Mining

Weekly Report: A Glance at the Price of Different Minerals

Weekly Report: A Glance at the Price of Different Minerals
Mining News Pro - They ended 4.1% lower at 779 yuan a tonne, extending losses to the third day.
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According to Mining News Pro - On weekly reports we are trying to put an scoop on the metal market and find out what is happening in the global market.

Iron ore price at near 4-month low on interest rate, demand concerns

The iron ore price dropped nearly 7% on Tuesday, fuelled by concerns about higher interest rates and still-stagnant demand from China.

The US Federal Reserve approved a half-a-point interest rate hike last week, and said it could stick to that for the next two to three meetings and then assess how the economy and inflation are responding before deciding whether further rises are needed.

“That has led to a significant decline in commodities prices denominated in US dollars such as iron ore,” GF Futures analysts wrote in a note.

Meanwhile, thin profit margins at steel producers and overall steel output controls in China have curbed production increases and dented demand for steelmaking ingredients, GF Futures said.

The most-active iron ore futures on China’s Dalian Commodity Exchange, for September delivery, plunged as much as 7% to 756 yuan ($112.71) per tonne, the lowest since March 16.

They ended 4.1% lower at 779 yuan a tonne, extending losses to the third day.

Benchmark 62% Fe fines imported into Northern China fell 6.18%, to $129.92 per tonne, the lowest since January 18.

China’s central bank said on Monday it would step up support for the slowing economy, while closely watching domestic inflation and monitoring policy adjustments by developed economies.

Nickel price back to where it started before March chaos

Nickel futures finally tumbled back below the level where the London Metal Exchange market closed March 4, the last trading day before prices exploded upwards in an unprecedented short squeeze.

It’s not the first time — prices dipped under $28,919 a ton for a couple of days in late March. But the level is a key one because Tsingshan Holding Group Co., the company at the center of the crisis, had paid its margin calls up until March 4. Further margin payments above those levels have been waived under a standstill agreement with its banks, with Tsingshan pledging to reduce its short positions once “abnormal” market conditions subside.

Nickel spiked by 250% in a little over 24 hours on March 7 and 8 before the LME stepped in to suspend the market and canceled billions of dollars of transactions at the highest prices. Nickel spent weeks in limbo after it reopened, first locked for days at the new trading limits introduced by the exchange, and then drifting in extremely thin volumes.

Activity has begun to pick up as prices dropped in a wider retreat across industrial metals. Nickel volumes on the LME on Friday were the highest since March 22, which was when prices last dropped below $29,000 and around the time that Tsingshan covered about 20% of its short position, Bloomberg previously reported.

Nickel slumped as much as 6.8% to $28,025 a tonne on Monday.

Gold price extends decline as dollar rallies to 20-year high

Gold prices extended losses on Monday as the dollar rallied to two-decade highs while US Treasury yields also advanced, curbing investors’ enthusiasm for the safe haven metal.

Coming off a run of three straight weekly losses, spot gold declined another 1.0% to $1,863.96 per ounce by 12:25 p.m. ET Monday. US gold futures, too, dropped 1.0% in New York, trading at $1,862.60 per ounce.

Bullion has been sliding since mid-April as the Federal Reserve and other central banks tighten policy to fight rising consumer prices. The monetary squeeze has sent yields on US government bonds past 3% and fueled five weeks of gains for the dollar, making non-interest-bearing gold less attractive.

Still, there could be more bond market swings to come as a swathe of inflation data feeds the debate on price pressures and monetary policy. US consumer prices are set to be released on Wednesday, with China, India, Mexico and Brazil also reporting during the week.

Investors also digested trade data from China Monday that showed the damage caused by covid-19 lockdowns in the world’s second-biggest economy. The nation’s exports and imports struggled in April as worsening virus outbreaks cut demand, undermined production and disrupted logistics.

“Persistent strength in the US dollar and higher bond yields amid expectations that the Fed may continue with aggressive rate hikes to get inflation under control is weighing on gold,” Ravindra Rao, the head of commodity research at Kotak Securities Ltd., wrote in a Bloomberg note.

The downside is limited on increasing concerns relating to China, inflationary worries and tensions over Russia’s invasion of Ukraine, he said.

Investors are beginning to cut back their exposure to gold after a long period of expansion, with exchange-traded fund holdings falling for a second straight week. Hedge funds trading on the Comex also cut their net bullish bets to a three-month low as of last Tuesday, Bloomberg data shows.


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