An increasing number of companies are opting for MHP instead of the more traditional nickel metal (briquettes) and nickel matte production routes. But South Korea remains one of the only countries outside of China building MHP conversion capacity.

Despite this, there are currently only two nickel sulfate producers in South Korea that can take MHP as a primary feedstock to produce battery grade nickel sulfate.

Concerns remain with some market participants over the environmental impact of MHP.

MHP and matte are primarily produced in Indonesia, using fossil fuels as a power source, leading to a higher carbon footprint.

Fastmarkets assessed the daily nickel mixed hydroxide precipitate outright price, cif China, Japan and South Korea at $13,300-13,500 per tonne on November 17, down slightly from $13,800-14,000 per tonne the previous day.

The daily nickel mixed hydroxide precipitate payable indicator, % London Metal Exchange, cif China, Japan and South Korea was at 76-79% on November 17, stable over the week.

As part of the deal, Trafigura will supply Korea Zinc with 20,000-40,000 tonnes per year of feedstock.

“With the energy transition in progress, Korea Zinc is committed to solidifying its position as the world’s leading non-ferrous metal refiner in the field of nickel, a key battery material,” Korea Zinc chairman Yun B Choi said.

The agreement between Korea Zinc andhttps://xml.metalbulletin.com/Article/5113351/Battery-raw-materials-all/Korea-Zinc-Trafigura-eye-nickel-smelter-sulfate-refinery-joint-venture.html Trafigura comes after the two parties discussed a joint venture for a nickel smelting and sulfate refining project in November 2022.

Fastmarkets assessed the nickel sulfate, cif Japan and Korea price at $4,070 per tonne on Friday November 17. The price has been weakening over the past two months from $4,881.47 per tonne on September 8.

Keep up to date with the latest news and insights on our dedicated battery materials market page.

The post Korea Zinc-Trafigura all-in-one nickel refinery to expand East Asian MHP supply appeared first on Fastmarkets.

Aluminium price on China’s economy

Range-trading has characterized the LME aluminium price as the decline since the start of October attempts to stabilize. At the beginning of the year, market participants had overestimated China’s ability to stimulate its way out of the Covid-lockdown era, putting too much emphasis on a fast and robust recovery. However, as China’s economic performance disappointed, optimism turned into pessimism, leading to a decline in base metal prices. We believe the market is now underestimating China’s eagerness to implement growth-supportive policies, which could result in a scramble to catch up if China’s economy starts to regain strength.

This sentiment aligns with our belief that there will be a gradual stabilization in the latter months of the year.

We expect a more favorable macroeconomic environment for the base metals market as China’s economic recovery accelerates. Seasonal price factors, especially during the fourth quarter, could also influence positively.

LME aluminium prices has pulled back since its October high at $2,367 per tonne. While we anticipate a little bit more downside pressure, we believe that these lower values will continue to attract dip buyers. But, we need to see more evidence of follow-through buying from here on to justify our positive year-end outlook. Learn more.

Copper prices a mixed picture

Global copper mine production has risen modestly by 1.3% during the first eight months of 2023 despite challenges in significant mining regions like Chile, China, Indonesia, Panama, and the United States. Unforeseen weather patterns and disruptions have impacted output, leading to a significant downturn in production volumes. For the full year, we anticipate a 0.8% overall growth in mine production, assuming unplanned disruptions continue to affect operations in the final quarter.

Refined copper production globally has shown a positive trend, increasing by around 5% this year. China has been a key driver, with a remarkable 12% surge in refined production. However, challenges continue with declines in regions like Chile and the United States, highlighting disparities in global refined copper production due to operational challenges. Demand for refined copper has varied worldwide, with an overall increase of 2.5% in consumption. China remains the primary driver, with a substantial 7.0% rise in consumption, solidifying its position in the global copper market.

Copper prices face challenges from market sentiment, momentum, and positioning. However, a tactical rebound seems plausible, driven by China’s revitalized economic momentum and sustained policy support. We await clearer technical confirmations before being more confident in our view. The risk associated with bearish positions at the current price point seems unattractive. A clearer indication of a US economic recession would be required to validate a bearish stance, which the existing data does not substantiate. Learn more.

Zinc market surplus, China’s demand

The International Lead and Zinc Study Group (ILZSG) reported a surplus of 21,900 tonnes in the global refined zinc market for August, increasing from a revised 2,900-tonne surplus in July. The cumulative surplus for the year’s first eight months stood at 489,400 tonnes.

World metal stocks grew by 109,700 tonnes from January to August, while LME and SHFE stocks combined only increased by 62,491 tonnes year-to-date. The stock data suggests metal moving into warehouse finance deals rather than the open market.

In China, January to August saw a 3% year-on-year growth, but macro uncertainties pose challenges elsewhere as zinc demand ex-China contracted by 2.5% during the same period. ‘Apparent’ zinc consumption in China is estimated to increase by only 0.5% year-on-year in September, while indicators show respectable ‘real’ demand, including:

• White goods production, such as washing machines (+24.2%) and refrigerators (+13.2%), continue to display solid year-on-year growth.
• Vehicle production has also increased by 7.3% in the first nine months.

The zinc concentrate market is tightening, with falling spot TCs. However, the transition into the refined market will take time, and with around 1 million tonnes of mine capacity scheduled to start operations next year, further refined oversupply is predicted for 2024. Without greater smelter discipline, zinc price gains are expected to be limited to bear-market rallies. Learn more.

Tin prices decline on reduced consumption

In late October, tin prices on the London Metal Exchange experienced a significant decline, dropping by 2.4%. This was the weakest performance among base metals. Despite China’s better-than-expected GDP in Q3 and a weaker US dollar, negative sentiment dominated global risk appetite last week, limiting any potential recovery in tin and other industrial metals.

We expect tin consumption to decrease by around 1.6% to 371,000 tonnes in 2023. This downward trend follows a recalibration from the pandemic recovery bounce in 2021 and is influenced by macroeconomic challenges like inflation. However, technological innovations in sectors such as renewable energy and electric vehicles (EVs) partially offset these declines, reflecting a nuanced demand landscape for tin in 2023. Various sectors exhibit differentiated performance trajectories for tin usage, including:

• The solder sector, which makes up the largest portion of global tin consumption, is projected to remain relatively stable with a subtle growth of 0.4%.
• The integration of tin in technology applications like solar panels and EVs plays a crucial role in maintaining this stability. Notably, the use of tin in solar ribbon production, accounting for approximately 12% of the solder sector, drives significant innovation-driven demand.
• The chemical sector is expected to experience a decline in tin usage by 4.9%, reflecting the ongoing impacts of the global pandemic and broader economic downturn.
• Additionally, the tinplate sector is set to decline by 4.2%, primarily due to macroeconomic challenges and suboptimal food harvests.

Our stance on the tin price forecast remains steady: Despite the possibility of near-term market fluctuations due to unfavorable macroeconomic conditions, we anticipate a more optimistic outlook as we move deeper into the fourth quarter. We foresee market participants giving more weight to China’s economic resurgence, which may lead to some short-covering as the year concludes. Learn more.

To understand the complex market conditions influencing price volatility, download our monthly base metals price forecast, including the latest copper price forecasts today. Get a free sample.

The post What’s ahead for base metals prices appeared first on Fastmarkets.

The data collection and premium values were not affected by the early publication.

Specifications for the premium in question are as follows:

MB-ZN-0005 Zinc SHG min 99.995% ingot premium, ddp Midwest US, US cents/lb
Quality: Min 99.995% special high grade zinc ingot, conforming to LME specifications and relevant BS EN standards
Quantity: 25 tonnes
Location: Delivered consumer works, Midwest US
Delivery: Within 4 weeks
Unit: US cents per pound
Payment terms: 30 days, other payment terms normalized
Publication: Weekly, Tuesday 3-4pm London time

For more information, or to provide feedback on the early publication of these prices, or to provide information by becoming a data submitter to these prices, please email at pricing@fastmarkets.com. Please add the subject heading “FAO: Grace Asenov.” Please indicate if comments are confidential. Fastmarkets will consider all comments received and will make comments not marked as confidential available upon request.

To see all Fastmarkets’ pricing methodology and specification documents, go to: https://www.fastmarkets.com/methodology.

The post Early publication of Fastmarkets SHG zinc US premium appeared first on Fastmarkets.

“In general, there is a very strong alignment, and where there isn’t, our team digs into exactly why – and generally, it’s because there’s been a difference between where the contract traded during the majority of the pricing window and where it traded at the end,” he told Fastmarkets in a recent interview.

“I’m not suggesting one price is right or wrong, but even when there are differences, you can very clearly explain them,” he added.

The changes will start from January 2024 and affect the LME copper, aluminium, nickel, zinc and lead contracts. The move follows an industry consultation and will see the LME amend its VWAP methodology to include cash, three-month and the first four third-Wednesday monthly contracts in all its base metals contracts except for tin.

The aluminium and lead contracts will be the first to adopt the methodology change with effect from January 22. This will be followed by the copper, zinc and nickel contracts on March 18.

The exchange is phasing the implementation to ensure participants have adequate time to prepare for the changes, Chamberlain said. The LME has also made several modifications to its plans, particularly around timing, to give the market more time to prepare for the changes, Chamberlain noted.

“A lot of people came to us and said, we need time to build some algorithms to help us trade the closing price, or to get our teams used to it, to do a parallel run internally,” he added.

While it marks a significant change from the current pricing methodology, copper and aluminium will eventually have just seven out of a total 123 dates calculated by the expanded VWAP and the remaining 116 dates by the current “last price” and expert judgement methodology, Chamberlain told Fastmarkets.

VWAP journey

He said the exchange’s “evolutionary journey” with VWAP had required several behavioral changes from its members. It had also, he acknowledged, led to concerns the LME was moving too far down the electronic path or that its members wouldn’t be in a position to guarantee prices.

That journey began in 2019, when the LME began a trial in which the three-month nickel closing price was determined exclusively by reference to an LMEselect pricing window via the VWAP function. Following the trial, the close prices returned to the ring, and the LME extended a consultation period about the use of electronic close prices.

During the Covid-19 pandemic, the LME ring suspended trading and moved to fully electronic pricing. When the ring reopened in September 2021, closing prices continued to be determined electronically, and only official prices returned to ring trading.

“This extension of VWAP is a significant change, but I’m confident about it. I speak to a lot of clients and members who say that they’re confident as well, although you never want to blasé about these things,” Chamberlain said.

“We heard lots of views in VWAP consultation, and on balance, they were orientated toward change,” he added.

Chamberlain noted that calls to expand the closing price methodology came primarily from the financial market sector who prioritize the closing prices. At the same time, the consultation highlighted that the physical community did not want to lose the open outcry trading ring for the lunchtime official prices, he said.

Off-warrant stock

The LME is gearing to release the results of consultations launched earlier this year to provide greater visibility of the build-up of warrantable material in its warehouses, Chamberlain said.

In February 2022, the LME introduced off-warrant stock reporting to increase transparency.

It is now proposing to extend these requirements to include all unwarranted metal in LME-licensed warehouses that could be warranted in the future.

It is also proposing to make permanent a backwardation limit on tomorrow/next contracts and a delivery deferral mechanism. These were implemented last year to help mitigate the potential effects of low-stock environments and enhance the LME Group’s deferral powers, the exchange said at the time.

“What I can say, without giving too much away from the consultation, is that there is a genuine desire to have more transparency in the LME market, and so I think the consultation has been very well received,” Chamberlain told Fastmarkets.

The consultation will address questions raised around practicalities, including exactly how the rules would work, and around complexity, such as how warehouses would administer the new requirements, he said.

In Hotter Commodities, special correspondent Andrea Hotter covers some of the biggest stories impacting the natural resources sector. Sign up today to receive Andrea’s content as it is published.

The post LME trialing VWAP expansion ahead of January launch, CEO says: LME Week | Hotter Commodities appeared first on Fastmarkets.

“The continuously falling zinc price has made the mine unprofitable, so operations had to be suspended until conditions turn for the better,” a market participant based in South America said.

The London Metal Exchange three-month zinc price closed at $2,289.50 per tonne on Wednesday, August 16, down by more than 30% from the beginning of this year, when it had gone above $3,400 per tonne.

At the end of May, the metal’s price dropped to about $2,236 per tonne, a near three-year low since July 2020.

With profitability being affected, mine closures or production cuts have already been seen in major resource-rich areas. The zinc price has slipped below $2,500 per tonne, a generally accepted breakeven point for most of the mines outside China, Fastmarkets has heard.

After Swedish miner Boliden announced in June that it was putting its Tara mine in Ireland on care and maintenance, Australian miner Aeris Resources planned to suspend its Jaguar mine in Western Australia in September due to low prices. The King Vol and Mungana mines in northern Queensland, operated by Australia’s Aurora Metals, also suspended production earlier this year.

“I won’t be surprised if more shutdowns happen,” a market participant based in South America said, adding that treatment charges (TCs) to China were expected to go down in the next few months amid tighter supply of overseas concentrates.

Fastmarkets’ price assessment of the zinc spot concentrate TC, cif China, was $160-190 per tonne on August 11, falling by more than 30% compared with $250-280 per tonne on January 13.

Because most Chinese mines switch to domestic feedstock during summer, buying appetite for spot imported cargoes remained low. Fastmarkets will continue to monitor both ends of the price range in future pricing sessions.

The post Volcan suspends work at Islay mine in Peru on falling zinc price appeared first on Fastmarkets.

Fastmarkets’ pricing database has been updated to reflect these corrections.

These prices are assessed fortnightly and the next publication date will be on Tuesday August 22.

For more information, or to provide feedback on this pricing notice, or if you would like to provide price information by becoming a data submitter to these prices, please contact Shiyue Zhao at pricing@fastmarkets.com. Please add the subject heading: “FAO Shiyue Zhao: Zinc premiums Southeast Asia assessments.”

To see all Fastmarkets’ price methodology and specification documents, please go to: https://www.fastmarkets.com/about-us/methodology.

The post Correction to zinc Southeast Asia premiums appeared first on Fastmarkets.

US nonferrous scrap exports increased by 2.54% to 293,826 short tons in October, up from 286,534 tons in September. For January-October, exports rose by 6.08% to 2,954,963 tons from 2,785,629 tons in the same period last year.

On a percentage and tonnage basis, zinc scrap exports continued to have the largest gains for year-to-date volumes, with exports up 316.17% to 197,308 tons in January-October from 47,411 tons in the same comparison last year. Shipments in October, however, decreased 15.30% to 9,979 tons from 11,781 tons in September.

India remained the largest importer of US zinc scrap in October at 3,102 tons, down 31.87% from 4,553 tons in September. Year to date, exports to India rose 144.52% to 37,646 tons compared with 15,396 in the first ten months of 2021.

Taiwan was the second largest importer of US zinc scrap in October at 1,680 tons imported, down 29.56% from the 2,385 tons imported in September. Year to date, exports to Taiwan increased 121.11% to 25,828 tons shipped in January-October 2022 compared with 11,681 shipped in the same period of 2021.

Spain was the third largest importer of US zinc scrap, also showing large percentage gains on a month-on-month and year-on-year basis. Spain imported 1,217 tons of US zinc scrap in October, up 187.03% from 424 tons imported in September. Imports increased 382.57% on the year, with Spain taking in 1,800 tons in the January-October period, compared with 373 tons over the same time in 2021.

Exports to Malaysia fell 40.81% month on month to 689 tons in October, but increased 1,546.24% year on year, rising to 107,878 tons in January-October 2022, compared with 6,553 tons in the same period of 2021.

Lead scrap exports increased by 10.17% sequentially to 4,345 tons in October from 3,944 tons in September. For January-October, lead scrap exports increased by 11.38% to 37,847 tons from 33,979 tons the previous year.

In the month, India and South Korea were the top importers of US lead scrap, taking in 1,714 and 1,132 tons, respectively.

Nickel exports fell 4.12% on the month to 2,976 tons in October, from 3,104 tons in September. In January-October, nickel scrap exports rose 85.46% to 24,421 tons, up from 13,168 tons in 2021.

Year to date, Canada was the largest importer of US nickel scrap at 13,754 tons January – October, up by 56.40% from 8,794 tons in 2021.

Aluminium

Aluminium scrap exports excluding UBCs totaled 152,113 tons in October, up 4.08% from 146,146 tons in September. Exports for the January-October period fell by 8.21% to 1,455,434 tons from 1,585,645 tons in the first ten months of 2021.

Malaysia was the top importer in October at 35,803 tons, down 10.02% from 39,791 tons in September. From January-October, the country imported 314,957 tons, down 26.02% from 425,758 tons in the same period in 2021. Year to date, Malaysia took up 21.64% of market share of US aluminium scrap exports, compared with 26.85% of market share in 2021.

India was second, taking in 32,113 tons in October, up 7.63% from 29,836 tons in September. For the first ten months of this year, India imported 305,065 tons, up 4.42% from 292,154 tons in January-October 2021. On the year, India took 20.96% of market share of US aluminium scrap exports, up from 18.42% of market share in 2021.

South Korea ranked third, taking in 23,688 tons in October, up 13.81% month on month. In January-October, imports also rose 12.16% to 236,298 tons in 2022, compared with 210,688 tons in the same period of 2021. In year-on-year comparisons, South Korea took up 16.24% of market share, up from 13.29% of market share in 2021.

On a percentage basis, year-to-date exports to China had the highest drop with 4,152 tons shipped in January-October, down 56.51% from 9,548 tons year on year. Imports also fell 22.10% month on month to 765 tons imported in October, compared with 982 tons in September. China’s market share for January-October fell to 0.29% in 2022, compared with 0.60% in 2021.

Meanwhile, exports to Turkey had the largest percentage increase, rising by 58.58% to 10,338 tons in January-October from 6,519 tons in the same period a year before. Exports to Turkey also increased 15.76% month on month to 191 tons in October from 165 tons in August. Market share also grew to 0.71% in the first ten months of 2022, compared with 0.41% in 2021.

UBC exports declined 9.02% in October to 35,634 tons, down from 39,167 tons the previous month. Year to date, exports of UBCs rose 36.47% to 367,620 tons from 269,379 tons in the first ten months of 2021.

India remained the largest importer of UBCs in October, despite a 20.59% decrease month on month. The country took in 12,895 tons of UBCs in October, down from 16,238 tons in September. Year to date, India’s imports increased 38.97% to 132,503 tons in January-October 2022, from 95,345 tons in 2021.

Mexico surpassed Malaysia to be the second-largest UBC importer, accepting 6,134 tons in October, up 9.67% from the 5,593 taken in September. Year to date, Mexico’s imports of UBCs have climbed exponentially to 56,269 tons taken in January-October, up 461.17% from 10,027 tons in 2021.

Malaysia was the third-largest UBC importer, with the country accepting 5,685 tons in October, down 11.34% from 6,412 tons in September. Year to date, imports to Malaysia increased 2.68% to 46,517 tons in January-October, compared with 45,303 tons in the same period of 2021.

Copper

US copper scrap exports totaled 88,779 tons in October, up 7.75% from 82,392 tons in September. Shipments for the first ten months of the year also increased by 4.34% to 872,333 tons from 836,047 tons in 2021.

Shipments to China, the biggest buyer of US copper scrap, rose 21.47% to 27,632 tons in October, up from 22,748 tons in September. On a year-to-date basis, deliveries to China rose by 28.44% to 269,275 tons from 209,646 tons in January-October 2021. China’s market share also grew in the year to 30.87%, up from 25.08% during the first ten months of 2021.

India was the second-leading destination, importing 10,658 tons of copper scrap in October, up 3.31% from 10,317 tons taken in September. US copper scrap exports to India increased 78.39% in year-to-date volumes, to 82,188 tons in January-October from 46,073 tons in the same period of 2021. India’s market share similarly increased to 9.42% in 2022, up from 5.51% in 2021.

Canada came in third, with 9,846 tons imported in October, up 14.06% from 8,632 tons imported in September. Canada imported 100,996 tons of copper scrap in the first ten months of 2022, down 6.17% from 107,638 tons the year before. Over the same period, Canada’s market share percentage dropped to 11.58%, from 12.87% in 2021.

Year to date, Malaysia had the biggest percentage decrease in imported tons. For January-October, the country imported 61,430 tons, down 58.43% from 147,781 tons in the first ten months of 2021. Malaysia’s market share in the same period also declined by more than 10%, reaching 7.04% in 2022, compared with 17.68% in 2021.

Turkey continued to have the highest year-on-year increase, with 3,417 tons imported in the first ten months of 2022, up 319.26% from the 815 tons taken in the same period in 2021. Turkey’s market share saw a small percentage increase, with the country taking 0.39% of US imports in 2022 compared with 0.10% in 2021.

Imports to the United Arab Emirates also exponentially increased in October, with the country taking in 1,041 tons, up 515.98% from the 169 tons taken in September. Year-on-year, imports to the UAE increased by 27.55%, and the percentage of market share increased to 0.73%.

Prices

Aluminium UBC prices decreased in September when exporters booked their tonnages for October.

Fastmarkets’ assessment of the aluminium scrap used beverage cans, domestic aluminium producer buying price, fob shipping point US began September at 74-78 cents per lb and fell to 68-72 cents per lb during the month. The price was last assessed at 73-78 cents per lb on December 8.

Fastmarkets’ assessment of the copper scrap No1 bare bright, discount, buying price, delivered to brass ingot makers remained unchanged in September, spending the entire month at 8-11 cents per lb. The discount was last assessed at 8-12 cents per lb on December 7.

Fastmarkets’ assessment of the lead scrap whole batteries buying price, delivered smelters US declined in September, starting the month at $23-25 per hundredweight and ending at $19-22 per cwt. The price was last assessed at $20-24 per cwt on December 13.

Fastmarkets’ assessment of the zinc scrap new zinc clippings buying price, delivered smelters US saw a slight decrease in September, starting the month at 88-91 cents per lb and ending at 86-89 cents per lb. The price was last assessed at 86-90 cents per lb on December 13.

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The Mooresboro facility produces 120,000 short tons (108,862 tonnes) per year of SHG zinc and expects to reach nameplate capacity of 155,000 tons in 2023.

The facility also produces continuous galvanizing grade zinc and gypsum from waelz oxide.

There are three other facilities in the world — in Italy, Japan and Namibia — that also produce SHG zinc from recycled zinc; however, these facilities also use zinc ore in their production.

The achievement took longer than expected, de Wet explained: a number of unfortunate events, including technical problems, bankruptcy, a major fire and the Covid pandemic, hampered the process.

The first zinc was produced at the plant on April 28, 2019, the same day that a fire destroyed a considerable portion of the cell house. The cell house was rebuilt, and start-up was planned for February 2020 — “a month before Covid [pandemic] hit,” de Wet said.

At that time, the Mooresboro facility was owned by American Zinc Products (AZP), a subsidiary of American Zinc Recycling, which itself was bought by Befesa in August 2021.

Befesa closed the acquisition of AZP on September 30, 2022, telling its suppliers that the company intended to “continue operations at the AZP Mooresboro, [North Carolina] facility with zero interruptions to production and the receipt of goods and services.”

Befesa is the largest recycler of electric-arc furnace (EAF) dust globally, with operations in Europe, Asia, and the US.

The post Befesa produces SHG solely from recycled zinc; to reach capacity in 2023 appeared first on Fastmarkets.

The three-month futures prices at 9.00am were as follows, compared to the previous 5pm close:

– Copper: $8,513 per tonne, up 0.2%
– Aluminium: $2,459.50 per tonne, down 0.2%
– Nickel: $30,140 per tonne, up 12%
– Zinc: $3,082.50 per tonne, up 2%
– Lead: $2,169 per tonne, up 0.3%
– Tin: $21,400 per tonne, up 0.4%

Market participants were focused on the nickel price, which quickly soared to an intraday peak of $30,960 per tonne just after 9am, representing a 14.98% increase in the contract price, just $3 away from the 15% limit.

The three-month nickel price has since retreated somewhat, but it remains at significantly high levels, most recently at $30,185 per tonne.

This significant surge in the nickel price has come on markedly low volumes, with just 1,045 lots traded.

There was a notable emergence of strike call options on the LME for $40,000-50,000 per tonne for December 2022, raising concerns that the nickel market could be pushed through a period of further volatility in what has already been an extraordinary year.

The shift higher was notable for the absence of news as a driving force.

“Nickel stood out as the only base metal that still has its March-like vicious rally, with double digit gains,” Fastmarkets analyst Andy Farida said on Monday.

“Despite the sharp spike in the nickel price, we are unsure what was the major catalyst that brought about the move. The US Dollar Index appears to have found support near 106.50 and there is a relatively light schedule of economic data this week,” he added.

The nickel price had gained 13% over the course of last week while the base metals as a whole reacted positively to macro drivers that included better-than-expected consumer price data from the US on Wednesday.

“Most of the move up last week has been attributed to stop-loss buying, fund and [commodity trading advisor] buying and no doubt with a few [algorithmic traders] jumping on for the ride,” Kingdom Futures director Malcolm Freeman said.

“The LME base metals are pricing in a shift in macroeconomic dynamics,” Farida said.

“A weaker US Dollar Index, a soft US consumer price index reading for October and optimism over China’s plan to reopen its economy via the easing of its controversial Zero Covid policy are fueling the move higher in base metals prices. In addition, lighter funds positioning means new investors can push prices higher, a contrast to overcrowded trade conditions,” he added.

Elsewhere, the rest of the base metal complex was also trending higher, except for aluminium, as markets seem to be little affected by news late last Friday that the LME would be maintaining the ‘status quo’ in regard to the acceptability of Russian metal on the exchange.

The three-month copper price edged marginally higher, though there has been a significant movement in the LME warehouse stocks.

Around 10,275 tonnes of copper were reportedly delivered into LME warehouses on Monday, primarily to warehouses in Rotterdam. On top of this notable inflow, there was also a 12,900-tonne re-warranting of material in LME warehouses in Hamburg.

The moves buck a recent trend where copper stocks had been drawn down significantly on fear of market tightness for refined material.

Market participants were keeping a close eye on a meeting between US President Joe Biden and Chinese President Xi Jingping, taking place in Bali on Monday, which could signal the future direction of the relationship between the two nations.

For more information on the current nickel market, take a look at our dedicated page for nickel market analysis.

The post LME nickel price soars, narrowly avoids ‘disruption event’ as base metals futures mostly rise appeared first on Fastmarkets.

All base metals prices have gone up strongly, with rumors circulating widely that China was considering an alteration to its zero-Covid policy.

There was market chatter on Tuesday morning suggesting that “a Reopening Committee [was] being formed and led by Wang Huning, a standing member [of China’s ruling] Politburo,” according to Zenon Ho of financial services provider Marex’s metals desk.

While this was not confirmed, it was said that the committee planned to review Covid-19-related data from the US, Hong Kong and Singapore to assess the possibility of China reopening at some point next year, Ho added.

The price increases across the base metals complex were in part due to these rumors.

“It’s all down to China,” Fastmarkets analyst Boris Mikanikrezai said. “We have heard rumors of reopening out of China, which pushed risk assets in the country sharply higher [CSI 300 index up by 3.6% on the day]. This produced a tailwind for all base metals, which are highly sensitive to China macro dynamics.”

Nickel’s price was up by 8.2% from Monday’s 5pm-close, continuing its progress upward following rises on Tuesday morning. As well as benefiting from the rumors about China’s zero-Covid policy, nickel was also benefiting from strong electric vehicle sales in China.

Re-opening in China would have significant repercussions for the steel market, and by extension for nickel. “Stainless steel production still accounts for 70% of nickel consumption, so China reopening would have a big effect,” Mikanikrezai said.

Copper was also affected by the rumors. “[The price of] copper rose strongly because Chinese authorities are rumored to be discussing easing the zero-Covid policy,” Fastmarkets analyst Andy Farida said.

“Traders had built short positions in LME copper,” Mikanikrezai said, “and it seems that the rumors out of China forced them to cover their bearish positions, which resulted in a big gain for copper prices [on Tuesday].”

The post Possible change in China’s zero-Covid policy drives base metals prices up; nickel up 8.2% appeared first on Fastmarkets.