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Glencore’s role in metal markets
Feature article
We review recently published data on Glencore’s market shares in the main
metals and mining commodities. While it makes interesting reading, it would
be unwise to draw conclusions about market-share dominance and superior
price performance.
Latest news
It was a relatively flat day for most of the metals, with the most notable feature
the temporary rise in gold to above $1,500/oz for the first time. Copper
received a boost from a downward revision to Japanese copper smelter
output plans for the April-September period (in part due to the Tsunami).
The Euro area flash manufacturing PMI rose slightly in April, to 57.7 from 57.5
in March. Germany (61.7 from 60.9) and France (56.9 from 55.4) showed
solid gains, suggesting manufacturing in the core of Europe remains very
strong. The flash estimate for the HSBC China PMI was also released, with
April remaining at the same level as March, at 51.8, although the March flash
estimate proved to be higher than the final result.
Chinese coal imports in March were 9.05mt, according to the China Coal
Times. While we have yet to receive the full detail of the data, coking coal
imports were reportedly 2.93mt, which is an improvement on February's
imports of 1.98mt, although part of the improvement is likely to be driven by
imports from Mongolia. Steam coal imports also appear to have remained
weak at ~6mt, down approx 46%YoY. It seems likely that steam coal imports
will improve into mid-2011 given renewed interest in Indonesian coal over the
past few weeks.
The Zimbabwe government has reinstated a ban on chrome ore exports with
effect from April 20. While the direct impact of this is small, there are calls for
restrictions of chrome ore exports in South Africa, which would have a much
larger impact on the market. We believe such intervention is unlikely while
Eskom lacks the generating capacity to increase alloy output in the country.
First Quantum reported an improvement at its Kansanshi copper mine, rising
21% YoY to 64.8kt in 1Q11 and a 20% increase in production at Guelb
Moghrein to 10.1kt. These gains put these mines on track to meet our
estimates of 220kt of copper in concentrate in 2011.
Latest Chinese (NBS) data for the first quarter of 2011 underscores the
ongoing strength in many sectors of steel and metals demand. Auto
production rose 10.3% YoY in the Jan-Mar period, while production of air
conditioners (a big user of copper) rose 48.4% YoY, of washing machines
12.2% YoY, fridges 20.9% YoY and civil ships 13.6% YoY Electric power
generation rose 13.4% YoY, with thermal generation rising 10.6% YoY and
hydro generation a substantial 32,6% YoY.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Glencore’s role in metal markets
Feature article
We review recently published data on Glencore’s market shares in the main
metals and mining commodities. While it makes interesting reading, it would
be unwise to draw conclusions about market-share dominance and superior
price performance.
Latest news
It was a relatively flat day for most of the metals, with the most notable feature
the temporary rise in gold to above $1,500/oz for the first time. Copper
received a boost from a downward revision to Japanese copper smelter
output plans for the April-September period (in part due to the Tsunami).
The Euro area flash manufacturing PMI rose slightly in April, to 57.7 from 57.5
in March. Germany (61.7 from 60.9) and France (56.9 from 55.4) showed
solid gains, suggesting manufacturing in the core of Europe remains very
strong. The flash estimate for the HSBC China PMI was also released, with
April remaining at the same level as March, at 51.8, although the March flash
estimate proved to be higher than the final result.
Chinese coal imports in March were 9.05mt, according to the China Coal
Times. While we have yet to receive the full detail of the data, coking coal
imports were reportedly 2.93mt, which is an improvement on February's
imports of 1.98mt, although part of the improvement is likely to be driven by
imports from Mongolia. Steam coal imports also appear to have remained
weak at ~6mt, down approx 46%YoY. It seems likely that steam coal imports
will improve into mid-2011 given renewed interest in Indonesian coal over the
past few weeks.
The Zimbabwe government has reinstated a ban on chrome ore exports with
effect from April 20. While the direct impact of this is small, there are calls for
restrictions of chrome ore exports in South Africa, which would have a much
larger impact on the market. We believe such intervention is unlikely while
Eskom lacks the generating capacity to increase alloy output in the country.
First Quantum reported an improvement at its Kansanshi copper mine, rising
21% YoY to 64.8kt in 1Q11 and a 20% increase in production at Guelb
Moghrein to 10.1kt. These gains put these mines on track to meet our
estimates of 220kt of copper in concentrate in 2011.
Latest Chinese (NBS) data for the first quarter of 2011 underscores the
ongoing strength in many sectors of steel and metals demand. Auto
production rose 10.3% YoY in the Jan-Mar period, while production of air
conditioners (a big user of copper) rose 48.4% YoY, of washing machines
12.2% YoY, fridges 20.9% YoY and civil ships 13.6% YoY Electric power
generation rose 13.4% YoY, with thermal generation rising 10.6% YoY and
hydro generation a substantial 32,6% YoY.
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