Mining

Weekly Report: A Glance at the Price of Different Minerals

Weekly Report: A Glance at the Price of Different Minerals
Mining News Pro - The US Federal Reserve announced its largest rate increase since 1994 this week, while the Swiss National Bank raised its policy rate for the first time in 15 years. The Bank of England also followed suit.
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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.

Gold price heads for weekly decline following central bank rate hikes

Gold was back in the red on Friday, on course to finish lower for the week, as a firming dollar and interest rate hikes from major central banks dented the safe-haven metal’s appeal.

Spot gold fell 0.7% to $1,844.63 per ounce by 11:45 a.m. ET, while US gold futures dipped 0.2% to $1,846.40 per ounce in New York.

Gold is giving up some gains after Thursday’s big move due to the 1.2% rise in the dollar, said RJO Futures senior market strategist Bob Haberkorn in a Reuters report.

But it remains “stuck in the middle of a tug of war between inflation and interest rates,” Haberkorn added.

The US Federal Reserve announced its largest rate increase since 1994 this week, while the Swiss National Bank raised its policy rate for the first time in 15 years. The Bank of England also followed suit.

“While firmer inflation on its face is bullish for (precious metal) prices, it is now being quickly counteracted by more aggressive pricing for a policy response from the Fed and other central banks, likely keeping prices constrained,” JP Morgan said in a note.

Still, gold’s safe-haven lure is supported by rising risks of stagflation, decades-high inflation and the turmoil in risky assets, according to Saxo Bank analyst Ole Hansen. “That is why gold has not fallen at the pace dictated by rising real yields,” he said.

Copper price extends decline despite possible Chile strike

The copper price extended its decline on Friday despite the prospect of a strike in the world’s biggest producer Chile and signs of improvement in top buyer China’s economy.

Copper for delivery in July fell 2.5% from Thursday’s settlement, touching $4 per pound ($8,800 per tonne) Friday morning on the Comex market in New York.

The union said that workers at Chilean State-owned Codelco, the world’s largest copper producer, will go on strike if they do not receive a favourable answer from the company’s board of directors.

The union has insisted that Ventanas, in the central zone of the country where the smelter is located, needs $53 million worth of capsules to retain certain gases, allowing operations to continue while being environmentally compliant.

Meanwhile, data showed that Shanghai’s economy contracted for a second month in May at a somewhat slower pace, weighing on the commercial hub’s recovery prospects following a two-month covid lockdown.

“Industrial metals are really not sure what direction to take on China. One day there’s a headline saying everything’s opening up. The next day there’s a partial close-down again,” said Caroline Bain, chief commodities economist at Capital Economics in London.

Iron ore price hits six-month low on plunging China steel margins

Iron ore extended losses to a sixth session on Friday, marking its steepest weekly slump in six months, as Chinese steel mills opted to reduce output amid weak profits and deteriorating demand prospects.

Benchmark 62% Fe fines imported into Northern China fell 5.76%, to $121.64 per tonne, the lowest since December 17.

The most-traded iron ore contract, for September delivery, on China’s Dalian Commodity Exchange ended daytime trade 5.9% lower at 821.50 yuan ($122.64) a tonne, after earlier tumbling to 815.50 yuan, the lowest since May 26.

Mining stocks also slid, with Vale down almost 8% from the previous week, Rio Tinto down 7% and Fortescue down 12%.

“In recent weeks, an increasing number of mills in (China’s) steelmaking hub of Tangshan are opting to undertake maintenance and cut output amid weak margins,” said ANZ senior commodity strategist Daniel Hynes.

Some regions have also begun to actively curb production, analysts at Sinosteel Futures said.

The rainy season in many parts of China that usually disrupts construction activity and restrictions put in place to contain covid-19 outbreaks have hit demand in the world’s top steel producer, squeezing mills’ margins.

Reflecting such sluggish demand, China’s steel inventory has risen this week by 316,700 tonnes to about 22.2 million tonnes, according to Sinosteel analysts.


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