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India Equity Research Reports, IPO and Stock News
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Copper raw materials – scrap supply
still ample in China, spot TCs still high
Feature articles
ƒ We review the latest copper scrap and concentrate prices and report the final
benchmark settlement for 2011 annual contract TC/RCs. Overall the data
point to ample availability of material at present. Looking ahead, we expect
scrap discounts to narrow, TC/RCs to fall and seasonally low smelter demand
to recover over the next 3-6 months, tightening the copper market. However in
the very short term positive catalysts are hard to find for copper.
Latest news
ƒ Base metals prices were largely unchanged across the complex on Tuesday.
Silver rose 1.9% to $30.72/oz, palladium was up to $845/oz, and molybdenum
continued its recent strength by 2.8% to $18.14/lb.
ƒ According to preliminary customs data, Chinese steel exports rose 12% MoM
in January to 3.1mt. The large price arbitrage between Chinese and RoW
prices has created a strong incentive for Chinese mills to sell overseas and
traders report a huge rise in export orders over January and February that will
play through to large export volumes in March and April. The strength of
export ordering has tightened up the Chinese flat product market meaning
that while rebar inventory at traders has returned to April 2010 levels, HRC
inventory has only risen moderately since the beginning of the year. Baosteel
and Wuhan both announced today that they will raise March list prices for
HRC and CRC by Rmb260-300/t.
ƒ BHP Billiton has reportedly reduced Mn ore prices for March shipment by
50¢/dmtu, setting medium grade lump set at $6/dmtu CIF China, with local
ports reportedly holding high stocks and enquiries lacking from buyers in
India, following at least three months of steady prices. However, China's
crude steel production has been rising strongly in recent weeks and we would
expect Mn ore prices to move up once more as excess stocks are cleared.
ƒ Aurubis reported on Tuesday that European demand for wire rod has
significantly increased over the past month and growth is set to continue “in
the coming weeks”. In particular, the demand for continuous cast shapes
benefits from the improved economic climate. Meanwhile, Wieland-Werke,
one of the main producers of semi-finished copper products in Europe, is also
currently reporting that demand is good.
ƒ Preliminary shipping data for last week reinforces that Queensland coal
shipments are continuing to recover, recording the highest total in 2011.
Shipments were just 18% below the pre-disruption average level in H2 2010,
with Dalrymple Bay back above normal levels and Hay Point exports
recovering strongly.
ƒ There have been numerous reports of Chinese selling in the uranium spot
market at $72-73/lb, fitting in with the notion that China (on average) tends to
buy low and sell high. We do believe that there have been some offers from
Chinese sellers, however this is for material bought by China and held in the
West (as opposed to China re-exporting stocks it has recently built). The total
amount of stocks ex-China is not believed to be high but it is difficult to verify.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Copper raw materials – scrap supply
still ample in China, spot TCs still high
Feature articles
ƒ We review the latest copper scrap and concentrate prices and report the final
benchmark settlement for 2011 annual contract TC/RCs. Overall the data
point to ample availability of material at present. Looking ahead, we expect
scrap discounts to narrow, TC/RCs to fall and seasonally low smelter demand
to recover over the next 3-6 months, tightening the copper market. However in
the very short term positive catalysts are hard to find for copper.
Latest news
ƒ Base metals prices were largely unchanged across the complex on Tuesday.
Silver rose 1.9% to $30.72/oz, palladium was up to $845/oz, and molybdenum
continued its recent strength by 2.8% to $18.14/lb.
ƒ According to preliminary customs data, Chinese steel exports rose 12% MoM
in January to 3.1mt. The large price arbitrage between Chinese and RoW
prices has created a strong incentive for Chinese mills to sell overseas and
traders report a huge rise in export orders over January and February that will
play through to large export volumes in March and April. The strength of
export ordering has tightened up the Chinese flat product market meaning
that while rebar inventory at traders has returned to April 2010 levels, HRC
inventory has only risen moderately since the beginning of the year. Baosteel
and Wuhan both announced today that they will raise March list prices for
HRC and CRC by Rmb260-300/t.
ƒ BHP Billiton has reportedly reduced Mn ore prices for March shipment by
50¢/dmtu, setting medium grade lump set at $6/dmtu CIF China, with local
ports reportedly holding high stocks and enquiries lacking from buyers in
India, following at least three months of steady prices. However, China's
crude steel production has been rising strongly in recent weeks and we would
expect Mn ore prices to move up once more as excess stocks are cleared.
ƒ Aurubis reported on Tuesday that European demand for wire rod has
significantly increased over the past month and growth is set to continue “in
the coming weeks”. In particular, the demand for continuous cast shapes
benefits from the improved economic climate. Meanwhile, Wieland-Werke,
one of the main producers of semi-finished copper products in Europe, is also
currently reporting that demand is good.
ƒ Preliminary shipping data for last week reinforces that Queensland coal
shipments are continuing to recover, recording the highest total in 2011.
Shipments were just 18% below the pre-disruption average level in H2 2010,
with Dalrymple Bay back above normal levels and Hay Point exports
recovering strongly.
ƒ There have been numerous reports of Chinese selling in the uranium spot
market at $72-73/lb, fitting in with the notion that China (on average) tends to
buy low and sell high. We do believe that there have been some offers from
Chinese sellers, however this is for material bought by China and held in the
West (as opposed to China re-exporting stocks it has recently built). The total
amount of stocks ex-China is not believed to be high but it is difficult to verify.
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