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China's environmental crackdown hits August metals output

Date Sep 14 2017 17:03:47 Source:Thomson Reuters

BEIJING, Sept 14 (Reuters) - China's non-ferrous metal output fell to a one-year low in August, in a sign that Beijing's environmental crackdown is curbing supplies of base metals, with aluminium also hit by efforts to rein in output.

    Production of 10 nonferrous metals - including copper, aluminium, lead, zinc and nickel - fell 2.2 percent to 4.42 million tonnes, official data showed on Thursday, the lowest in a year and the first year-on-year drop since December 2015.

    "I think it is definitely related to the crackdown on production that will pollute the environment," said Helen Lau,  an analyst at Argonaut Securities in Hong Kong.

    The impact of China's environmental protection campaign was also evident in weak industrial production growth, she said.

    China has launched an aggressive campaign to curb choking smog in its northern regions, promising to close more factories and enforce bigger emission cuts in coming months, along with random spot checks to ensure targets are met.

    Smelters of copper and other nonferrous metals have faced closures because of the crackdown. Lead has been particularly hard hit, with 80 percent of illegal secondary smelters shut down since the second half of last year, according to research group Antaike. 

    China's primary aluminium production fell for a second successive month in August to its lowest level since April 2016, as the government's effort to curb excess smelting capacity starts to bring results.    

    Aluminium output fell 3.7 percent year on year to 2.64 million tonnes last month, and was down nearly two percent on July, the data from China's National Bureau of Statistics showed. The government will release a breakdown of the other individual metals later this month.

    August was the first month after Shandong-based smelters China Hongqiao, the world's top aluminium producer, and Xinfa Group were forced to shut a combined 3.2 million tonnes per year of illegal capacity.

    More cuts could follow, said Jackie Wang, an aluminium consultant at CRU in Beijing.

    "We do think aluminium production will go slightly down going forward," she said. "Because of the supply-side reform cuts and upcoming winter cuts, we expect to see a bit of a deficit in Q4 in China."

    In the first eight months of the year, China produced 22.17 million tonnes of aluminium, up 6.1 percent from the same period last year.

    January-August nonferrous production was up 4.9 percent at 36.4 million tonnes. The other non-ferrous metals are tin, antimony, mercury, magnesium and titanium.  

Edited by SHMET

METALS-China lead futures gain on signs of supply pinch

Date Sep 14 2017 17:03:23 Source:Thomson Reuters

SYDNEY, Sept 14 (Reuters) - Chinese lead futures advanced on Thursday, rising in step with growing signs of supply constraints caused by Beijing's crackdown on industrial pollution and falling stockpiles.

    However, copper and nickel futures were under pressure from concerns excess that supplies are mounting.

    Hefty supply of both metals was outweighing expectations that a flurry of data over the next few weeks will underscore a strong second-half economic outlook for China.    

    

    FUNDAMENTALS

    * SHFE LEAD: The most-traded lead contract on the Shanghai Futures Exchange  SPBcv1  rose more than 2 percent shortly after the open to 19,905 yuan ($3,043.58) a tonne, the highest price in more than three weeks. The contract rose 3 percent on Wednesday, leading gainers on the ShFE. It has risen more than 25 percent since the lowest close of 2017 on May 19. 

    * DEMAND: Lead demand in China, the world's largest user, comes chiefly from battery makers for cars and other vehicles. However, lead output has declined because of environmental probes that have shut down smelters operating illegally.

    * LEAD STOCKS DOWN: Lead stockpiles in China published by the Shanghai Futures Exchange (ShFE) were 29,850 tonnes on Sept. 8 and have plunged more than 64 percent from a three-year high of 83,622 tonnes on May 19.

    * LME LEAD: Three-month lead on the London Metal Exchange  CMPB  showed a modest 0.8 percent rise to $2,308 a tonne by 0140 GMT, reversing losses from the previous session.

    * SHFE COPPER:  SCFcv1  lost 1.2 percent, while LME three-month copper  CMCU3  was up a modest 1.5 percent to $6,563.50 a tonne, just short of neutralising overnight losses.

    * STOCKS: Copper stocks in LME approved warehouses are up 38,150 tonnes to 246,575 tonnes since last week.

    * NICKEL: ShFE nickel  SNIcv1  lost 2 percent. Three-month LME nickel  CMNI3  was up nearly 1 percent to $11,440 a tonne after dropping 5.2 percent overnight on talk of higher supplies from Indonesia, a top exporter to China.

    * CHINA DATA: After surprising pretty much everyone with solid growth in the first half, China's economy has continued to motor along nicely with a flurry of data for August expected to show momentum will largely hold up through to the end of the year despite tighter policy.

 

    MARKETS NEWS    

    * Asian stocks edged down on Thursday, consolidating after touching their highest in a decade, while the dollar held steady before the U.S. inflation report for August is published. 

Edited by SHMET

China's Zhongwang buys German aluminium extruder ALUnna

Date Sep 14 2017 17:02:34 Source:Thomson Reuters

BEIJING, Sept 13 (Reuters) - China Zhongwang Holdings Ltd  1333.HK  said on Wednesday it had acquired a controlling stake in a German aluminium extrusion firm that mainly supplies aircraft manufacturers.

    Zhongwang, the world's second-largest aluminium extruder, would hold a 99.72 percent equity interest in Aluminiumwerk Unna AG (ALUnna) via its wholly owned German subsidiary, Zhongwang Aluminium Deutschland GmbH, ALUnna said in a statement.

    Zhongwang and ALUnna did not put a value on the deal.

    The target firm, based in Unna, near Dortmund, "provides high-end extrusion products, mainly seamless tubes, to world-leading aircraft manufacturers," Zhongwang said, saying the purchase was its "first international acquisition to strengthen its foothold in the international aviation sector."

    Another Zhongwang company, Zhongwang USA, is seeking to close its acquisition of U.S. aluminium firm Aleris Corp ALSD.PK  after opposition from U.S. senators.

    Zhongwang USA is owned by Zhongwang Chairman Liu Zhongtian but is not part of the listed company. 

    The deadline for the Aleris transaction to close is Sept. 15, a Zhongwang spokeswoman said.

    Zhongwang's shares closed down 2.19 percent on HK$4.02 ($0.5146) on Wednesday.   Edited by SHMET

Zimplats FY profit rises despite lower platinum output

Date Sep 14 2017 16:59:08 Source:Thomson Reuters

HARARE, Sept 13 (Reuters) - Zimbabwe's Zimplats, which is majority controlled by Impala Platinum  IMPJ.J , posted a sharp increase in full-year profit as higher platinum prices and recouped Treasury bills offset lower production, the company said on Wednesday.

    Zimplats reported profit before tax of $101 million in 2017, up from $29.3 million in 2016. Platinum output slid to 281,080 ounces from 290,410 ounces last year, the company said.

Edited by SHMET

Gold little changed amid firmer equities, weaker dollar

Date Sep 13 2017 18:17:01 Source:Thomson Reuters

Sept 13 (Reuters) - Gold held steady on Wednesday amid firmer equities and a softer dollar, with safe-haven demand for the metal supported after U.S. President Donald Trump urged tougher measures against North Korea.

    Spot gold  XAU=  was unchanged at $1,331.47 an ounce by 0719 GMT.

    U.S. gold futures  GCcv1  for December delivery were up 0.2 percent at $1,335.70 an ounce.

    Asian stocks were slightly lower after earlier marking a near 10-year top, following record highs on Wall Street.

    "You look at the Asian equity markets, it's looking for a new high. That tells you something. People want to take risk," said Dominic Schnider at UBS Wealth Management in Hong Kong. 

    "I think that clearly plays into the story that the underlying macro story is solid and this risk overlay starts to disappear and markets refocus on what's driving long term returns."

    U.S. President Donald Trump said on Tuesday that U.N. sanctions on North Korea agreed this week were a small step and nothing compared to what would have to happen to deal with the country's nuclear programme. 

    "It seems to me that these concerns are starting to fade. Some people expect a little harsher sanctions so it's an indication that military confrontation, against these risks, are subsiding to some degree," Schnider said.

    Gold is used as an alternative investment during times of political and financial uncertainty.      

    "Futures are up mainly just on safe-haven buying. People probably see this as a fairly cheap level to purchase gold as a hedge against any future issues coming out of the Korean peninsula," a Sydney-based trader said. 

    Meanwhile, the dollar index  .DXY , which measures the greenback against a basket of currencies, slipped 0.1 percent to 91.758, but managed to remain above its 2-1/2-year low hit last week.  USD/  

    "We think the dollar has weakened beyond what it needs to at least in the short-term and we still look for one rate hike in December," UBS's Schnider said.

    A stronger greenback makes bullion more expensive for holders of other currencies, while higher interest rates lead to higher bond yields and dampen demand for non-yielding gold.

    Spot gold looks neutral in a range of $1,321-$1,335 per ounce, said Reuters technical analyst Wang Tao.

    "We are neutral on gold here and would like to wait for some of the churn in the currency markets before advocating a more explicit position," INTL FCStone analyst Edward Meir said in a note.

    Holdings of SPDR Gold Trust  GLD , the world's largest gold-backed exchange-traded fund, rose 0.35 percent to 838.64 tonnes on Tuesday. GOL/ETF 

    Among other precious metals, silver  XAG=  was down 0.2 percent at $17.87 an ounce, while platinum  XPT=  and palladium  XPD=  were both 0.1 percent lower at $985.50 and $953.50 an ounce. 

Edited by SHMET
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