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 rises despite flat demand from steelmakers
The iron ore price rose on Tuesday despite traders fretting about high prices squeezing steel mill margins after Chinese demand for the steelmaking ingredient spurred an earlier rally.
Benchmark 62% Fe fines imported into Northern China rose 1.2% Tuesday morning, to $146.30 per tonne.
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The most-traded September iron ore contract on China’s Dalian Commodity Exchange ended daytime trading 0.6% lower at 928.50 yuan ($139.32) a tonne, after hitting a 10-week high on Monday.
Top steel producer China’s moves to ease covid-19 restrictions added fuel to the rally, as did shrinking stockpiles of imported iron ore at Chinese ports.
“The short-term iron ore demand has increased more than expected, but the profits of downstream steel mills are weak,” Sinosteel Futures analysts said in a note.
“Seaborne iron ore prices were fairly stable amid unchanged futures and swap prices due to stable demand from steelmakers,” wrote Fastmarkets.
China’s crude steel production fell in 2021 for the first time in six years after record output in 2020 as the country stepped up efforts to contain emissions in its mammoth ferrous sector. It is aiming for even lower output this year.
Gold price rises on dollar slump
Gold prices rose over 1% on Thursday, coinciding with a dip in the US dollar and discouraging private payroll data for the month of May.
Spot gold was up 1.3% to $1,869.67 per ounce by 12:20 p.m. ET, its highest in nearly a month. US gold futures also gained 1.3%, trading at $1,873.30 per ounce in New York.
Meanwhile, the US dollar index fell by 0.5%, slipping off a one-week high reached during Wednesday’s session.
The latest data from payroll processing firm ADP showed that job creation at companies decelerated to the slowest pace of the pandemic-era recovery in May.
Private sector employment rose by 128,000 for the month, falling well short of the 299,000 Dow Jones estimate, and a decline from the downwardly revised 202,000 in April.
“(The job data) is really raising the recession concerns that have been brewing in the market and supporting gold,” Ryan McKay, commodity strategist at TD Securities, told Reuters.
“A portion of the investors and traders are starting to question whether the Federal Reserve will really be willing to be as hawkish as has been anticipated,” he added.
Fed Vice Chair Lael Brainard on Thursday said she is backing at least a couple more half-point interest rate hikes, with more on tap if price pressures fail to cool.
Investors will now keep a close eye out on Friday’s nonfarm payrolls data, which is expected to show strong job growth continued in May.
Copper price scales $10,000 on Chinese stimulus, lockdown reprieve
The copper price jumped on Thursday as China’s zero-covid strategy appears to be winding down.
Officials in Shanghai announced an end to a two-month lockdown on Monday. China’s cabinet on Tuesday announced a package of 33 measures covering fiscal, financial, investment and industrial policies to revive its pandemic-ravaged economy.
The development could boost downstream consumption, which was halted for months due to the recent covid-19 outbreak.
Copper for delivery in July rose more than 5% from Wednesday’s settlement, touching $4.5575 per pound ($10,050 per tonne) lunchtime Thursday on the Comex market in New York.
On the supply side, Chile’s copper production fell in April, government body Cochilco said on Thursday, with state-owned giant Codelco seeing output down 6.1% year-on-year to 116,000 tonnes and Collahuasi’s production dropping by a sharp 26.5%.
Chile’s environmental regulator initiated a sanction process against Antofagasta Minerals’ Los Pelambres copper mine for deficiencies associated with tailings management, the agency said in a statement released on Wednesday.
The company said it is reviewing the scope of the sanctioning process to determine its next steps.
Serious infractions could mean a loss of the mine’s environmental permit, closure, or a fine. Minor infractions can result in a written warning or a fine. In this case, the maximum fine could reach 7.5 billion Chilean pesos ($9 million). The mine produced 324,700 tonnes of copper last year.
Meanwhile, the world’s No. 2 copper producer Peru is suffering increasingly violent community protests against mines, as communities demand higher benefits from the industry.
Two fires broke out at key copper projects this week, hitting MMG Ltd’s Las Bambas copper mine and Southern Copper Corp’s planned Los Chancas project, amid escalating local protests.