METALS-Nickel prices drop on worries China steel demand is losing its shine

Date Nov 17 2017 14:17:35 Source:Reuters

    SYDNEY, Nov 17 (Reuters) - Shanghai nickel prices fell on Friday on worries about growth in Chinese steel markets, with the sector heading into a low consumption period over winter.

    The base metal, used widely to help make stainless steel, was heading for a 7-percent weekly loss on the Shanghai Futures Exchange.



    * SHFE NICKEL: The most-traded ShFE nickel contract SNIcv1 had slipped 1.43 percent to 93,030 yuan ($14,044) a tonne by 0137 GMT. The contract closed 2.6 percent weaker the previous day.

    * OTHER SHFE METALS: The sell-off in nickel came amid across-the-board declines in Chinese metals futures. Active ShFE copper SCFcv1 dipped 0.09 percent, while zinc SZNcv1 was off 0.44 percent and aluminum SAFcv1 0.68 percent.

    * CHINA ECONOMY: China's economy cooled further last month, with industrial output, fixed-asset investment and retail sales missing expectations.

    * DOLLAR STEADY: The dollar steadied on Friday after coming off the week's lows against its peers as earlier risk aversion in global financial markets receded, pushing up U.S. yields.

    * FREEPORT FIRE: A fire has broken out at the main port used by copper miner Freeport-McMoRan Inc FCX.N in Papua, Indonesia, on Thursday night, company sources said. 

    * BHP Billiton BHP.AX, BLT.L hopes to fully divest its troubled U.S. onshore shale business in around two years and is also seeking a buyer for its nickel business in Australia.

    * VW: Volkswagen VOWG_p.DE is not looking to secure long-term supplies of cobalt, a key ingredient of electric-car batteries, by investing in mines, a senior official at the automaker said.


          MARKETS NEWS    

    * Asian shares rose on Friday as strong U.S. earnings and a step forward in the U.S. Congress on tax reform brightened the mood, even though investors noted that many more hurdles must be passed to reach a final deal on tax cuts.  MKTS/GLOB





Edited by SHMET

Cobalt hedging not mining the route for VW in EV drive, official says

Date Nov 17 2017 14:06:34 Source:Reuters
    BERLIN, Nov 16 (Reuters) - Volkswagen  VOWG_p.DE  is not looking to secure long-term supplies of cobalt, a key ingredient of electric-car batteries, by investing in mines, a senior official at the automaker said. 

    Demand for cobalt is expected to soar as carmakers rush to embrace electric vehicles (EVs) in response to governments around the world cracking down on pollution.

    Volkswagen (VW), which is struggling to draw a line under its 2015 emissions test-cheating scandal, plans to invest more than 20 billion euros ($23.6 billion) in battery-powered cars by 2030 to challenge Tesla  TSLA.O  in creating a mass market.

    Asked whether VW would be prepared to invest in mines to safeguard future supplies of battery metals, Gerhard Praetorius, head of sustainability at VW group, told Reuters: "As far as I can see, options are being examined but not in this direction."

    "Hedging by means of long-term (supplier) contracts is really the way to control such new issues (of securing materials supplies)," Praetorius said.

    Asked what VW does to ensure that its cobalt supplies do not come from child labour in the Democratic Republic of Congo, Praetorius said:

    "We are now in the midst of starting a process by which we can retrace very well" where the cobalt comes from. He gave no details.    

    Two months ago, Reuters reported that the world's largest automaker had asked producers to submit proposals on supplying cobalt for up to 10 years from 2019. 

    VW, which aims to make up to three million EVs a year by 2025, wanted all the cobalt tender proposals submitted by the end of September, the sources had said.

    Praetorius declined to comment on procurement issues.    

($1 = 0.8494 euros)


Edited by SHMET

Russia's TMK says strong U.S. demand to support Q4 earnings

Date Nov 17 2017 14:05:15 Source:Reuters
    MOSCOW, Nov 16 (Reuters) - Russian pipemaker TMK  TRMK.MM  said on Thursday strong demand in the United States and an improvement in the Russian market would support earnings in the last three months of the year after growth in the previous quarter.

    TMK, Russia's largest maker of steel pipes for the oil and gas industry, said it was still on track for stronger financial results in 2017 despite some pressure on margins from higher raw materials prices. Margins are, however, expected to expand in the first quarter of 2018, it added.

    "In the fourth quarter, TMK's financial performance will continue to be driven by strong demand in the U.S., with improvement also expected in the Russian market," Alexander Shiryaev, TMK's chief executive, said in a statement.

    The company, controlled by Russian businessman Dmitry Pumpyansky, posted third-quarter net profit of $22 million, up from $11 million a year ago. 

    Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 34 percent to $169 million, it said, while revenue increased by 39 percent to $1.1 billion.

    TMK has said it is considering different options for its U.S. subsidiary IPSCO but intended to keep a controlling stake in the firm.

    The third-quarter results were stronger than expected, but the key market focus now is on the potential sale or initial public offering of its U.S. division, analysts at BCS investment bank said in a note.

    "In the U.S., despite the recent stabilisation of the rig count the company expects its North American division will achieve strong results in the fourth quarter of 2017 supported by OCTG (pipes for the oil and gas industry) and line pipe demand," TMK said in its statement.


Edited by SHMET

India considering cut in iron ore export tax –sources

Date Nov 17 2017 14:02:57 Source:Reuters

    NEW DELHI, Nov 16 (Reuters) - India is considering scrapping or reducing a 30 percent export tax on medium-grade iron ore after building up a stubbornly high surplus of the commodity, according to a document seen by Reuters.

    India's mining industry has lobbied for months for a cut in the duty after the country's stockpile rose over the last five years to reach 149 million tonnes at the end of the financial year in March 2017. 

    It has stayed around that level, a senior mines ministry official said on Thursday, without wishing to be identified.

    The duty is applied to ore with more than 58 percent iron, or Fe content.

    The mines ministry favours either cutting or scrapping the tax but the steel ministry wants to maintain the levy at 30 percent.

    "The major share of the stocks lying idle is ... below 58 percent Fe grade iron ore fines and iron ore fines with Fe content of 60 percent to below 62 percent, which is a huge cause of concern for the miners as well as the ministry," the mines ministry said in the document, which proposes a review of the export tax.

    "The main objective of the committee is to assess whether a reduction/abolition in export duty in iron ore is required in the current economic scenario and if required, its impact on production, consumption, price elasticity of iron as well as its domino effect," it said.

    The ministry has circulated its document to the steel, finance and commerce ministries for discussion.

    The steel ministry, however, has opposed cutting the duty amid concerns in the steel industry that a lower export duty could lead to a domestic shortage of iron ore, two steel ministry officials, who also spoke on condition of anonymity, said.

    "We should look at value-addition such as pelletisation of the ore to generate demand from the stockpile," one of the officials said. Pellets are mostly used for the production of sponge iron in gas-based plants.

    "There is one more meeting to be held soon, where we are likely to take a decision and send it to the minister of mines for his comments," the mines ministry official said on condition of anonymity, as the discussions have not yet been made public.

    The commerce ministry will make a final decision on the matter.

    The government may decide to cut the duty in its 2018/19 budget statement, likely in February, the mines ministry official said.

    "If the decision is too close to the budget, it might be announced then," the official said.

    The ministries of finance, steel, mines and commerce did not immediately respond to Reuters emails seeking comment. 

    Local media recently reported that the government of Goa had sought a separate exemption from export duty for the low quality iron ore found in the state.    

    "There is no buyer below 63 percent Fe, as (local) steel companies don't buy," said R.K. Sharma, secretary-general of the Federation of Indian Mineral Industries in New Delhi, which supports abolishing the export duty. 

    "To some extent, Indian iron ore will become competitive if the export duty is removed," Sharma said.  



Edited by SHMET

Fire hits Freeport Indonesia port facility in Papua

Date Nov 17 2017 14:01:53 Source:Reuters
    TIMIKA, Indonesia, Nov 17 (Reuters) - A fire broke out at the main port used by copper miner Freeport-McMoRan Inc  FCX.N  in Papua, Indonesia, on Thursday night, the company said.

    The fire occurred at the Amamapare port in a plant where copper concentrate from the giant Grasberg copper mine is processed before loading onto vessels for shipping.

    The fire broke out at 6.30 pm and was extinguished by port rescue workers at around 7 pm, Freeport spokesman Riza Pratama said in a statement. The incident would have no impact on shipments, he said.

    The cause of the incident was not immediately clear but maintenance had been carried out at the port earlier on Thursday, company sources said.

    "This incident is still being investigated and will be reported to the Energy and Mineral Resources Ministry and Mining Inspector," Pratama said.


Edited by SHMET