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01.25
Copper Commodity 2012 Prices Rise
Written By mine on Sabtu, 04 Februari 2012 | 01.25
Copper commodity prices 2012, despite finally reaching an agreement with management, workers at Freeport McMoRan's giant Grasberg mine further delayed their return to work after a three month strike that the company says is costing it roughly 2m pounds of copper production daily.
While an extreme case, the situation at Grasberg, the world's second largest copper mine, is not the only setback facing the supply side of the global copper market.
As Macquarie's commodities research team pointed out last week, "Global copper mine output has continually disappointed forecasts and, more importantly, market needs over a number of years now, despite the strong financial incentive not only from high copper prices but also high by-product prices and a fall in processing fees paid by miners to smelters."
It adds that while there is no one consistently dominant cause of these losses, "the cumulative impact has been significant year-in and year-out since the middle of the last decade."
Despite the continual disappointment, it is worth pointing out, as UBS does in a recent report that global copper supply is forecast to lift 4.7% to 20.6Mt in 2012, driven by mine supply growth of +9.9% in Chile (6.0Mt), +11% from the US (1.3Mt), +10% from China (1.5Mt) and +13.7% from Zambia (0.96Mt).
But, the group adds, "unions are strongly incentivized to seek higher wages in 2012, given the high profits being generated among the producers" which it says could lead to further strikes in the sector and frustrated supply growth.
While not particularly novel, these supply constraints have served to help mute concerns on the demand side of the market that have seen prices of the red metal fall strongly as concerns have risen about slowing demand not only in the West but also in China.
Continued concerns about the state of the Euro zone and, in particular, the longer term impact of the crisis on the region's banking sector and its impact on liquidity have seen prices in many of the industrial metals decline, especially as demand from China has weakened.
As Standard Bank pointed out recently, "Access to credit relates to tight domestic monetary policy. But it also relates to the reduction in credit extension of especially European banks to many Chinese firms. Furthermore, the European problems are creating great uncertainty for businesses in China which is exacerbated by (a) a decline in export orders from Europe; and (b) commodities being diverted from Europe to China as European demand falter. As one metal importer put it "Chinese businesses are more concerned about Europe's debt problem than Europeans themselves".
Looking out to the first quarter of 2012, however, some analysts believe that this slowdown in Chinese demand could reverse.
According to UBS, "Of all the base metals, copper features the most robust, short-term fundamentals. For even with a subdued economic outlook, China is short copper. This was highlighted by how import flows jumped in recent months, following only a modest improvement in China's general credit liquidity."
It adds, that while it expects copper's price to lift going into 2012, in line with this restocking event, there remain three key risks to the price of the metal.
The first of these is that the Chinese New Year may result in an easing of purchases in December and January. The second is the demand gap between private and government-led construction.
"Tao Wang, UBS China economist, believes government-led social housing programmes will offset trade weakness in private housing construction (private falls 15%; social housing floor-space lifts 50%). But we highlight a risk that the timing of the two trade shifts may be out sufficiently to create a short-term weakness in copper's demand and price," the bank writes.
And, finally, it points out that the narrowing of the SHFE:LME price differential since October has undermined the trader incentive to import metal, which may lead to a bearish build in metal inventories ex-China."
But, while these risks are significant, the bank believes that they are only likely to occur in the weeks leading up to the Chinese New Year. "Beyond that, we see a conventional seasonal restock (from Feb- 12) completely offsetting these risks, with copper's price strengthening throughout 1Q12.
Further out, however, the Bank, like Macquarie, is conscious of the supply-side situation but, remains more positive on the markets, ability to deliver new production.
"A genuine supply response to copper's recent, high price is underway, mainly out of Africa and South America. The DRC and Zambia are together expected to deliver new supply at a rate that will weigh on the price over the longer term."
While an extreme case, the situation at Grasberg, the world's second largest copper mine, is not the only setback facing the supply side of the global copper market.
As Macquarie's commodities research team pointed out last week, "Global copper mine output has continually disappointed forecasts and, more importantly, market needs over a number of years now, despite the strong financial incentive not only from high copper prices but also high by-product prices and a fall in processing fees paid by miners to smelters."
It adds that while there is no one consistently dominant cause of these losses, "the cumulative impact has been significant year-in and year-out since the middle of the last decade."
Despite the continual disappointment, it is worth pointing out, as UBS does in a recent report that global copper supply is forecast to lift 4.7% to 20.6Mt in 2012, driven by mine supply growth of +9.9% in Chile (6.0Mt), +11% from the US (1.3Mt), +10% from China (1.5Mt) and +13.7% from Zambia (0.96Mt).
But, the group adds, "unions are strongly incentivized to seek higher wages in 2012, given the high profits being generated among the producers" which it says could lead to further strikes in the sector and frustrated supply growth.
While not particularly novel, these supply constraints have served to help mute concerns on the demand side of the market that have seen prices of the red metal fall strongly as concerns have risen about slowing demand not only in the West but also in China.
Continued concerns about the state of the Euro zone and, in particular, the longer term impact of the crisis on the region's banking sector and its impact on liquidity have seen prices in many of the industrial metals decline, especially as demand from China has weakened.
As Standard Bank pointed out recently, "Access to credit relates to tight domestic monetary policy. But it also relates to the reduction in credit extension of especially European banks to many Chinese firms. Furthermore, the European problems are creating great uncertainty for businesses in China which is exacerbated by (a) a decline in export orders from Europe; and (b) commodities being diverted from Europe to China as European demand falter. As one metal importer put it "Chinese businesses are more concerned about Europe's debt problem than Europeans themselves".
Looking out to the first quarter of 2012, however, some analysts believe that this slowdown in Chinese demand could reverse.
According to UBS, "Of all the base metals, copper features the most robust, short-term fundamentals. For even with a subdued economic outlook, China is short copper. This was highlighted by how import flows jumped in recent months, following only a modest improvement in China's general credit liquidity."
It adds, that while it expects copper's price to lift going into 2012, in line with this restocking event, there remain three key risks to the price of the metal.
The first of these is that the Chinese New Year may result in an easing of purchases in December and January. The second is the demand gap between private and government-led construction.
"Tao Wang, UBS China economist, believes government-led social housing programmes will offset trade weakness in private housing construction (private falls 15%; social housing floor-space lifts 50%). But we highlight a risk that the timing of the two trade shifts may be out sufficiently to create a short-term weakness in copper's demand and price," the bank writes.
And, finally, it points out that the narrowing of the SHFE:LME price differential since October has undermined the trader incentive to import metal, which may lead to a bearish build in metal inventories ex-China."
But, while these risks are significant, the bank believes that they are only likely to occur in the weeks leading up to the Chinese New Year. "Beyond that, we see a conventional seasonal restock (from Feb- 12) completely offsetting these risks, with copper's price strengthening throughout 1Q12.
Further out, however, the Bank, like Macquarie, is conscious of the supply-side situation but, remains more positive on the markets, ability to deliver new production.
"A genuine supply response to copper's recent, high price is underway, mainly out of Africa and South America. The DRC and Zambia are together expected to deliver new supply at a rate that will weigh on the price over the longer term."
20.32
Copper Traded Pressured by Strong Dollar, Copper Prices Concern Outlook for Demand
Written By mine on Senin, 28 November 2011 | 20.32
Copper yesterday traded with the positive node and settled 0.12% up at 377.55 after dropping Friday pressured by a strong dollar, also prices weighed on concerns about the outlook for demand as the euro zone debt crisis deepened.
Market participants remain focused on political developments in Europe, as leaders there struggle to stem the spread of sovereign debt problems to larger economies.
In Europe, the ongoing political crisis is feeding through into a significant tightening of credit, and that negative effect is a clear economic shock.
Highlighting the deepening debt crisis in the euro zone, Italy paid a record 6.5 percent to borrow money over six months on Friday and its longer-term funding costs soared far above levels seen as sustainable for public finances.
The International Copper Study Group (ICSG) said this week world refined copper market was in deficit of 161,000 tonnes in the first eight months of the year, although that's narrower than a deficit of 339,000 tonnes in the same period last year.
Latest data shows inventories of the metal held in LME-monitored warehouses fell to 394,725 tonnes, the lowest since early February.
In yesterday's trading session Copper has touched the low of 377.05 after opening at 377.7, and finally settled at 377.55.
For today's session market is looking to take support at 377.1, a break below could see a test of 376.6 and where as resistance is now likely to be seen at 378, a move above could see prices testing 378.5.
Copper trading range is 376.6-378.5.
Copper slipped pressured by strong $, also weighed on concerns about outlook for demand as euro crisis deepened, EU debt crisis remains in focus as traders worry about the global economic outlook
Codelco "optimistic" in medium to long-term copper price outlook.
Market participants remain focused on political developments in Europe, as leaders there struggle to stem the spread of sovereign debt problems to larger economies.
In Europe, the ongoing political crisis is feeding through into a significant tightening of credit, and that negative effect is a clear economic shock.
Highlighting the deepening debt crisis in the euro zone, Italy paid a record 6.5 percent to borrow money over six months on Friday and its longer-term funding costs soared far above levels seen as sustainable for public finances.
The International Copper Study Group (ICSG) said this week world refined copper market was in deficit of 161,000 tonnes in the first eight months of the year, although that's narrower than a deficit of 339,000 tonnes in the same period last year.
Latest data shows inventories of the metal held in LME-monitored warehouses fell to 394,725 tonnes, the lowest since early February.
In yesterday's trading session Copper has touched the low of 377.05 after opening at 377.7, and finally settled at 377.55.
For today's session market is looking to take support at 377.1, a break below could see a test of 376.6 and where as resistance is now likely to be seen at 378, a move above could see prices testing 378.5.
Copper trading range is 376.6-378.5.
Copper slipped pressured by strong $, also weighed on concerns about outlook for demand as euro crisis deepened, EU debt crisis remains in focus as traders worry about the global economic outlook
Codelco "optimistic" in medium to long-term copper price outlook.
18.42
Commodity Research Copper Demand in 2009 and 2010 Strong while 2012 still Growth
Written By mine on Sabtu, 19 November 2011 | 18.42
Copper demand 2012 still growth, but it?s not going to grow as fast as it did in 2009 and 2010, said head of commodities research at Standard Bank Plc in London. That will still support industrial commodities. We see the supply side lagging substantially for copper. We still think the copper market will be in deficit next year. Global demand for copper will still expand 2012, rising 2.7 percent compared with 3.7 percent in 2011, Barclays Capital estimates. The bank is forecasting shortages as mining companies fail to keep up with consumption. Developing economies will expand 6.1 percent, compared with 1.9 percent for advanced economies, the IMF forecasts.
Copper consumption growth in China, the largest user, will slow next year as the economy cools, according to Beijing Antaike Information Development Co.
Refined copper consumption is forecast to rise 6.4 percent to 7.85 million metric tons in 2012, said Yang Changhua, a copper analyst in Antaike who has been studying the market for more than a decade. This compares with 8.5 percent growth this year to 7.38 million tons, Antaike?s data showed.
Copper consumption growth in China, the largest user, will slow next year as the economy cools, according to Beijing Antaike Information Development Co.
Refined copper consumption is forecast to rise 6.4 percent to 7.85 million metric tons in 2012, said Yang Changhua, a copper analyst in Antaike who has been studying the market for more than a decade. This compares with 8.5 percent growth this year to 7.38 million tons, Antaike?s data showed.
12.53
Commodity Price Jump, Canadian Dollar Advanced
Written By mine on Minggu, 23 Oktober 2011 | 12.53
Commodity prices were up sharply as traders looked to the middle of next week for an agreement that would deal comprehensively with Europe's debt crisis. Canadian dollar advanced Friday as commodity prices strengthened and inflation numbers for September came in higher than expected.
The loonie was up 0.62 of a cent to 99.14 cents US.
In the U.S., the greenback weakened as traders looked hopefully to next week for a comprehensive solution to a crippling European debt crisis that threatens the region's banks and the economic recovery.
Traders also took in data showing higher than expected inflation in Canada.
Statistics Canada said the country?s annual inflation rate edged up a notch to 3.2 per cent last month. On a month-to-month basis, consumer prices rose two-tenths of a percentage point between August and September.
The Bank of Canada's core inflation index shot up 0.3 of a point to 2.2 per cent, the largest annual gain since December 2008, which puts core inflation above the central bank?s two per cent target for the first time since February 2010.
However, analysts say price pressures are moderating and that inflation should move lower in the current quarter.
"With the gradual deceleration in gasoline price inflation that began in the summer likely to continue, the headline rate is forecast to fall in the fourth quarter," said RBC assistant chief economist Dawn Desjardins.
"Additionally, the economy's slower than expected second-quarter performance will limit price pressures in the near term."
Germany and France announced Thursday afternoon that in addition to Sunday?s summit of eurozone leaders, a second meeting will be held Wednesday.
Europe's two biggest economies are at loggerheads over how to make best use of the bailout fund, the so-called European Financial Stability Facility, or EFSF. While France is proposing to turn it into a bank, which would have access to unlimited credit from the European Central Bank, Germany appears reluctant to sanction such a move.
Meanwhile, Eurozone finance ministers said Friday that Greece will get its next batch of aid money amounting to ?8 billion, likely by mid-November, saving the country from a potentially disastrous default. The ministers also said that they were working on a second rescue package for the debt-ridden country, which would include new aid money and contributions from the private sector.
The willingness to take on extra risk pushed commodity prices sharply higher, with the December crude contract on the New York Mercantile Exchange ahead $1.33 at US$87.40 a barrel.
Copper prices recovered somewhat with the December contract ahead 17 cents to US$3.22 a pound after tumbling 20 cents on Thursday. And the December gold contract jumped $23.20 to US$1,636.10 an ounce.
The loonie was up 0.62 of a cent to 99.14 cents US.
In the U.S., the greenback weakened as traders looked hopefully to next week for a comprehensive solution to a crippling European debt crisis that threatens the region's banks and the economic recovery.
Traders also took in data showing higher than expected inflation in Canada.
Statistics Canada said the country?s annual inflation rate edged up a notch to 3.2 per cent last month. On a month-to-month basis, consumer prices rose two-tenths of a percentage point between August and September.
The Bank of Canada's core inflation index shot up 0.3 of a point to 2.2 per cent, the largest annual gain since December 2008, which puts core inflation above the central bank?s two per cent target for the first time since February 2010.
However, analysts say price pressures are moderating and that inflation should move lower in the current quarter.
"With the gradual deceleration in gasoline price inflation that began in the summer likely to continue, the headline rate is forecast to fall in the fourth quarter," said RBC assistant chief economist Dawn Desjardins.
"Additionally, the economy's slower than expected second-quarter performance will limit price pressures in the near term."
Germany and France announced Thursday afternoon that in addition to Sunday?s summit of eurozone leaders, a second meeting will be held Wednesday.
Europe's two biggest economies are at loggerheads over how to make best use of the bailout fund, the so-called European Financial Stability Facility, or EFSF. While France is proposing to turn it into a bank, which would have access to unlimited credit from the European Central Bank, Germany appears reluctant to sanction such a move.
Meanwhile, Eurozone finance ministers said Friday that Greece will get its next batch of aid money amounting to ?8 billion, likely by mid-November, saving the country from a potentially disastrous default. The ministers also said that they were working on a second rescue package for the debt-ridden country, which would include new aid money and contributions from the private sector.
The willingness to take on extra risk pushed commodity prices sharply higher, with the December crude contract on the New York Mercantile Exchange ahead $1.33 at US$87.40 a barrel.
Copper prices recovered somewhat with the December contract ahead 17 cents to US$3.22 a pound after tumbling 20 cents on Thursday. And the December gold contract jumped $23.20 to US$1,636.10 an ounce.
06.38
Copper Prices Down as Global Event Crisis and Demand future Month
Written By mine on Sabtu, 02 April 2011 | 06.38
Copper prices in ending March and first April 2011 down as global events such as Japan's crisis renewed concerns about demand in the next few months.
Copper for May delivery fell 7.25 cents to settle at $4.274 a pound. The price has fallen nearly 5 percent since March 1.
Investors question whether copper demand will soften with Japan's recovery from the earthquake and tsunami, Europe's ongoing financial problems and rising oil prices, CPM Group analyst Carlos Sanchez said.
Copper is used in manufacturing a variety of consumer products, from construction materials to electronics and some auto parts.
Thousands of factories in Japan were idled by tsunami damage and power disruptions after the devastating earthquake earlier this month. That has left shortages of auto parts and technology components.
Meanwhile, Portugal's borrowing rates continued to rise, which could weaken market confidence in the region's ability to resolve the crisis. Europe already has arranged multi-billion dollar bailouts for Greece and Ireland.
There also are concerns that oil prices above $100 a barrel may cause consumers and businesses to cut back consumption, Sanchez said.
June palladium rose $5.15 to settle at $758.10 an ounce and July platinum gained $30 to settle at $1,774.10 an ounce. May gold added $7.60 to settle at $1,423.80 an ounce and silver gained 52.4 cents to $37.511 an ounce.
In other trading, oil prices slipped after the Energy Department said U.S. crude supplies rose more than expected last week.
Crude supplies increased 2.9 million barrels to 355.7 million barrels, which is 0.4 percent above year-ago levels, the Energy Information Administration said.
Analysts expected an increase of 2.2 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos.
Benchmark crude for May delivery lost 52 cents to settle at $104.27 per barrel on the New York Mercantile Exchange.
In April Nymex contracts, heating oil fell 0.39 cent to settle at $3.0534 per gallon and gasoline rose 1.37 cents to $3.0573 per gallon. Natural gas for May delivery added 9.2 cents to settle at $4.355 per 1,000 cubic feet.
Wheat, corn and soybeans were mixed ahead of a government forecast due Thursday on what crops farmers will plant this year.
In May contracts, wheat prices fell 10 cents to settle at $7.2725 a bushel, corn lost 8.5 cents to $6.6325 a bushel and soybeans rose 10.5 cents to $13.72 a bushel.
Kazakh copper miner Kazakhmys on a underlying basis, profits were up an even more impressive 147%.
So what was behind this? Revenues and profits were boosted by strong demand from China, where the company sells half its production. It forecasts a positive long-term outlook with copper prices supported by fundamental demand and constrained supply.
With other voices casting doubt on the true underlying Chinese demand, though, it could be a case of "what goes up must come down".
The core of the company's operations is a fully integrated copper mining and smelting business in Kazakhstan, with 15 mines throughout the country and two smelters. It is the largest copper producer in Kazakhstan and is in the top ten producers worldwide. Gold, silver and zinc are produced as by-products.
The company also owns 50% of the largest coal fired power station in Kazakhstan, with about 20% of its output exported to Russia (EUREX: OMXR.EX - news) , and has an embryonic petroleum division with exploration rights near the Caspian Sea.
It has a 26% interest in Eurasian Natural Resources Corp , a diversified natural resources company also largely based in Kazakhstan, but with wider international scope and ambitions. ENRC's ?12bn market cap adds substantially to Kazakhmys' ?7.6bn value and contributed a third of profits.
The strong results were based on revenues up a third to $3.2bn, matching 2008. Recovery in demand boosted prices, with copper 46% higher than the previous year.
Volumes of copper production were down 7%, which contributed to a rise in unit production costs of 24%. At 89c/lb this compares favourably with Antofagasta (Xetra: 867578 - news) 's 104c/lb. But the company, which held down salary costs, warned that cost pressures increased over the course of the year.
The net effect was that in 2010 each pound of copper cost 89 cents to produce and yielded a 252 cents cash profit, against a 156 cents cash profit on 2009's 72 cents production cost. That's a lot of leverage on the price of copper.
Profit attributable to shareholders nearly trebled and investors were rewarded with a 144% increase in dividend per share, covered twelve times.
Stronger cash flow funded a 55% increase in capex, with both maintenance and expansionary spending scaled up. Even so, net debt halved to $350m and gearing was a negligible 8.6%.
Kazakhmys has 2.7bn Kt of proved and probable copper reserves, of which around one third is located in operating mines. It has two major growth projects, which are expected to start production in 2014 and 2015.
Subsoil reserves are legally the property of the state, and the company operates under licences running to various dates up to 2062. But with the government owning a 26% shareholding and with representation on the board, the company's position should be secure.
Kazakhmys expects copper output for 2011 to be similar to 2010's, with annual contracts already signed for 90% of production. It also sees the long-term outlook as positive.
It compares copper consumption per capita in the BRIC (Chicago Options: ^RBRCUSD - news) countries of between 1 kg (India) and 5 kg (Russia) with 6kg for US, 9Kg for Japan (NYSE: MCO - news) and 17Kg for Germany.
With GDP per capita of the BRIC countries around a fifth of developed nations, there is scope for substantial growth. At the same time, average mine life, and the grade of copper produced, have been in steep decline.
So perhaps it is not surprising that copper prices are at an all time high. But there is another angle. For some time, the Financial Times' Alphaville blog has been running a story about the extent to which Chinese demand for copper is artificially inflated by its use as a financing tool.
Research by Standard Bank suggests that companies with no real use for the metal, such as property developers, purchase it on deferred terms and then use it as collateral to borrow at cheap rates -- or to get loans they otherwise couldn't.
Anecdotally, around 40% of China's net imports of refined copper is sitting in bonded warehouses. Standard Bank describes how falling Chinese property prices could have a devastating outcome for the copper market, causing prices to plummet.
Kazakhmys' ties with China are strong. China takes half its production, it has drawn $700m of a $2.7bn financing line from the China Development Bank, and it is contemplating a secondary listing in Hong Kong. Of the copper miners, it would perhaps be hit hardest by a Chinese meltdown.
A mining company with substantial resources is a safer play than the underlying commodity, and exposure to copper miners makes sense in most portfolios. But I would be wary of timing in buying into the sector.
Copper for May delivery fell 7.25 cents to settle at $4.274 a pound. The price has fallen nearly 5 percent since March 1.
Investors question whether copper demand will soften with Japan's recovery from the earthquake and tsunami, Europe's ongoing financial problems and rising oil prices, CPM Group analyst Carlos Sanchez said.
Copper is used in manufacturing a variety of consumer products, from construction materials to electronics and some auto parts.
Thousands of factories in Japan were idled by tsunami damage and power disruptions after the devastating earthquake earlier this month. That has left shortages of auto parts and technology components.
Meanwhile, Portugal's borrowing rates continued to rise, which could weaken market confidence in the region's ability to resolve the crisis. Europe already has arranged multi-billion dollar bailouts for Greece and Ireland.
There also are concerns that oil prices above $100 a barrel may cause consumers and businesses to cut back consumption, Sanchez said.
June palladium rose $5.15 to settle at $758.10 an ounce and July platinum gained $30 to settle at $1,774.10 an ounce. May gold added $7.60 to settle at $1,423.80 an ounce and silver gained 52.4 cents to $37.511 an ounce.
In other trading, oil prices slipped after the Energy Department said U.S. crude supplies rose more than expected last week.
Crude supplies increased 2.9 million barrels to 355.7 million barrels, which is 0.4 percent above year-ago levels, the Energy Information Administration said.
Analysts expected an increase of 2.2 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos.
Benchmark crude for May delivery lost 52 cents to settle at $104.27 per barrel on the New York Mercantile Exchange.
In April Nymex contracts, heating oil fell 0.39 cent to settle at $3.0534 per gallon and gasoline rose 1.37 cents to $3.0573 per gallon. Natural gas for May delivery added 9.2 cents to settle at $4.355 per 1,000 cubic feet.
Wheat, corn and soybeans were mixed ahead of a government forecast due Thursday on what crops farmers will plant this year.
In May contracts, wheat prices fell 10 cents to settle at $7.2725 a bushel, corn lost 8.5 cents to $6.6325 a bushel and soybeans rose 10.5 cents to $13.72 a bushel.
Kazakh copper miner Kazakhmys on a underlying basis, profits were up an even more impressive 147%.
So what was behind this? Revenues and profits were boosted by strong demand from China, where the company sells half its production. It forecasts a positive long-term outlook with copper prices supported by fundamental demand and constrained supply.
With other voices casting doubt on the true underlying Chinese demand, though, it could be a case of "what goes up must come down".
The core of the company's operations is a fully integrated copper mining and smelting business in Kazakhstan, with 15 mines throughout the country and two smelters. It is the largest copper producer in Kazakhstan and is in the top ten producers worldwide. Gold, silver and zinc are produced as by-products.
The company also owns 50% of the largest coal fired power station in Kazakhstan, with about 20% of its output exported to Russia (EUREX: OMXR.EX - news) , and has an embryonic petroleum division with exploration rights near the Caspian Sea.
It has a 26% interest in Eurasian Natural Resources Corp , a diversified natural resources company also largely based in Kazakhstan, but with wider international scope and ambitions. ENRC's ?12bn market cap adds substantially to Kazakhmys' ?7.6bn value and contributed a third of profits.
The strong results were based on revenues up a third to $3.2bn, matching 2008. Recovery in demand boosted prices, with copper 46% higher than the previous year.
Volumes of copper production were down 7%, which contributed to a rise in unit production costs of 24%. At 89c/lb this compares favourably with Antofagasta (Xetra: 867578 - news) 's 104c/lb. But the company, which held down salary costs, warned that cost pressures increased over the course of the year.
The net effect was that in 2010 each pound of copper cost 89 cents to produce and yielded a 252 cents cash profit, against a 156 cents cash profit on 2009's 72 cents production cost. That's a lot of leverage on the price of copper.
Profit attributable to shareholders nearly trebled and investors were rewarded with a 144% increase in dividend per share, covered twelve times.
Stronger cash flow funded a 55% increase in capex, with both maintenance and expansionary spending scaled up. Even so, net debt halved to $350m and gearing was a negligible 8.6%.
Kazakhmys has 2.7bn Kt of proved and probable copper reserves, of which around one third is located in operating mines. It has two major growth projects, which are expected to start production in 2014 and 2015.
Subsoil reserves are legally the property of the state, and the company operates under licences running to various dates up to 2062. But with the government owning a 26% shareholding and with representation on the board, the company's position should be secure.
Kazakhmys expects copper output for 2011 to be similar to 2010's, with annual contracts already signed for 90% of production. It also sees the long-term outlook as positive.
It compares copper consumption per capita in the BRIC (Chicago Options: ^RBRCUSD - news) countries of between 1 kg (India) and 5 kg (Russia) with 6kg for US, 9Kg for Japan (NYSE: MCO - news) and 17Kg for Germany.
With GDP per capita of the BRIC countries around a fifth of developed nations, there is scope for substantial growth. At the same time, average mine life, and the grade of copper produced, have been in steep decline.
So perhaps it is not surprising that copper prices are at an all time high. But there is another angle. For some time, the Financial Times' Alphaville blog has been running a story about the extent to which Chinese demand for copper is artificially inflated by its use as a financing tool.
Research by Standard Bank suggests that companies with no real use for the metal, such as property developers, purchase it on deferred terms and then use it as collateral to borrow at cheap rates -- or to get loans they otherwise couldn't.
Anecdotally, around 40% of China's net imports of refined copper is sitting in bonded warehouses. Standard Bank describes how falling Chinese property prices could have a devastating outcome for the copper market, causing prices to plummet.
Kazakhmys' ties with China are strong. China takes half its production, it has drawn $700m of a $2.7bn financing line from the China Development Bank, and it is contemplating a secondary listing in Hong Kong. Of the copper miners, it would perhaps be hit hardest by a Chinese meltdown.
A mining company with substantial resources is a safer play than the underlying commodity, and exposure to copper miners makes sense in most portfolios. But I would be wary of timing in buying into the sector.
22.23
Prices of Copper Drop in China Rate Increase, Rise in London
Written By mine on Jumat, 11 Februari 2011 | 22.23
Copper prices drop on concern about a potential demand slowdown after China, the world?s biggest consumer of the metal, raised interest rates, a survey showed.
Thirteen of 18 analysts, investors and traders surveyed by Bloomberg, or 72 percent, said the metal will drop next week. Four predicted higher prices and one forecast little change. Copper for delivery in three months was down 1 percent for this week at $9,945 a metric ton at 5 p.m. yesterday on the London Metal Exchange.
China increased borrowing costs on Feb. 8 for the third time in four months to curb inflation that a report next week may show sped up to the fastest pace in 30 months, according to economists. On the same day, Citigroup Inc. said last month?s copper imports into China probably were ?flat or significantly weaker than in December.?
?We see that base-metal prices including copper will continue to drift down following China?s interest-rate hike, curbing near-term appetite for demand,? said Charles Cooper, an analyst at Oriel Securities Ltd. in London. ?We also believe prices to have limited upward support until China announces details on its new five-year plan in March.?
The red bars on the attached chart are derived by subtracting bearish forecasts from bullish estimates, with readings below zero signaling the majority of respondents expect a decline. The green line shows the copper price. The survey data shown are as of Feb. 4.
The weekly copper survey has forecast prices accurately in 58 of the past 123 weeks, or 47 percent of the time.
Copper rose in London, narrowing the first weekly decline in three weeks.
-- Copper rose $9.50, or 0.1 percent, to $9,949.50 a metric ton by 7:56 a.m. on the London Metal Exchange. Relative
Strength Index 61.
-- Aluminum dropped 0.1 percent to $2,535 a ton. RSI 59.
-- Zinc declined 0.4 percent to $2,438 a ton. RSI 53.
-- Lead decreased 0.1 percent to $2,507 a ton. RSI 49.
-- Nickel climbed 0.6 percent to $28,024 a ton. RSI 67.
-- Tin was down 0.1 percent at $31,451 a ton. RSI 84.
Other markets: Last % Change % YTD
U.S. Dollar Index 78.39 0.2 -0.8
Crude oil $87.34 0.7 -4.4
Gold $1,363.43 0.0 -4.0
MSCI World Index 1,335.66 -0.2 4.3
Economic Events:
Forecast Prior Time
(London)
U.S. Trade Balance -$40.5B -$38.3B 13:30
U.S. U. Of Michigan Confidence 75 74.2 14:55
Thirteen of 18 analysts, investors and traders surveyed by Bloomberg, or 72 percent, said the metal will drop next week. Four predicted higher prices and one forecast little change. Copper for delivery in three months was down 1 percent for this week at $9,945 a metric ton at 5 p.m. yesterday on the London Metal Exchange.
China increased borrowing costs on Feb. 8 for the third time in four months to curb inflation that a report next week may show sped up to the fastest pace in 30 months, according to economists. On the same day, Citigroup Inc. said last month?s copper imports into China probably were ?flat or significantly weaker than in December.?
?We see that base-metal prices including copper will continue to drift down following China?s interest-rate hike, curbing near-term appetite for demand,? said Charles Cooper, an analyst at Oriel Securities Ltd. in London. ?We also believe prices to have limited upward support until China announces details on its new five-year plan in March.?
The red bars on the attached chart are derived by subtracting bearish forecasts from bullish estimates, with readings below zero signaling the majority of respondents expect a decline. The green line shows the copper price. The survey data shown are as of Feb. 4.
The weekly copper survey has forecast prices accurately in 58 of the past 123 weeks, or 47 percent of the time.
Copper rose in London, narrowing the first weekly decline in three weeks.
-- Copper rose $9.50, or 0.1 percent, to $9,949.50 a metric ton by 7:56 a.m. on the London Metal Exchange. Relative
Strength Index 61.
-- Aluminum dropped 0.1 percent to $2,535 a ton. RSI 59.
-- Zinc declined 0.4 percent to $2,438 a ton. RSI 53.
-- Lead decreased 0.1 percent to $2,507 a ton. RSI 49.
-- Nickel climbed 0.6 percent to $28,024 a ton. RSI 67.
-- Tin was down 0.1 percent at $31,451 a ton. RSI 84.
Other markets: Last % Change % YTD
U.S. Dollar Index 78.39 0.2 -0.8
Crude oil $87.34 0.7 -4.4
Gold $1,363.43 0.0 -4.0
MSCI World Index 1,335.66 -0.2 4.3
Economic Events:
Forecast Prior Time
(London)
U.S. Trade Balance -$40.5B -$38.3B 13:30
U.S. U. Of Michigan Confidence 75 74.2 14:55
18.58
Copper Future Prices Rose on Rising Demand
Written By mine on Jumat, 04 Februari 2011 | 18.58
Copper futures for March delivery rose 6.45 cents, or 1.4 percent, to $4.609 a pound at 10:06 a.m. on the Comex in New York. Earlier, the price reached a record $4.613.
The global supply deficit will reach 822,000 metric tons in 2011, more than double last year?s shortfall, Barclays Capital said on Jan. 20. JPMorgan Securities Ltd. and Macquarie Bank Ltd. also predicted a deficit, and Australia & New Zealand Banking Group Ltd. and Morgan Stanley have boosted their price forecasts.
Copper extended a rally to a record on mounting concern that the global economic recovery will boost consumption of the metal used in cars, homes and appliances while mining companies struggle to increase production.
Freeport McMoRan Copper & Gold Inc., the world?s largest publicly traded copper miner, said the market will be ?tight in 2011, and for the foreseeable future.? The metal has more than tripled since 2008 on rising demand from China, the world?s largest buyer. In the U.S., the second-biggest user, unemployment fell in January to the lowest level since April 2009, the Labor Department said today.
?Demand for copper continues to be robust and growing,? said James Dailey, who manages $185 million at TEAM Financial Asset Management LLC in Harrisburg, Pennsylvania. ?Bringing copper production online is very costly and protracted, so it may be some time before production levels are able to grow fast enough to offset the growth in demand.?
China Demand
?We have continuing strong demand out of China and the prospects of continued recovery in the U.S. and in parts of Europe,? Kathleen Quirk, Freeport?s chief financial officer, said yesterday in a telephone interview from Phoenix. ?That is also overlaid on a situation where supply is very limited. Our industry hasn?t been able to expand capacity fast enough to meet the demand.?
Copper for three-month delivery added $152.25, or 1.5 percent, to $10,082.25 a ton ($4.57 a pound) on the London Metal Exchange. Earlier, the metal climbed to $10,095, the highest ever.
Also in London, tin climbed 2 percent to $31,150 a ton after reaching a record $31,199. Before today, prices were up 14 percent this year. PT Timah, the biggest supplier of the metal, said on Jan. 14 its production may drop for a fourth straight year in 2011.
The global supply deficit will reach 822,000 metric tons in 2011, more than double last year?s shortfall, Barclays Capital said on Jan. 20. JPMorgan Securities Ltd. and Macquarie Bank Ltd. also predicted a deficit, and Australia & New Zealand Banking Group Ltd. and Morgan Stanley have boosted their price forecasts.
Copper extended a rally to a record on mounting concern that the global economic recovery will boost consumption of the metal used in cars, homes and appliances while mining companies struggle to increase production.
Freeport McMoRan Copper & Gold Inc., the world?s largest publicly traded copper miner, said the market will be ?tight in 2011, and for the foreseeable future.? The metal has more than tripled since 2008 on rising demand from China, the world?s largest buyer. In the U.S., the second-biggest user, unemployment fell in January to the lowest level since April 2009, the Labor Department said today.
?Demand for copper continues to be robust and growing,? said James Dailey, who manages $185 million at TEAM Financial Asset Management LLC in Harrisburg, Pennsylvania. ?Bringing copper production online is very costly and protracted, so it may be some time before production levels are able to grow fast enough to offset the growth in demand.?
China Demand
?We have continuing strong demand out of China and the prospects of continued recovery in the U.S. and in parts of Europe,? Kathleen Quirk, Freeport?s chief financial officer, said yesterday in a telephone interview from Phoenix. ?That is also overlaid on a situation where supply is very limited. Our industry hasn?t been able to expand capacity fast enough to meet the demand.?
Copper for three-month delivery added $152.25, or 1.5 percent, to $10,082.25 a ton ($4.57 a pound) on the London Metal Exchange. Earlier, the metal climbed to $10,095, the highest ever.
Also in London, tin climbed 2 percent to $31,150 a ton after reaching a record $31,199. Before today, prices were up 14 percent this year. PT Timah, the biggest supplier of the metal, said on Jan. 14 its production may drop for a fourth straight year in 2011.
16.50
Canada Stock TSX Open Litle and Higher by Mining Shares and Mixed Commodities
Written By mine on Jumat, 17 Desember 2010 | 16.50
Canada main stock index in Toronto can open little changed on Monday as copper and oil prices and increased Gold slipped on a day when U.S. markets will remain closed for Independence Day.
The Toronto Stock Exchange S & P / TSX composite index . GSPTSE lost 4.4 percent last week, hitting the lowest in more than four months as resource issues, particularly gold miners, stumbled heavily.
OIL slightly higher
U.S. crude oil climbed above $ 72 a barrel on Monday,
breakage of a five-day losing streak, but gains were limited due
concerns that slowing growth in the global economy could reduce demand.
[O / R] [ID: nSGE66405P]
COPPER rises
Copper prices rose on the back of the weak U.S. dollar and
Buy arbitration in Shanghai. [MET / L]
Gold Prices Dip
Gold prices lower sharp edges below $ 1,210 per ounce at
Monday as risk aversion that drove prices to record highs
last month declined with caution during the American Revolutionary War
Day holiday also keep a lid on profits. [GOL /]
Sino-Forest SIGNS FINANCING DEAL
Forest plantation operator Sino Forest Corp. (TRE.TO: Quote) said:
Monday at the Sino-Panel Investments Ltd. unit has entered
a financing agreement for up to 10 billion RMB ($ 1.5 billion)
with China Development Bank Corp. for projects in China.
[ID: nSGE6610KA]
VALE Deal reached in Sudbury
Vale (VALE5.SA: Quote) said on Sunday reached a preliminary
contract agreement with workers at the Sudbury, Ontario, nickel
and copper mining operation, signaling the end of a bitter,
year-long strike. [ID: nN04213666]
NORD RESOURCES fired
Nord Resources Corp said on Monday it was NRD.TO
temporary suspension of mining and crushing of ore in the
Johnson Camp Mine and was laying off 43 people on the copper
mine for cost reduction purposes.
Canadian dollar slips
The Canadian dollar fell against its U.S. counterpart on
Monday morning, as investor demand disappeared in favor of the euro.
[ID: nN05235183]
RESEARCH ROUNDUP
Following is a summary of research actions on Canadian
companies reported by Reuters. [RCH / CA]
* Raymond James cuts Cervus Equipment (CVL.V: Quote) target
to EUR 13 from EUR 14, outperform rating
* Raymond James cuts Rocky Mountain dealers (RME.TO: Quote)
target price to C $ 10.50 C $ 13; outperform rating
* CIBC does Angle Energy (NGL.TO: Quote) price target from C $ 10.25
C $ 9.50, rating outperform
Taseko Mines Ltd. * Paradigm cuts (TKO.TO: Quote) price target to
C $ 6.50 from $ 7.75 C; buy rating
($ 1 = $ 1.07 Canadian)
The main stock index could increase Toronto?s opening on Thursday, led by mining shares after China reported a rise in exports, raising the demand outlook. Data released on Thursday morning provided a mixed reading on the Canadian economy. Canada posted a smaller than excepted trade surplus in April as the value of both exports and imports fell. Statistics Canada also reported that new home in Canada, prices rose for the 10th consecutive Mon
Stocks rose in Europe after the European Central Bank and the Bank of England kept their key interest rates unchanged, as widely expected, and as the head of the national pension fund of China said that the euro, Europe?s debt crisis again.
Here?s some news that could affect share prices:
OIL UP
Oil climbed above $ 74 a barrel Thursday after data showed an increase in Chinese exports in May and as the IEA revised upwards estimates of global oil demand growth this year. [O / R]
COPPER steady
Copper stabilized on Thursday, supported by a stronger euro and equity markets, while a decline in copper imports from China, the world?s largest consumer capped further gains. [MET / L]
GOLD DIPS
Gold eased below $ 1,225 an ounce in Europe on Thursday as equity markets rose and the euro climbed against the dollar resulting from increased appetite for assets considered a higher risk at the expense of precious metal?s. [GOL /]
LULU LEMON PROFIT jumps
Lulu Lemon Athletica Inc. (LLL.TO) (LULU.O) said on Thursday its fiscal first-quarter profit more than tripled as demand for yoga and workout wear increased significantly. [ID: nN10186339]
TRANSAT PROFIT DROPS
Transat AT Inc. (TRZb.TO) on Thursday reported a 85 percent drop in quarterly profit as lower selling prices and the strengthening Canadian dollar hurt the leisure travel company. [ID: nSGE6590GK]
DOLLARAMA PROFIT doubles
Dollarama Inc?s (DOL.TO) quarterly earnings more than doubled on Thursday, helped by the addition of new stores. [ID: nSGE6590GI]
ARC Energy to BUY STORM EXPLORATION
ARC Energy Trust (AET_u.TO) on Thursday said it agreed to pay about C $ 680,000,000 ($ 652,000,000) to acquire Storm Exploration Inc. (SEO.TO), what assets near Dawson ARC?s field, identified as the lowest cost unconventional gas play in Canada. [ID: nSGE65904D]
RESEARCH ROUNDUP
Following is a summary of research actions on Canadian companies reported by Reuters. [RCH / CA]
Note: All values in RESEARCH ROUNDUP in Canadian dollars, unless otherwise indicated.
* Grif Interactive Media (MDF.TO) increased to $ 9.70 from $ 8; rating buy Acumen Capital
* ADF Group Inc. (DRX.TO) reduced to $ 3 to $ 3.50, to outperform rating at Raymond James
* Forzani Group (FGL.TO) increased to $ 20 from $ 19, rated outperform at RBC
* Kirkland Lake Gold Inc. (KGI.TO) started to market perform rating, price target $ 9 at Raymond James
* Le Chateau Inc. (CTUa.TO) reduced to $ 17 from $ 18; rating to buy from Versant
* Viterra Inc. (VT.TO) raised to outperform the market by BMO ($ 1 = $ 1043 Canadian run).
canadian oil company in namibia, copper price target 2011, target price commodities, the toronto stock exchange, toronto gold 33 ounch rate, toronto price of silver per ounce, toronto stock exchange gold copper, africa oil namibia oil stocks, tse stock target prices, tsx quotes canadian mining co, lulu lemon news, mongolia oil play, copper mine sells canada export china, mongolian oil plays, find me a new company stock share in tsx, mongolian mining share price, lulu lemon tsx, bp tsx, lulu lemon stocks, lulu lemon on the tsx.
Canadian Bank BMO Financial Group says it agreed to buy Marshall & Ilsley Corp. for $4.1 billion in stock in an effort to expand its North American business. Under terms of the deal, each share of Marshall & Ilsley, based in Milwaukee, Wis., will be exchanged for 0.1257 of BMO Financial shares. BMO plans to raise an additional $800 million Canadian dollars ($795 million) in equity before the deal closes.
BMO says the deal will help its earnings in 2013, excluding one-time acquisition costs of CA$540 million ($536 million).
BMO, based in Toronto, is buying Marshall & Ilsley's Troubled Asset Relief Program preferred shares and will repay them in full before the acquisition closes. The deal is expected to close by July 31.
The Toronto Stock Exchange S & P / TSX composite index . GSPTSE lost 4.4 percent last week, hitting the lowest in more than four months as resource issues, particularly gold miners, stumbled heavily.
OIL slightly higher
U.S. crude oil climbed above $ 72 a barrel on Monday,
breakage of a five-day losing streak, but gains were limited due
concerns that slowing growth in the global economy could reduce demand.
[O / R] [ID: nSGE66405P]
COPPER rises
Copper prices rose on the back of the weak U.S. dollar and
Buy arbitration in Shanghai. [MET / L]
Gold Prices Dip
Gold prices lower sharp edges below $ 1,210 per ounce at
Monday as risk aversion that drove prices to record highs
last month declined with caution during the American Revolutionary War
Day holiday also keep a lid on profits. [GOL /]
Sino-Forest SIGNS FINANCING DEAL
Forest plantation operator Sino Forest Corp. (TRE.TO: Quote) said:
Monday at the Sino-Panel Investments Ltd. unit has entered
a financing agreement for up to 10 billion RMB ($ 1.5 billion)
with China Development Bank Corp. for projects in China.
[ID: nSGE6610KA]
VALE Deal reached in Sudbury
Vale (VALE5.SA: Quote) said on Sunday reached a preliminary
contract agreement with workers at the Sudbury, Ontario, nickel
and copper mining operation, signaling the end of a bitter,
year-long strike. [ID: nN04213666]
NORD RESOURCES fired
Nord Resources Corp said on Monday it was NRD.TO
temporary suspension of mining and crushing of ore in the
Johnson Camp Mine and was laying off 43 people on the copper
mine for cost reduction purposes.
Canadian dollar slips
The Canadian dollar fell against its U.S. counterpart on
Monday morning, as investor demand disappeared in favor of the euro.
[ID: nN05235183]
RESEARCH ROUNDUP
Following is a summary of research actions on Canadian
companies reported by Reuters. [RCH / CA]
* Raymond James cuts Cervus Equipment (CVL.V: Quote) target
to EUR 13 from EUR 14, outperform rating
* Raymond James cuts Rocky Mountain dealers (RME.TO: Quote)
target price to C $ 10.50 C $ 13; outperform rating
* CIBC does Angle Energy (NGL.TO: Quote) price target from C $ 10.25
C $ 9.50, rating outperform
Taseko Mines Ltd. * Paradigm cuts (TKO.TO: Quote) price target to
C $ 6.50 from $ 7.75 C; buy rating
($ 1 = $ 1.07 Canadian)
The main stock index could increase Toronto?s opening on Thursday, led by mining shares after China reported a rise in exports, raising the demand outlook. Data released on Thursday morning provided a mixed reading on the Canadian economy. Canada posted a smaller than excepted trade surplus in April as the value of both exports and imports fell. Statistics Canada also reported that new home in Canada, prices rose for the 10th consecutive Mon
Stocks rose in Europe after the European Central Bank and the Bank of England kept their key interest rates unchanged, as widely expected, and as the head of the national pension fund of China said that the euro, Europe?s debt crisis again.
Here?s some news that could affect share prices:
OIL UP
Oil climbed above $ 74 a barrel Thursday after data showed an increase in Chinese exports in May and as the IEA revised upwards estimates of global oil demand growth this year. [O / R]
COPPER steady
Copper stabilized on Thursday, supported by a stronger euro and equity markets, while a decline in copper imports from China, the world?s largest consumer capped further gains. [MET / L]
GOLD DIPS
Gold eased below $ 1,225 an ounce in Europe on Thursday as equity markets rose and the euro climbed against the dollar resulting from increased appetite for assets considered a higher risk at the expense of precious metal?s. [GOL /]
LULU LEMON PROFIT jumps
Lulu Lemon Athletica Inc. (LLL.TO) (LULU.O) said on Thursday its fiscal first-quarter profit more than tripled as demand for yoga and workout wear increased significantly. [ID: nN10186339]
TRANSAT PROFIT DROPS
Transat AT Inc. (TRZb.TO) on Thursday reported a 85 percent drop in quarterly profit as lower selling prices and the strengthening Canadian dollar hurt the leisure travel company. [ID: nSGE6590GK]
DOLLARAMA PROFIT doubles
Dollarama Inc?s (DOL.TO) quarterly earnings more than doubled on Thursday, helped by the addition of new stores. [ID: nSGE6590GI]
ARC Energy to BUY STORM EXPLORATION
ARC Energy Trust (AET_u.TO) on Thursday said it agreed to pay about C $ 680,000,000 ($ 652,000,000) to acquire Storm Exploration Inc. (SEO.TO), what assets near Dawson ARC?s field, identified as the lowest cost unconventional gas play in Canada. [ID: nSGE65904D]
RESEARCH ROUNDUP
Following is a summary of research actions on Canadian companies reported by Reuters. [RCH / CA]
Note: All values in RESEARCH ROUNDUP in Canadian dollars, unless otherwise indicated.
* Grif Interactive Media (MDF.TO) increased to $ 9.70 from $ 8; rating buy Acumen Capital
* ADF Group Inc. (DRX.TO) reduced to $ 3 to $ 3.50, to outperform rating at Raymond James
* Forzani Group (FGL.TO) increased to $ 20 from $ 19, rated outperform at RBC
* Kirkland Lake Gold Inc. (KGI.TO) started to market perform rating, price target $ 9 at Raymond James
* Le Chateau Inc. (CTUa.TO) reduced to $ 17 from $ 18; rating to buy from Versant
* Viterra Inc. (VT.TO) raised to outperform the market by BMO ($ 1 = $ 1043 Canadian run).
canadian oil company in namibia, copper price target 2011, target price commodities, the toronto stock exchange, toronto gold 33 ounch rate, toronto price of silver per ounce, toronto stock exchange gold copper, africa oil namibia oil stocks, tse stock target prices, tsx quotes canadian mining co, lulu lemon news, mongolia oil play, copper mine sells canada export china, mongolian oil plays, find me a new company stock share in tsx, mongolian mining share price, lulu lemon tsx, bp tsx, lulu lemon stocks, lulu lemon on the tsx.
Canadian Bank BMO Financial Group says it agreed to buy Marshall & Ilsley Corp. for $4.1 billion in stock in an effort to expand its North American business. Under terms of the deal, each share of Marshall & Ilsley, based in Milwaukee, Wis., will be exchanged for 0.1257 of BMO Financial shares. BMO plans to raise an additional $800 million Canadian dollars ($795 million) in equity before the deal closes.
BMO says the deal will help its earnings in 2013, excluding one-time acquisition costs of CA$540 million ($536 million).
BMO, based in Toronto, is buying Marshall & Ilsley's Troubled Asset Relief Program preferred shares and will repay them in full before the acquisition closes. The deal is expected to close by July 31.
11.45
Copper Prices Extends Rally to 27-Month High in New York Global Supply Concern
Written By mine on Selasa, 26 Oktober 2010 | 11.45
Copper prices rose in New York, extending a rally to a 27-month high, on signs that global demand will outpace supplies.
Inventories monitored by the London Metal Exchange have dropped to the lowest level in a year amid analyst forecasts for a global shortfall this year and next. Copper has gained 6 percent this month, partly because of the dollar?s decline. The greenback rebounded today against a basket of currencies.
?Copper, being an industrial metal, is exhibiting more strength than the rest of the commodity complex, even with a stronger dollar,? said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. ?There?s still a lot of pent-up demand for copper.?
Copper futures for December delivery rose 0.6 cent, or 0.2 percent, to settle at $3.869 a pound at 1:41 p.m. on the Comex in New York. Earlier, the metal reached $3.893, the highest level for a most-active contract since July 2008.
The Conference Board said today that its U.S. consumer- confidence index increased to 50.2 in October from a revised 48.6, a seven-month low, in September. That topped estimates by analysts.
?With consumer confidence on the uptick and a barometer for economic health, an industrial metal like copper is going to benefit,? said Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago.
Copper for delivery in three months dropped $8 to $8,510 a metric ton ($3.86 a pound) on the LME.
Nickel and tin also fell in London. Lead, zinc and aluminum gained.[http://www.bloomberg.com]
Inventories monitored by the London Metal Exchange have dropped to the lowest level in a year amid analyst forecasts for a global shortfall this year and next. Copper has gained 6 percent this month, partly because of the dollar?s decline. The greenback rebounded today against a basket of currencies.
?Copper, being an industrial metal, is exhibiting more strength than the rest of the commodity complex, even with a stronger dollar,? said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. ?There?s still a lot of pent-up demand for copper.?
Copper futures for December delivery rose 0.6 cent, or 0.2 percent, to settle at $3.869 a pound at 1:41 p.m. on the Comex in New York. Earlier, the metal reached $3.893, the highest level for a most-active contract since July 2008.
The Conference Board said today that its U.S. consumer- confidence index increased to 50.2 in October from a revised 48.6, a seven-month low, in September. That topped estimates by analysts.
?With consumer confidence on the uptick and a barometer for economic health, an industrial metal like copper is going to benefit,? said Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago.
Copper for delivery in three months dropped $8 to $8,510 a metric ton ($3.86 a pound) on the LME.
Nickel and tin also fell in London. Lead, zinc and aluminum gained.[http://www.bloomberg.com]
06.40
Copper Rise in New York and London as Speculation Federal Policy
Written By mine on Senin, 11 Oktober 2010 | 06.40
Copper may rise in New York and London as speculation that Federal Reserve officials will this week signal their readiness to buy more government debt to support economic growth weighs on the dollar.
The U.S. currency traded near an eight-month low against the euro and touched a 15-year low versus the yen before tomorrow?s release of minutes from the Fed?s Sept. 21 policy meeting. A weaker dollar makes metals priced in the currency cheaper in terms of other monies and fuels demand for raw materials as an alternative investment.
?The rising supply of dollars in the system will increase demand for hard assets like commodities and precious metals as a store of value,? said Prasad Patkar, who helps manage about $1.8 billion at Platypus Asset Management in Sydney.
Copper for delivery in December rose 1.25 cents, or 0.3 percent, to $3.787 a pound at 8:10 a.m. on the Comex in New York. Prices touched $3.82, the highest level since July 8, 2008. Copper for delivery in three months added 0.1 percent to $8,317 a metric ton on the London Metal Exchange.
Fed speculation intensified on Oct. 8 as government figures showed that U.S. payrolls fell by 95,000 workers in September, more than the drop of 5,000 estimated by analysts surveyed by Bloomberg. The Dow Jones Industrial Average of U.S. equities closed above 11,000 points.
IMF Meeting
Exchange rates dominated the International Monetary Fund?s annual meeting in Washington amid concern that nations are relying on cheaper currencies to aid growth, risking trade wars. China was accused of undervaluing the yuan, while low interest rates in the U.S. and other rich nations were blamed for flooding emerging markets with capital.
?We expect further gains in base-metal prices, especially copper and tin, as the outcome from the recent IMF meeting and last week?s U.S. jobless-claims number confirm the market?s expectations of renewed quantitative easing in the U.S. and Japan,? Hussein Allidina, head of commodities research at Morgan Stanley in New York, said in a report today.
Hedge funds raised bullish bets on copper futures to the highest level since Feb. 1, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 24,399 contracts on the Comex in the week ended Oct. 5, the commission said in its Commitments of Traders report on Oct. 8. Net-long positions rose by 2,237 contracts, or 10 percent from a week earlier.
Exchange-Traded Funds
ETF Securities Ltd., manager of $22 billion in assets, said it?s preparing to introduce exchange-traded commodities funds backed by copper, aluminum, nickel, lead, zinc and tin. No date has been set for trading to start, spokeswoman Noreen Shah said.
?The big question on everyone?s lips is whether there will be an official exchange-traded fund launch announcement this week in one of the metals,? RBC Capital Markets said in a report today.
Aluminum is most likely to be the first industrial metal to trade via an ETF, while tin is least likely to back a product because it has the smallest inventories, according to a Bloomberg survey of analysts.
LME copper stockpiles rose 0.1 percent today to 372,475 tons, daily exchange figures showed. They fell last week for a 33rd week in a row. Copper stockpiles in Shanghai rose by the most in almost six months, the Shanghai Futures Exchange said Oct. 8.
Orders to draw copper from LME stocks, or canceled warrants, rose 11 percent to 25,300 tons. They have surged 55 percent in three sessions.
Tin for three-month delivery on the LME fell 0.4 percent to $26,250 a ton. Prices touched a record $26,790 on Oct. 6. The metal has jumped 55 percent this year, leading advances on the LME, after production was disrupted in Indonesia and the Democratic Republic of the Congo.
Nickel climbed 0.3 percent to $24,475 a ton, while aluminum gained 0.1 percent to $2,423 a ton. Lead added 1.2 percent to $2,300 a ton and zinc rose 1.8 percent to $2,331 a ton.[bloomberg.com]
?
The U.S. currency traded near an eight-month low against the euro and touched a 15-year low versus the yen before tomorrow?s release of minutes from the Fed?s Sept. 21 policy meeting. A weaker dollar makes metals priced in the currency cheaper in terms of other monies and fuels demand for raw materials as an alternative investment.
?The rising supply of dollars in the system will increase demand for hard assets like commodities and precious metals as a store of value,? said Prasad Patkar, who helps manage about $1.8 billion at Platypus Asset Management in Sydney.
Copper for delivery in December rose 1.25 cents, or 0.3 percent, to $3.787 a pound at 8:10 a.m. on the Comex in New York. Prices touched $3.82, the highest level since July 8, 2008. Copper for delivery in three months added 0.1 percent to $8,317 a metric ton on the London Metal Exchange.
Fed speculation intensified on Oct. 8 as government figures showed that U.S. payrolls fell by 95,000 workers in September, more than the drop of 5,000 estimated by analysts surveyed by Bloomberg. The Dow Jones Industrial Average of U.S. equities closed above 11,000 points.
IMF Meeting
Exchange rates dominated the International Monetary Fund?s annual meeting in Washington amid concern that nations are relying on cheaper currencies to aid growth, risking trade wars. China was accused of undervaluing the yuan, while low interest rates in the U.S. and other rich nations were blamed for flooding emerging markets with capital.
?We expect further gains in base-metal prices, especially copper and tin, as the outcome from the recent IMF meeting and last week?s U.S. jobless-claims number confirm the market?s expectations of renewed quantitative easing in the U.S. and Japan,? Hussein Allidina, head of commodities research at Morgan Stanley in New York, said in a report today.
Hedge funds raised bullish bets on copper futures to the highest level since Feb. 1, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 24,399 contracts on the Comex in the week ended Oct. 5, the commission said in its Commitments of Traders report on Oct. 8. Net-long positions rose by 2,237 contracts, or 10 percent from a week earlier.
Exchange-Traded Funds
ETF Securities Ltd., manager of $22 billion in assets, said it?s preparing to introduce exchange-traded commodities funds backed by copper, aluminum, nickel, lead, zinc and tin. No date has been set for trading to start, spokeswoman Noreen Shah said.
?The big question on everyone?s lips is whether there will be an official exchange-traded fund launch announcement this week in one of the metals,? RBC Capital Markets said in a report today.
Aluminum is most likely to be the first industrial metal to trade via an ETF, while tin is least likely to back a product because it has the smallest inventories, according to a Bloomberg survey of analysts.
LME copper stockpiles rose 0.1 percent today to 372,475 tons, daily exchange figures showed. They fell last week for a 33rd week in a row. Copper stockpiles in Shanghai rose by the most in almost six months, the Shanghai Futures Exchange said Oct. 8.
Orders to draw copper from LME stocks, or canceled warrants, rose 11 percent to 25,300 tons. They have surged 55 percent in three sessions.
Tin for three-month delivery on the LME fell 0.4 percent to $26,250 a ton. Prices touched a record $26,790 on Oct. 6. The metal has jumped 55 percent this year, leading advances on the LME, after production was disrupted in Indonesia and the Democratic Republic of the Congo.
Nickel climbed 0.3 percent to $24,475 a ton, while aluminum gained 0.1 percent to $2,423 a ton. Lead added 1.2 percent to $2,300 a ton and zinc rose 1.8 percent to $2,331 a ton.[bloomberg.com]
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01.27
New History Copper Prices on Dollar Rally Commodity Demand
Written By mine on Kamis, 07 Oktober 2010 | 01.27
Copper prices rally as commodity demand, Morgan Stanley boosted its 2011 price forecasts for gold and copper, and recommended equities including Xstrata Plc and Kazakhmys Plc, because of expected supply constraints and a weak dollar.
?Accelerating weakness in the U.S. currency, driven by fears of renewed quantitative easing to confront sluggish U.S. growth, is proving to be a boon to commodity markets,? Morgan Stanley metals and mining analysts led by Peter Richardson said. Gains will be supported by ?resilient growth in emerging markets,? they said.
Gold prices are expected to average $1,315 an ounce, 14 percent higher than Morgan Stanley?s previous forecast, and copper $3.80 a pound, up 10 percent. Iron-ore prices are set to trade next year at $135 a ton, unchanged on the bank?s previous forecast, and up from an average $122 a ton for this year.
?Despite some persistent market concerns about the strength of demand for steel-making raw materials in 2011-12, and fears regarding the growth in new capacity over this timeframe, especially in iron ore, our fundamental analysis highlights continued strength in premium products,? Morgan Stanley said.
Seaborne markets will struggle to provide sufficient supply to match anticipated growth in steel production, at least until 2012, it said.
Other companies Morgan Stanley favored were Kobe Steel Ltd., Impala Platinum Holdings Ltd., Tata Steel Ltd., Posco and Fortescue Metals Group Ltd.
Copper prices fell the most in three weeks as the dollar rebounded, reducing the appeal of commodities as alternative investments.
The greenback rose as much as 0.6 percent against a basket of six major currencies. Copper has gained 27 percent since July 1 as inventories dropped and the dollar slumped. On Oct. 1, the metal reached $3.722 a pound in New York, the highest level since July 30, 2008.
?Copper is floating a little on the stronger dollar,? said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago. ?We?re seeing some technical profit- taking.?
Copper futures for December delivery slid 2.65 cents, or 0.7 percent, to close at $3.664 a pound at 1:20 p.m. on the Comex, the biggest loss for a most-active contract since Sept. 10.
Stockpiles monitored by the London Metal Exchange rose for the first time in six sessions. Orders to withdraw copper from inventories slid for the ninth straight session, the longest slump since May 11.
The metal may resume its rally, reaching $3.80 in eight to 10 days, McGhee said. Demand in China, the world?s largest consumer, is ?underpinning the market,? he said.
In London, copper for delivery in three months dropped $36, or 0.4 percent, to $8,064 a metric ton ($3.66 a pound).
Lead also fell on the LME. Aluminum, nickel and tin rose, while zinc was little changed.
Copper dropped for a second day as as Japan expanded stimulus measures, weakening the dollar, and on concern that the European debt crisis will be prolonged. Tin traded within 1.2 percent of an all-time high.
Copper for three-month delivery on the London Metal Exchange fell as much as 0.5 percent to $8,022 a metric ton and traded at $8,030 at 3:19 p.m. in Singapore. The December delivery contract on the Comex in New York lost as much as 0.5 percent to $3.646 a pound. The Shanghai Futures Exchange is closed till Oct. 7 for the National Day holiday.
Copper fell as ?a stronger U.S. dollar and concerns that Europe?s major banks are undercapitalized resurfaced,? Mark Pervan, senior commodity strategist at Australia and New Zealand Banking Group Ltd., wrote in a note today.
The dollar strengthened for a second day against a six- currency basket including the yen, before trading little changed. The Bank of Japan cut the overnight call rate target, reducing borrowing costs for the first time since 2008, and policy makers plan to set up a 5 trillion yen ($60 billion) fund to buy state bonds and other assets. A panel appointed by the Swiss government said yesterday that UBS AG and Credit Suisse Group AG should almost double the capital required under Basel III rules.
The economies of Europe, Japan and the U.K. will have trouble picking up, according to Pacific Investment Management Co., which runs the world?s biggest mutual fund. The Federal Reserve will probably increase Treasury purchases to revive a U.S. economy that is almost stalled, Paul McCulley, a portfolio investor at Pimco, wrote on the company?s website.
Cancelled Trades
Aluminum in London fell 1 percent to $2,340 a ton at 3:16 p.m. in Singapore. The London Metal Exchange canceled 220 lots of the three-month contract traded just after the open of its Select electronic trading system at 8 a.m. Singapore time, the bourse?s help desk said by phone. The metal tumbled as much as 3.3 percent from the previous settlement to $2,286 a ton during that 21 second period after the open.
Zinc dropped 0.4 percent to $2,220.75 a ton, lead was 0.6 percent lower at $2,263.25 a ton, and nickel declined 1.2 percent to $23,848 a ton. Tin was unchanged at $25,200 a ton, just $300 off the record $25,500, which was reached May 15, 2008.
?Accelerating weakness in the U.S. currency, driven by fears of renewed quantitative easing to confront sluggish U.S. growth, is proving to be a boon to commodity markets,? Morgan Stanley metals and mining analysts led by Peter Richardson said. Gains will be supported by ?resilient growth in emerging markets,? they said.
Gold prices are expected to average $1,315 an ounce, 14 percent higher than Morgan Stanley?s previous forecast, and copper $3.80 a pound, up 10 percent. Iron-ore prices are set to trade next year at $135 a ton, unchanged on the bank?s previous forecast, and up from an average $122 a ton for this year.
?Despite some persistent market concerns about the strength of demand for steel-making raw materials in 2011-12, and fears regarding the growth in new capacity over this timeframe, especially in iron ore, our fundamental analysis highlights continued strength in premium products,? Morgan Stanley said.
Seaborne markets will struggle to provide sufficient supply to match anticipated growth in steel production, at least until 2012, it said.
Other companies Morgan Stanley favored were Kobe Steel Ltd., Impala Platinum Holdings Ltd., Tata Steel Ltd., Posco and Fortescue Metals Group Ltd.
Copper prices fell the most in three weeks as the dollar rebounded, reducing the appeal of commodities as alternative investments.
The greenback rose as much as 0.6 percent against a basket of six major currencies. Copper has gained 27 percent since July 1 as inventories dropped and the dollar slumped. On Oct. 1, the metal reached $3.722 a pound in New York, the highest level since July 30, 2008.
?Copper is floating a little on the stronger dollar,? said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago. ?We?re seeing some technical profit- taking.?
Copper futures for December delivery slid 2.65 cents, or 0.7 percent, to close at $3.664 a pound at 1:20 p.m. on the Comex, the biggest loss for a most-active contract since Sept. 10.
Stockpiles monitored by the London Metal Exchange rose for the first time in six sessions. Orders to withdraw copper from inventories slid for the ninth straight session, the longest slump since May 11.
The metal may resume its rally, reaching $3.80 in eight to 10 days, McGhee said. Demand in China, the world?s largest consumer, is ?underpinning the market,? he said.
In London, copper for delivery in three months dropped $36, or 0.4 percent, to $8,064 a metric ton ($3.66 a pound).
Lead also fell on the LME. Aluminum, nickel and tin rose, while zinc was little changed.
Copper dropped for a second day as as Japan expanded stimulus measures, weakening the dollar, and on concern that the European debt crisis will be prolonged. Tin traded within 1.2 percent of an all-time high.
Copper for three-month delivery on the London Metal Exchange fell as much as 0.5 percent to $8,022 a metric ton and traded at $8,030 at 3:19 p.m. in Singapore. The December delivery contract on the Comex in New York lost as much as 0.5 percent to $3.646 a pound. The Shanghai Futures Exchange is closed till Oct. 7 for the National Day holiday.
Copper fell as ?a stronger U.S. dollar and concerns that Europe?s major banks are undercapitalized resurfaced,? Mark Pervan, senior commodity strategist at Australia and New Zealand Banking Group Ltd., wrote in a note today.
The dollar strengthened for a second day against a six- currency basket including the yen, before trading little changed. The Bank of Japan cut the overnight call rate target, reducing borrowing costs for the first time since 2008, and policy makers plan to set up a 5 trillion yen ($60 billion) fund to buy state bonds and other assets. A panel appointed by the Swiss government said yesterday that UBS AG and Credit Suisse Group AG should almost double the capital required under Basel III rules.
The economies of Europe, Japan and the U.K. will have trouble picking up, according to Pacific Investment Management Co., which runs the world?s biggest mutual fund. The Federal Reserve will probably increase Treasury purchases to revive a U.S. economy that is almost stalled, Paul McCulley, a portfolio investor at Pimco, wrote on the company?s website.
Cancelled Trades
Aluminum in London fell 1 percent to $2,340 a ton at 3:16 p.m. in Singapore. The London Metal Exchange canceled 220 lots of the three-month contract traded just after the open of its Select electronic trading system at 8 a.m. Singapore time, the bourse?s help desk said by phone. The metal tumbled as much as 3.3 percent from the previous settlement to $2,286 a ton during that 21 second period after the open.
Zinc dropped 0.4 percent to $2,220.75 a ton, lead was 0.6 percent lower at $2,263.25 a ton, and nickel declined 1.2 percent to $23,848 a ton. Tin was unchanged at $25,200 a ton, just $300 off the record $25,500, which was reached May 15, 2008.
17.35
China Central Bank: Copper Prices Rise as Falling Inventory and Reassure
Written By mine on Sabtu, 18 September 2010 | 17.35
Prices of commodity copper rose as falling inventories and reassuring comments from China's central bank on monetary policy boosted prices. Benchmark copper for three-month delivery on the London Metal Exchange was trading at $7,774 a tonne at 1310 GMT from $7,700 at the close on Thursday. The metal used in power and construction, earlier hit $7,810, its highest level since April 26. China is the world's top commodities of metals consumer and a major reason for copper's 140 percent gains last year.
China's central bank warned of mounting bad debt as the country's structural reforms accelerate, but reaffirmed its appropriately loose monetary policy stance and said it would deploy various fiscal and monetary tools to manage inflationary expectations. ''Pretty impressive rise,'' said David Wilson, director of metals research at Societe Generale. ''The fact that the Chinese central bank put out the announcement, is probably seized upon. ''It seems to have been taken as good news if there is not tightening up, there will still be some lending it's just a sentiment issue.''
India's central bank raised interest rates more than expected, extending its fight against inflation, raising speculation that China may have to do the same. Industrial metal prices firmed briefly as the dollar softened after U.S. consumer price data, which rose slightly more than expected in August, but core prices were flat. A lower U.S. currency makes dollar-denominated metals cheaper for holders of other currencies. Stocks Slide A trend of falling LME inventories has helped support metal prices in recent months. Latest LME data showed copper stocks slipped 2,950 tonnes to 384,200 tonnes, having fallen from 6-1/2 year highs at 555,075 tonnes in mid-February.
China's central bank warned of mounting bad debt as the country's structural reforms accelerate, but reaffirmed its appropriately loose monetary policy stance and said it would deploy various fiscal and monetary tools to manage inflationary expectations. ''Pretty impressive rise,'' said David Wilson, director of metals research at Societe Generale. ''The fact that the Chinese central bank put out the announcement, is probably seized upon. ''It seems to have been taken as good news if there is not tightening up, there will still be some lending it's just a sentiment issue.''
India's central bank raised interest rates more than expected, extending its fight against inflation, raising speculation that China may have to do the same. Industrial metal prices firmed briefly as the dollar softened after U.S. consumer price data, which rose slightly more than expected in August, but core prices were flat. A lower U.S. currency makes dollar-denominated metals cheaper for holders of other currencies. Stocks Slide A trend of falling LME inventories has helped support metal prices in recent months. Latest LME data showed copper stocks slipped 2,950 tonnes to 384,200 tonnes, having fallen from 6-1/2 year highs at 555,075 tonnes in mid-February.
01.30
Copper Futures Prices Rises Supported Firm Trend
Written By mine on Jumat, 17 September 2010 | 01.30
Futures prices of copper commodity rose by Rs 1.45, or 0.41 per cent, to Rs 357.15 per kg today, supported by firming trend at the London Metal Exchange as weak dollar boosted the appeal of commodity as an alternative investment.
Copper prices for three-month delivery on the London Metal Exchange rose as much as 0.3 per cent to $7,715 a metric tonne. The LME-Index of six metals, including copper and aluminium advanced 0.8 per cent yesterday to the highest level since April 26.
Copper futures prices was mostly due to firming trend in base metals in global markets after weak dollar raised the appeal of base metals and other commodity as an alternative investment.
Multi Commodity Exchange counter, contract for November delivery shot up by Rs 1.45, or 0.41 per cent, to Rs 357.15 per kg, with a turnover of nine lots. It ended 0.35 per cent higher at Rs 355.70 per kg in the previous session. Commodities metal for delivery in February gained Rs 1.35, or 0.38 per cent at Rs 359.05 per kg, with a turnover of 11 lots.
Copper prices for three-month delivery on the London Metal Exchange rose as much as 0.3 per cent to $7,715 a metric tonne. The LME-Index of six metals, including copper and aluminium advanced 0.8 per cent yesterday to the highest level since April 26.
Copper futures prices was mostly due to firming trend in base metals in global markets after weak dollar raised the appeal of base metals and other commodity as an alternative investment.
Multi Commodity Exchange counter, contract for November delivery shot up by Rs 1.45, or 0.41 per cent, to Rs 357.15 per kg, with a turnover of nine lots. It ended 0.35 per cent higher at Rs 355.70 per kg in the previous session. Commodities metal for delivery in February gained Rs 1.35, or 0.38 per cent at Rs 359.05 per kg, with a turnover of 11 lots.
