Metals & Mining Monitor | Commodity Markets Remain on a Downward Trend; Freeport Indonesia Raises Copper Output Target

Moomoo News AU wrote a column · Jun 11 16:23

Metals & Mining Monitor | Commodity Markets Remain on a Downward Trend; Freeport Indonesia Raises Copper Output Target

Hello mooers! Check out the latest market dynamics of the metals and mining industry over the past week.
•Base metals: Copper price drops to five-week low due to strong dollar
•Energy metals: Nickel price falls by 7.7% on a weekly basis
•Precious metals: Gold price sinks to 1-month low
•Bulk commodity: Iron ore price hits seven-week low

Spot Price Snapshot

Key Price Moves

$Copper Futures(MAR5) (HGmain.US)$ prices in London hit the lowest in five weeks on Friday, under pressure from a stronger dollar, stronger-than-expected US employment data and mixed trade numbers from top metals consumer China. Concerns over rising inventories in China were heightened as unwrought copper imports last month exceeded expectations. ING commodities analyst Ewa Manthey noted,

Copper prices are due a downward correction, unless the Chinese government unveils sustained stimulus measures, or we see Chinese smelters cutting output.

As of Monday, LME spot copper prices had fallen to $9695 per tonne, down 2.9% on a weekly basis.

On Friday, $Gold Futures(FEB5) (GCmain.US)$ experienced a significant drop of 3.7%, marking its largest decline since August 2021. Silver also fell by 7%. The drop in gold prices led to it falling below $2,300 an ounce, which was attributed to a strong US jobs report that reduced hopes for imminent Federal Reserve rate cuts, causing Treasury yields and the dollar to surge. Furthermore, official data released on Friday showed that China's central bank paused gold purchases to its reserves in May, when spot gold prices hit a record high. This pause came after 18 months of consecutive purchases.

Nickel prices have fallen for three consecutive weeks. China's refined nickel production continues to grow, maintaining a high level of supply. Meanwhile, stainless steel mills have pointed out that with the recent decline in raw material prices, downstream demand for orders has decreased, especially for domestic sales, where some customers have already stocked up due to previous price increases. As a result, the market's acceptance of high-cost nickel is limited. At the same time, Indonesia's Tsingshan has reportedly lowered its export prices, leading to a cautious outlook in the market. As of Monday, Nickel prices have fallen 7.7% week-on-week to $17,835 per ton.

Iron ore prices fell to a seven-week low last Wednesday, with spot prices reaching $106.35 per tonne. This decline was attributed to weakening steel demand and anticipated increases in shipments to China, the top consumer, in June. As of last Friday, spot prices had dropped 5.3% to $109.1 per tonne.

Top Company News

Freeport Indonesia Increases Copper Output Target, Awaits Export Permit Extension

$Freeport-McMoRan (FCX.US)$ Indonesia, a copper miner operated by U.S. miner Freeport-McMoran and majority-owned by the Indonesian government, has increased its copper concentrate output target for the year. The company raised its target to 3.78 million metric tons from the initial 2.84 million tons, assuming the export permit extension is approved by the government. The deputy CEO, Jenpino Ngabdi, also stated that the company has raised its refined copper output target for 2024 to 1.73 billion pounds from 1.42 billion pounds previously.

Tianqi Lithium Corp. Issues Warning to Protect Its Interests in Chile's SQM-Codelco Lithium Deal

Chinese firm, $Tianqi Lithium Corporation (002466.SZ)$, has issued a warning to safeguard its interests in the recently established partnership between $Sociedad Quimica Y Minera De Chile (SQM.US)$ and Codelco, which aims to share ownership of one of the world's largest lithium operations. The company, which owns a 22% stake in SQM, filed a statement on Monday reminding the market of its pending request with Chilean securities regulators to rule on whether the partnership requires a shareholder vote.

BHP Group Requests Mediation for Labor Negotiations at Chilean Mine

$BHP Group Ltd (BHP.AU)$ has released a statement indicating its request for mediation in labor negotiations at the Spence copper mine in Chile. Despite previous discussions between the company and union leaders, they have failed to reach an agreement. The parties have five business days to negotiate and reach a deal. It is important to note that the mine and plants remain unaffected by the ongoing talks.

Rio Tinto Boosts Majority Stake in Australian Aluminum Smelter Joint Venture

$Rio Tinto Ltd (RIO.AU)$ has announced its intention to acquire an additional 11.65% interest in Boyne Smelters, which owns and operates an aluminum smelter in Gladstone, Australia. The stake is currently owned by $Mitsubishi (8058.JP)$. The acquisition will increase Rio Tinto's majority stake in the project to 73.5%. The deal is expected to be finalized in the second half of this year. Boyne Smelters has the capacity to produce over 500,000 metric tons of aluminum annually, as per Rio Tinto's website.