonne in new target area
Farallon Mining Ltd. ("Farallon" or the "Company") (CA:FAN) announces that exploration efforts at its G-9 mine in Guerrero State, Mexico, continue to provide excellent results. Several new drill holes - all drilled from underground - along with new interpretations of the geology of the G-9 deposit, have led to several new discoveries adjacent to the G-9 mine and opened up the potential for further discoveries going forward. All of the holes announced in this news release are additive to the Company's resource base and are readily accessible from current workings.
The 2010 exploration program has focused on three priorities:
1. Near-mine targets to build mineral reserves and resources and to increase the G-9 mine life. 2. Identifying and testing other areas of mineralization beyond G-9. 3. Identifying and developing gold zones occurring adjacent to the G-9 mining area. Near-mine Targets -----------------
Knowledge of the geology of the G-9 deposit, through underground mapping, opening up of new mining areas and underground stope definition drilling, has led to a reinterpretation of the geology in, and around, the G-9 deposit. This has led to some exciting opportunities, some of which are new and some of which are revisiting previous areas that were thought to have been mined out. The attached map (Figure 1 - ) highlights hole locations for the holes announced. Selected results are given in Table 1 with highlights as follows:
1. Re-opening the West Extension: - The West Extension has been shown to extend above the previously known resource with holes UGM10-042 and UGM10-043. Hole UGM10-043 intersected 6.3 metres of 17.2% zinc, 1.7% copper, 290 g/t silver and 1.73 g/t gold. - Drilling has also shown that mineralization extends down-dip from the previous resources with holes UGM10-144 and UGM10-150. Hole UGM10-150 intersected 28.5 metres of 11.6% zinc, 1.6% copper and 184 g/t silver. 2. North flank of Mining Area 8: - The known resource in mining Area 8 was previously thought to "pinch-off" to the North. - Drilling has now shown (UGM10-049 and UGM10-050) that the mineralization actually widens and continues to the North towards mining Area 3 with drill hole UGM10-050 intersecting 10.0 metres of 31.2% zinc, 3.1% copper and 306 g/t silver. 3. Extension of Mining Area 3: - Mineralization has now been shown to extend to the South of Area 3 beyond the previous resources. Drill hole UGM10-195 intersected 3.9 metres of 22.11% zinc, 4.07 % copper and 136 g/t silver. - Drill hole UGM10-196 intersected 5.0 metres of 24.3% zinc, 3.2% copper and 26 g/t silver. - The same drilling also showed mineralization from Area 8 extending North towards Area 3 with UGM10-196 also intersecting 6.7 metres of 18.2% zinc, 5.8% copper and 50 g/t silver. 4. Extension of Mining Area 7: - Mineralization has now been shown to extend to the South and East of the previous resources. - Drill hole UGM10-219 intersected 8.0 metres of 9.57% zinc, 1.94% copper, 217 g/t silver and 2.85 g/t gold. 5. Extension of the Abajo Zone: - The mining operations have completed development to the Abajo zone and as such, the first underground exploration holes were drilled. Early results show the mineralization extends to the South of previously estimates resources. - Drill hole UGM10-222 intersected 12.2 metres of 12.1% zinc, 1.4% copper and 209 g/t silver.
Dick Whittington, President and C.E.O. commented "With exploration drilling results now available for the first half of the year's program, we are pleased with the progress that is being made on each of our exploration priorities. The G-9 deposit is exhibiting similar characteristics to other polymetallic VMS deposits worldwide. Once in production, the ability to better understand the geology and define targets near the mine increases significantly, as does the potential for exploration success. G-9 is proving the case in point as new discoveries are being made and old areas of interest are being opened up again, as our knowledge base increases. We continue to be very excited about the potential for further discoveries around the G-9 mine and in the felsic horizon that hosts the G-9 deposit."
Identification and Testing Other Areas of Mineralization --------------------------------------------------------
Earlier in the year, the Company conducted a surface drilling campaign with the objective of finding addition mineralization on the Abajo horizon beyond G-9. Surface drilling identified one specific area of interest north of the Abajo zone to the Southwest of the Naranjo deposit. Hole DDH10-834 (Figure 2 - ) intersected pyrite-rich mineralization and alteration at the Abajo contact which is consistent with hydrothermal activity. After evaluating the results of the first phase of surface drilling, the Company decided to proceed with a deep-penetrating Titan 24 Induced Polarization geophysical survey. Surface drilling was suspended to focus on underground drilling until the completion of the survey.
The Titan 24 survey is currently underway with Quantec Geophysics on site. The survey will cover 1.9 square kilometres (Figure 2 - ) of the mineralized area at Campo Morado. The results of the survey will, potentially, be useful in delineating areas of potential massive sulphide accumulations underground, which will then be tested by drilling from surface. This will form the basis of the second half of our 2010 exploration program. Boart Longyear currently has two surface diamond drills on site, ready to commence drilling as required.
Development of Gold Zones -------------------------
Subsequent exploration drilling and further analysis of historic drill-hole data have further enhanced the understanding of the gold zones occurring adjacent to the G-9 Mine workings (Figure 3 - ). Three new target areas have been identified near drill hole 6546, drill hole 7671 and drill hole UGM10-219. These zones which have high precious metal values and generally low base metal values (Table 2) are outside the previous resource estimate.
In addition, new underground drill results have substantiated the results obtained in the earlier holes that were announced in the news release dated April 21, 2010. Drill hole UGM-073 intersected 11.28 g/t gold over 5.4 metres and drill hole UGM-077 intersected 8.18 g/t gold over 4.7 metres in Gold Zone 1 (Table 2).
The Company is still in the first phase of its three pronged program to quantify the economic potential of these new gold zones. Underground drilling will continue to delineate further zones and resources so that the next phase two can be initiated and these zones can be incorporated into the mining plan at the G-9 Mine. As well, in conjunction with the above the Company is proceeding with a test program to determine the metallurgical characteristics of these zones and, hence, the optimum method to maximize recovery of the gold and silver through the G-9 mill.
Dick Whittington said: "We are very pleased with the progress to date of the gold exploration program around the G-9 mining areas. We are locating additional targets indicating the potential for a more widespread phenomena than previously thought. With the recent strength in the gold price, our ability to add gold-rich resources to the G-9 mining plan has the potential to add significant shareholder value."
Dan Kilby, P.Geo., is the qualified person for Farallon Mining and he has reviewed this news release accordingly. Sample preparation for Acme Labs is done in Guadalajara, Mexico and the analysis is done in Vancouver B.C. Samples analyzed by AcmeLabs are assayed for gold by fire assay fusion with an ICP or gravimetric finish, with the latter method used for additional assays if ICP analysis reportsgrades higher than 10 g/t Au. Silver, copper, lead and zinc, as well as 20 additional elements, are determined for all samples by Agua Regia digestion followed by ICP-ES finish. In the case of silver, re-analysis using gravimetric finish is carried out when ICP-ES analysis reports a grade higher than 300 g/t Ag. In the case of lead and zinc, re-analyses using 0.1 gram splits are carried out if the ICP-ES results report grades higher than 4% Pb and 20% Zn. Re-analyses for copper are not required, due to the linear nature of ICP-ES assay returns over a wide value range that far exceeds the range of copper grades at G-9. If ICP-ES analysis reports zinc grades higher than 10% Zn, the samples are assayed for sulphur, by LECO furnace. Samples analyzed at the on-site laboratory are assayed for silver, copper, lead and zinc by Agua Regia digestion followed by an AA finish. In the case of silver, a second round of Aqua Regia digestion, followed by an AA finish, is carried out when primary analysis reports a grade higher than 300 g/t Ag. Multi-element analyses and gold assays are not currently carried out.
Farallon operates the G-9 zinc mine on its Campo Morado Property in Guerrero State, Mexico. G-9 is a 1,500 tonnes per day, underground zinc mine with important by-product credits of copper, gold, and silver, and with total cash costs(1) in the lowest 10% of zinc producers worldwide. The Company is targeting to produce at an annualized production rate of 120 million pounds of zinc and 15 million pounds of copper per year.
ON BEHALF OF THE BOARD OF DIRECTORS J.R.H. (Dick) Whittington President & CEO
No regulatory authority has approved or disapproved the information contained in this news release
Note 1 - Total cash costs are a non-GAAP financial measure. Please refer to the Company's most recent MD&A filed on SEDAR or on the Company's website for more information.
Forward Looking Information
This news release includes certain statements that may be deemed "forward-looking statements." All statements in this release, other than statements of historical facts, that address future production, reserve or resource potential, continuity of mineralization, exploration drilling, operational activities, production rates, costs to completion and events or developments that the Company expects, or is targeting, are forward-looking statements. Although the Company believes that the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward looking statements and may require achievement of a number of operational, technical, economic, financial and legal objectives. The likelihood of continued future mining at Campo Morado is subject to a large number of risks, including obtaining lower than expected grades and quantities of mineralization and resources, lower than expected mill recovery rates and mining rates, changes in and the effect of government policies with respect to mineral exploration and exploitation, the possibility of local disputes including blockades of the company's property, the possibility of adverse developments in the financial markets generally, fluctuations in the prices of zinc, gold, silver, copper and lead, obtaining additional mining and construction permits, preparation of all necessary engineering for ongoing underground and processing facilities as well as receipt of additional financing to fund mine construction, development and operation, if needed. Such funding may not be available to the Company on acceptable terms or on any terms at all. For more information on the Company and the risk factors inherent in its business, investors should review the Company's Annual Information Form at .
Table 1.
------------------------------------------------------------------------- Drill True Hole Mining From To Interval Width Au Ag Cu Zn Number Area (metres) (metres) (metres) (metres) g/t g/t % % ------------------------------------------------------------------------- UGM10-042 West Extension 74.3 80.2 5.9 5.9 1.17 89 1.55 12.72 ------------------------------------------------------------------------- UGM10-043 West Extension 86.8 93.4 6.6 6.3 1.73 290 1.70 17.24 ------------------------------------------------------------------------- UGM09-144 West Extension 88.0 93.0 5.0 4.2 1.75 91 1.63 19.80 ------------------------------------------------------------------------- UGM09-150 West Extension 86.0 92.0 6.0 5.0 na 83 1.92 14.43 ------------------------------------------------------------------------- UGM09-150 West Extension 101.0 135.0 34.0 28.5 na 184 1.57 11.58 ------------------------------------------------------------------------- inclusion West Extension 109.0 117.0 8.0 6.7 na 221 2.02 18.71 ------------------------------------------------------------------------- UGM10-049 Area 8 14.0 18.0 4.0 NA na 257 3.01 30.28 ------------------------------------------------------------------------- 29.0 35.0 6.0 NA na 209 2.72 35.22 ------------------------------------------------------------------------- UGM10-050 Area 8 20.0 27.0 7.0 NA na 60 0.89 9.83 ------------------------------------------------------------------------- 38.0 48.0 10.0 NA na 306 3.12 31.16 ------------------------------------------------------------------------- UGM10-195 Area 3 24.5 28.8 4.3 3.9 na 136 4.07 22.11 ------------------------------------------------------------------------- Area 8 50.3 53.0 2.8 2.3 na 126 0.63 13.95 ------------------------------------------------------------------------- UGM10-196 Area 3 26.0 32.0 6.0 5.0 na 160 4.11 22.37 ------------------------------------------------------------------------- Area 8 49.5 57.5 8.0 6.7 na 98 1.05 18.19 ------------------------------------------------------------------------- UGM10-219 Area 7 156.0 167.9 11.9 7.8 2.85 217 1.94 9.57 ------------------------------------------------------------------------- UGM10-222 Abajo 125.0 137.2 12.2 NA na 209 1.38 12.12 -------------------------------------------------------------------------
Table 2.
------------------------------------------------------------------------- Drill True Hole Gold From To Interval Width Zn Cu Ag Au Number Zones (metres) (metres) (metres) (metres) % % g/t g/t ------------------------------------------------------------------------- 6546 New Target 541.2 546.0 4.9 4.9 6.62 0.38 306 7.14 ------------------------------------------------------------------------- 7671 New Target 491.0 505.0 14.0 14.0 2.58 0.55 185 6.94 ------------------------------------------------------------------------- 7671 New Target 510.0 514.0 4.0 4.0 1.77 0.42 201 4.32 ------------------------------------------------------------------------- 7671 New Target 570.0 578.0 8.0 8.0 1.73 0.58 373 10.21 ------------------------------------------------------------------------- UGM10-219 New Target 149.6 156.0 6.4 4.2 3.52 0.58 967 13.24 ------------------------------------------------------------------------- UGM10-073 Au Zone 1 44.0 51.0 7.0 5.4 8.06 0.30 822 11.28 ------------------------------------------------------------------------- UGM10-075 Au Zone 1 49.8 53.1 3.3 2.9 3.64 0.54 435 8.25 ------------------------------------------------------------------------- UGM10-076 Au Zone 1 38.0 44.3 6.3 4.3 0.24 0.61 568 6.88 ------------------------------------------------------------------------- UGM10-077 Au Zone 1 43.0 49.0 6.0 4.7 1.85 0.47 411 8.18 -------------------------------------------------------------------------
SOURCE Farallon Mining Ltd.
Copyright (C) 2010 PR Newswire. All rights reserved
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Zinc dips, Copper Slides on Concern China's Cooling Property Market May Curb Demand
By Anna Stablum - Aug 10, 2010 5:10 AM PT
Copper fell to a one-week low in New York and London after reports showed slower gains in real-estate prices in China, the world’s largest consumer of the metal.
The Shanghai Composite Index of equities slid the most in six weeks amid concern the government’s lending and property restrictions are curbing demand. Copper also dropped as the dollar strengthened, eroding demand for metals as an alternative investment. Still, imports of copper into China climbed for the first time in four months.
“At the macro level, July’s trade data confirmed that activity in the trade sector is cooling,” Daniel Major, an analyst at RBS Global Banking & Markets in London, said by phone. “But from a commodity perspective, copper-import numbers were supportive.”
Futures for September delivery slid 6.75 cents, or 2 percent, to $3.2865 a pound at 7:57 a.m. on the Comex in New York. The most-active contract reached $3.277, the lowest intraday price since July 30. Copper for delivery in three months fell 2.3 percent to $7,254 a metric ton on the London Metal Exchange.
Property prices in 70 major Chinese cities climbed 10.3 percent from a year earlier in July, the slowest pace for six months, a report showed. Construction accounts for a quarter of copper demand, according to the Copper Development Association.
Arbitrage Trades
Shipments of copper and products into China advanced 4.5 percent to 342,901 tons in July from June, the customs office said. They were down 16 percent from a year earlier, according to Bloomberg calculations.
Imports had been supported by so-called arbitrage trading, in which merchants bought metal in London and sold it in Shanghai to take advantage of the price differential between the markets.
“Despite some evidence of arbitrage trading, real copper demand in China has remained relatively robust during the seasonally weak summer months, despite fears of a sharp slowdown in demand from the construction sector,” RBS’s Major said.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, added as much as 0.6 percent. A stronger dollar makes metals priced in the currency more expensive in terms of other monies.
Inventories Decline
Copper stockpiles tracked by the LME shrank for a fifth day to 408,375 tons, the lowest level since Nov. 16, according to daily exchange figures. They slid 8.3 percent in July, the most since June 2009, and are down 19 percent this year, on course for the first annual drop since 2004.
Canceled warrants, or orders to draw metal from stockpiles, fell for a fifth session to 22,875 tons.
Tin for three-month delivery on the LME fell 3.2 percent to $20,625 a ton. The metal, mainly used in electrical soldering, yesterday climbed as high as $21,500, the highest intraday price since Aug. 22, 2008.
“We continue to view tin as having among the tightest fundamental outlooks of all the base metals,” Leon Westgate, an analyst at Standard Bank Plc, said in a report e-mailed yesterday. “The uptrend that has been in place since the first quarter 2009 remains intact and should continue through 2011, with no signs that fundamental tightness will ease in the foreseeable future.”
Inventories in LME-monitored warehouses rose 0.6 percent today to 14,990 tons, paring this year’s decline to 44 percent. A single party holds between 40 percent and 49 percent of stockpiled LME tin, according to exchange data as of Aug. 6. That was down from between 50 percent and 79 percent in the prior session.
Nickel fell 2.6 percent to $22,198 a ton and aluminum slid 1.4 percent to $2,152 a ton. Zinc dropped 2.6 percent to $2,094 a ton and lead fell 3.2 percent to $2,130 a ton.
http://www.bloomberg.com/news/2010-08-10/copper-slides-on-concern-china-s-cooling-property-market-may-curb-demand.html
Lead rises, Copper Advances For First Time in Three Days in London on Dollar Weakness
By Bloomberg News - Aug 9, 2010 12:26 AM PT
Copper in London increased for the first time in three days as a weaker dollar boosted the appeal of the metal as an alternative asset.
The metal for three-month delivery gained as much as 1.2 percent to $7,461.25 a metric ton on the London Metal Exchange, and traded at $7,459 at 14:56 p.m. in Shanghai. It fell 1.8 percent in the past two trading sessions.
“As the U.S. dollar is obviously in a downward trend, investors are optimistic about the copper price outlook,” said Li Rong, an analyst at Dalu Futures Co.
The dollar traded near an eight-month low against the yen and a three-month low against the euro after a report last week showed U.S. employers cut more jobs than forecast in July. The dollar was at 85.65 yen as of 4:03 p.m. in Tokyo from 85.51 yen in New York on Aug. 6, when it reached 85.02 yen, the lowest since Nov. 27. The greenback traded at $1.3277 per euro from $1.3280, after touching $1.3334 on Aug. 6, a three-month low.
“Investors will also look at economic and trade data, but the importance is undermined by investment demand amid a flood of money,” Li said.
China will release its preliminary July trade data for copper and aluminum tomorrow, and base metals production figures on Aug. 11, along with the industrial output data.
Hedge-fund managers and other large speculators increased their net-long position in New York copper futures in the week ended Aug. 3, according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets prices will rise, outnumbered short positions by 12,960 contracts, the commission said.
Shanghai Gains
Copper for November delivery in Shanghai increased by 0.8 percent to close at 58,280 yuan ($8,614) a ton.
China’s Ministry of Industry and Information Technology said excess capacity for 2,087 companies in 18 outdated industries, including steel, cement, nonferrous metals producers, should be shut by the end of September.
“The government has been talking about closing outdated capacity for years,” said Wang Zhouyi, an analyst with China International Futures (Shanghai) Co. “I don’t think it’s anything new, and it won’t move the market much. Besides, the affected capacity for copper is very small.”
China’s industrial output in July may have expanded at its slowest pace since August 2009, retreating from a 13.7 percent gain in June to 13.4 percent, according to economists surveyed by Bloomberg News.
Aluminum in London gained 1.1 percent to $2,214 a ton, zinc rose 1.7 percent to $2,165 a ton, and lead advanced 2.6 percent to $2,216 a ton. Nickel increased 1.4 percent to $22,400 a ton, and tin was little changed at $20,750 at 14:59 p.m. in Shanghai.
http://www.bloomberg.com/news/2010-08-09/copper-in-london-advances-for-first-time-in-three-days-on-dollar-weakness.html
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