Metals & Mining Monitor | Gold Prices Rebound to $2330/t; Vale's CEO Notes China's Shift in Steel Demand from Real Estate to Manufacturing

Moomoo News AU wrote a column · Jun 17 06:45

Metals & Mining Monitor | Gold Prices Rebound to $2330/t; Vale's CEO Notes China's Shift in Steel Demand from Real Estate to Manufacturing

Hello mooers! Check out the latest market dynamics of the metals and mining industry over the past week.
•Base metals: Prices generally decline
•Energy metals: Lithium carbonate price continue to fall
•Precious metals: Gold price rebounds to $2330/t
•Bulk commodity: Iron ore price drops for third week

Spot Price Snapshot

Key Price Moves

Declining Chinese demand is causing a drop in prices for industrial metals. LME copper fell 1.9% to $9650/t, while aluminum dropped 4.4% to $2466/t, lead fell 3.2% to $2109/t, and zinc declined 3.6% to $2732/t over the past week.

Reports that Chinese fabricator demand for copper has been muted are weighing on the red metal, particularly as inventories around the globe increase.

Despite this, Citi analysts remain optimistic about copper prices and predict a potential increase of 25% to $12000 within the next 6 to 18 months. The analysts estimate that copper prices could reach $12,000 sometime in 2025.

Since peaking above 125,000 RMB/ton in early March, lithium carbonate prices have continuously fluctuated downward and fell below 100,000 RMB/ton last week. As of last Friday, the spot price of lithium carbonate was 98,470 RMB/ton (approximately $13,840/ton), a 3.6% decrease compared to the previous period. The price drop is primarily due to bearish market fundamentals and a decline in futures prices.

On the supply and demand side, downstream customers in China have digested their previous raw material orders at the beginning of the month, and there is insufficient intent to replenish with new orders. In addition, downstream production has slightly decreased this month, resulting in weaker demand and ample lithium carbonate supply in China.

On Friday, $Gold Futures(DEC4) (GCmain.US)$ experienced a significant increase after the release of inflation data in the United States (US). This news raised investors' hopes for the Federal Reserve (Fed) to cut interest rates later this year. Moreover, due to Europe's political uncertainty, risk aversion prompted a flight to safety, further bolstering the value of the precious metal. As of last Friday, the spot price for gold was $2330 per ounce, representing a 0.9% increase compared to the previous week.

Iron ore price saw a third consecutive day of growth on Friday due to higher-than-anticipated hot metal production. However, despite this positive trend, concerns over demand and high portside stocks in China – the world's top consumer of iron ore – have continued to push prices down, marking the third week of decline.

According to data from consultancy firm Mysteel, the average daily hot metal output among surveyed steelmakers rose by 1.5% from the previous week to 2.39 million tons, the highest level since November 2023, surpassing expectations. As of last Friday, the spot price for iron ore was at $106.6 per ton, a decrease of 2.4% compared to the previous week.The price fell over 2% today as economic data from China highlighted persistent weak points. ANZ analyst Soni Kumari said,

The China government is trying to revive the property sector with some resources deployed, but I think there will be some more measures which need to be deployed in the market to support it and to provide the consumer confidence.

Top Company News

Vale CEO: Chinese Steel Demand Stalls Due to Property Woes, But Remains at a Decent Level

During an investment conference, $Vale SA (VALE.US)$ CEO Eduardo Bartolomeo stated that Chinese steel demand has plateaued due to property woes. However, Bartolomeo also mentioned that China's appetite for steel is still at a decent level. He believes that steel demand will remain stalled for a while because China relies heavily on real estate, but he expects a shift away from that industry towards manufacturing. According to Bartolomeo, "The plateau means they're going to shift from real estate to manufacturing. We see a shift from rebar, used for properties, to plates, used in manufacturing."

Serbia to Approve Rio Tinto's Stopped Jadar Lithium Project

Serbia is set to approve $Rio Tinto Ltd (RIO.AU)$'s Jadar lithium project, which the Anglo-Australian miner halted two years ago due to local protests over environmental concerns. Serbian President Aleksandar Vucic revealed that the government is preparing to permit the development of the mine, and Rio Tinto and Serbia could issue a formal announcement of the project next month following a meeting with European Union leaders. The mine is expected to open in 2028 and produce 58,000 metric tons of lithium a year, making it Europe's largest lithium mine, according toFinancial Times.

South32's Samancor Manganese to Sell Metalloys Smelter to South African Firm

Samancor Manganese, a subsidiary of $South32 Ltd (S32.AU)$, has signed a binding agreement to sell the Metalloys manganese alloy smelter in Gauteng to Khwelamet. Khwelamet is a joint venture between Menar and Ntiso Investing Holdings. The transaction is subject to various conditions, including competition and regulatory approvals, which are expected to happen in the second half of the 2025 financial year. Once the conditions have been met, Khwelamet will take over the assets and liabilities of Metalloys. The content within parentheses and quotes remains unchanged.

Evolution Mining Reports 26,000 Ton Reduction in Gold Production During May Quarter

$Evolution Mining Ltd (EVN.AU)$ has reported a significant reduction in gold production during the quarter ended May 2024 due to adverse weather conditions at its Cowal and Mt Rawdon operations in Australia, coupled with material handling issues resulting from seismic events at its Red Lake mine in Canada. As a result of these challenges, gold output is estimated to have decreased by 26,000 tons.