Shanghai steel skids to 3-1/2 mth low after Trump sets tariffs

Date Mar 09 2018 15:49:05 Source:Reuters

    MANILA, March 9 (Reuters) - Chinese steel futures slumped to their weakest since November on Friday after steel and metals associations in China called on Beijing to retaliate against the United States for slapping hefty tariffs on steel and aluminium imports.

    Steelmaking ingredients - iron ore and coke - were also sold off, each dropping about 5 percent.

    While steel shipments from China account for a small portion of U.S. steel imports, any retaliatory action from China and other countries would not bode well for the global economy, analysts say.

    The Chinese steel and metals industry groups appealed to their government "to take resolute measures against imports of some U.S. products" after U.S. President Donald Trump set a 25 percent tariff on steel and 10 percent on aluminium to counter cheap imports, especially from China. 

    "This tit-for-tat situation is not good for the global economy. Across the board, these trade barriers will affect global economic growth," said Helen Lau, analyst at Argonaut Securities.

    The most-active rebar on the Shanghai Futures Exchange fell as much as 4.9 percent to 3,663 yuan ($578) a tonne, its weakest since Nov. 20. It closed down 3.7 percent at 3,709 yuan.

    Trump's move risks setting off a global trade war that could see other countries responding with similar trade barriers on products that may hit the U.S. economy, analysts say.

    "What worries the whole market and investors is what if this is just a beginning? Other countries can implement counter-policies that can make things worse," said CLSA analyst Daniel Meng.

    Apart from trade tensions with the United States, Argonaut's Lau said there are worries over Chinese steel demand.

    "People are also jittery about demand after March," said Lau. "Inventory has built up quite fast and after March a lot of construction activity will resume, so if demand is slower than expectations, there will be further pressure on prices."

    Inventories of construction steel product reached 7.13 million tonnes on Feb. 23, the most since March last year, data compiled by SteelHome consultancy showed.  

    A separate inventory by Mysteel consultancy showed steel stocks at Chinese traders topping 10 million tonnes on March 1.

    Along with steel, the most-traded May iron ore on the Dalian Commodity Exchange lost 5.2 percent to end at 483.50 yuan a tonne, after hitting 481 yuan, its lowest since Nov. 20.

    Amid slow demand, stocks of iron ore at China's major ports reached a record high 159.1 million tonnes on March 2, SteelHome data showed.

    Iron ore for delivery to China's Qingdao port slid 3.4 percent to $73.23 a tonne on Thursday, its weakest since Feb. 1, according to Metal Bulletin.    

    Coking coal futures dropped 3.1 percent and coke fell 4.7 percent.


    ($1 = 6.3406 Chinese yuan)


Edited by SHMET

Chile's Codelco receives approval for $1 bln desalination plant

Date Mar 09 2018 15:42:37 Source:Reuters

   SANTIAGO, March 8 (Reuters) - Chile's state-owned mining company Codelco, the largest copper producer in the world, received environmental approval this week to build a $1 billion desalination plant to supply water to its operations in the country's northern region.

    The go-ahead from the Antofagasta region's environmental regulator will allow the company to expand its Radomiro Tomic mine and advance with an ambitious investment plan in its water-intensive mining operations in one of the driest deserts

in the world.

    The plant would be the second-largest desalination plant in the South American country, behind the one supplying BHP's Escondida copper mine, the largest in the world. Chile is the world's No. 1 exporter of the red metal.



Edited by SHMET

Administrators seek to return Steinmetz's mining firm BSGR to solvency

Date Mar 09 2018 15:40:49 Source:Reuters

    LONDON, March 8 (Reuters) - Administrators for BSG Resources (BSGR) said on Thursday they would work to return the mining firm to solvency and pay creditors in full after it voluntarily entered administration to protect it from legal disputes related to a project in Guinea.

    BSGR, the mining arm of billionaire Beny Steinmetz's businesses, is caught up in a row linked to Guinea's vast Simandou iron ore reserves. BSGR and Steinmetz deny any wrongdoing in the dispute. 

    BSGR is also suing financier George Soros for $10 billion in damages over lost contracts. Soros has sought to have the lawsuit dismissed. A judge put the case on hold in November.

    BSGR Director Dag Cramer told Reuters on Wednesday that going into administration was to protect the company against "any adverse or malicious development out of our control."

    "It's very, very simple. This is not a liquidation. This is not a bankruptcy. We have voluntarily put ourselves into administration," he said.

    Cramer said he would stay on as director and the technical procedure would not affect daily operations of subsidiaries or the firm's determination to "go the distance" with arbitration over Guinea.

    Accountancy and business advisory firm BDO said in a statement emailed on Thursday that its representatives in London and in Guernsey had been appointed by a court as joint administrators on March 6.

    "Our primary objective is to return BSGR to solvency and to ensure that all creditors will be paid in full," BDO said.

    "If the company can be returned to solvency and continue as a going concern, the administration will end and the company will revert to the control of its directors," it added.

    BSGR is a private firm registered in Guernsey whose subsidiaries include the Koidu diamond mine in Sierra Leone.

    A BSGR spokesman told Reuters that Steinmetz did not sit on BSGR's board or have an executive role, but "is the beneficiary of the foundation that owns BSG Resources".

    As part of international efforts to improve transparency, Guinea's government under President Alpha Conde, elected in 2010, launched a review of mining contracts signed before 2011.

    Within its review the West African nation investigated how BSGR obtained rights to the Simandou deposit, the world’s largest untapped iron ore reserves, in 2008.

    Anglo-Australian mining group Rio Tinto and BSGR have made legal claims against each other over the mining rights in Simandou. 

Edited by SHMET

Russia's Nornickel co-owners reach conditional share deal

Date Mar 09 2018 15:37:12 Source:Reuters

   LONDON, March 8 (Reuters) - Russian billionaire Roman Abramovich has struck a deal that would allow him to sell a 4 percent stake in miner Norilsk Nickel to fellow shareholders Vladimir Potanin and aluminium producer Rusal, pending the outcome of a court case, a lawyer for Rusal said.

    Under the provisional arrangement, Abramovich's Cyprus-based company Crispian would be able to sell the shares to Potanin and Rusal in proportion to their existing holdings in Norilsk Nickel (Nornickel), the lawyer told a London court on Thursday.

    However, any transfer of shares would be reversed if the court rules in favour of Rusal in a dispute.

    Rusal is trying to stop Chelsea soccer club owner Abramovich from selling Nornickel shares, arguing that would violate a 2012 shareholder agreement.

    Interros, which manages Potanin's assets, said it planned to complete its purchase of a 2 percent stake in Nornickel from Abramovich next week. Rusal did not immediately reply to requests for comment.

    The ownership dispute is part of a long-running battle for control of Nornickel, a $31 billion company that competes with Brazil's Vale for the rank of the world's top nickel producer. It is also the world's largest palladium producer.

    Potanin owns a 30.4 percent stake in Nornickel and Rusal, controlled by billionaire Oleg Deripaska, holds 27.8 percent. Abramovich and his partners hold a 6.3 percent stake.

    Judge Christopher Butcher said the trial over the legality of the share sale by Abramovich would start on May 14 unless the parties appealed for a delay by April 13.


Edited by SHMET

Shanghai copper slumps to lowest since Sept on dollar, U.S. tariff concerns

Date Mar 09 2018 15:34:00 Source:Reuters
   MELBOURNE/BEIJING, March 9 (Reuters) - Shanghai copper on Friday touched its lowest since September as the dollar edged upwards and investors focused on escalating tensions over U.S. metal imports.
    A stronger greenback makes metals more expensive for holders of other currencies, weighing on prices.
    U.S. President Donald Trump's 25 percent import tariff on steel and 10 percent tariff on aluminium, with initial exemptions for Canada and Mexico, will begin within 15 days, a senior administration official said on Thursday. 
    Nomura, however, played down the impact on exports from top steel and aluminium maker China, noting that the "U.S. share of China's total steel and aluminium exports was only (around) 16 percent". 
    * SHFE COPPER: Shanghai Futures Exchange copper fell by 2 percent to 51,110 yuan ($8,058.97) a tonne, its lowest since Sept. 18, before recovering slightly to 51,330 yuan a tonne by the mid-session interval.
    * LONDON COPPER: London Metal Exchange copper was down 0.5 percent at $6,797.50 a tonne by 0355 GMT, having earlier touched its lowest since Feb. 9.  
    * ZINC: Zinc, used to galvanise steel, was hit hardest, falling by 2.9 percent to 24,525 yuan a tonne in Shanghaiits lowest since Dec. 8, before cutting its losses to 2.5 percent.
    * STEEL: The most traded steel rebar contract in Shanghai slumped by 3.9 percent to 3,703 yuan a tonne, hitting a 3-1/2 month low after Trump's tariff decision. 
Nickel, used to make stainless steel, fell 1.5 percent in Shanghai.
    * CHINA REACTION: China's steel and metals associations called on Friday for Beijing to retaliate against the U.S. tariffs, as a widely read tabloid said the country will not be bullied by threats of a trade war with the world's top economy.
    * ASIA REACTION: Japan said the tariffs would have a "big impact" on the countries' close bilateral ties, while South Korea said it may file a complaint to the World Trade Organization. 
    * IMF: International Monetary Fund Managing Director Christine Lagarde said on Thursday that she feared a "tit-for-tat" escalation of trade retaliation over the U.S. tariffs that would sap business confidence and investment.        
    * For the top stories in metals and other news, click 
    * Asian shares rallied and the safe-haven yen eased on Friday after North Korean leader Kim Jong Un offered to stop nuclear and missile testing and U.S. President Donald Trump agreed to a meeting that could come before May. 
    0630  Bank of Japan Governor Haruhiko Kuroda speaks to 
          reporters at the end of the central bank policy
    0700  Germany Industrial output Jan
    0700  Germany Trade data Jan
    0745  France Industrial output Jan
    1330  U.S. Nonfarm payrolls Feb
    1330  U.S. Unemployment rate Feb
    1330  Euro zone Employment Q1
    1500  U.S. Wholesale sales Jan
 BASE METALS PRICES                        0357 GMT
 Three month LME copper        CMCU3         6797.5
 Most active ShFE copper       SCFcv1         51330
 Three month LME aluminium     CMAL3           2106
 Most active ShFE aluminium    SAFcv1         14195
 Three month LME zinc          CMZN3           3198
 Most active ShFE zinc         SZNcv1         24620
 Three month LME lead          CMPB3           2349
 Most active ShFE lead         SPBcv1         18355
 Three month LME nickel        CMNI3          13195
 Most active ShFE nickel       SNIcv1        100860
 Three month LME tin           CMSN3          21450
 Most active ShFE tin          SSNcv1        146850
 BASE METALS ARBITRAGE                             
 LME/SHFE COPPER              LMESHFCUc3    1111.91
 LME/SHFE ALUMINIUM           LMESHFALc3   -1311.71
 LME/SHFE ZINC                LMESHFZNc3     542.12
 LME/SHFE LEAD                LMESHFPBc3     200.14
 LME/SHFE NICKEL              LMESHFNIc3    1999.14
 ($1 = 6.3420 Chinese yuan renminbi)


Edited by SHMET