Copper price extends rally after Chinese data, deficit surprise |
- Copper price extends rally after Chinese data, deficit surprise
- France's Areva expects uranium prices to rebound
- Colombia’s coal output recovering fast — up 33.8% in Jan-March
- Aecon wins $123m Fort Hills oil sands contract
- Germans give up on getting back their gold held in US
- HudBay’s offer for Augusta finally given the nod
| Copper price extends rally after Chinese data, deficit surprise Posted: 23 Jun 2014 04:54 PM PDT
 In New York trade on Monday September copper jumped to a high of $3.151 a pound after data out of China shows manufacturing activity at a seven-month high. It's the seventh straight day of gains for the red metal after coming dangerously close to breaching the $3.00 a pound level for the second time this year. LME copper also showed some strength climbing to $6,900 a tonne after inventories at warehouses managed by the exchange fell to a six-year low. The latest jump came after the preliminary or "flash" Chinese manufacturing purchasing managers' index (PMI) indicated that the world's second largest economy was stabilizing. China's HSBC/Markit manufacturing PMI for June rose to 50.8, up from 49.4 in May and much better than expected. A reading above 50 indicates expansionary conditions for industry. The output and new orders components picked up, even though export orders weakened, suggesting strength in domestic demand. Better than expected PMI number from the US also boosted sentiment and while the eurozone's measure of manufacturing activity fell back, at 52.8 it is still indicative of growth.
The global refined copper market swung to a surprise shortage in March and a 205,000 tonnes deficit for the first three months of the year, compared with a 206,000 tonnes surplus in the same period in 2013, preliminary data from the International Copper Study Group showed on Monday. Defying market expectations, the copper price has dug itself out of a near four-year low struck mid-March. The metal remains 6.5% down in 2014 as the market adjusts to slower growth in China which consumes more than 40% of the world's copper demand of some 21 million tonnes. Chinese copper imports tumbled 16% in May compared to the previous month, but year to date China is still importing refined copper at a record setting pace – up a whopping 34% over 2013 to 2.1 million tonnes. The better than expected import numbers out of China may be a bit misleading however, because much of Chinese copper imports are tied up in finance deals as collateral for trade credit and is not being put to industrial use. Image of Captain Copper, superhero created to teach kids about the metal, courtesy of Codelco  |
| France's Areva expects uranium prices to rebound Posted: 23 Jun 2014 12:08 PM PDT  China and other countries in Asia and elsewhere are pressing ahead with building atomic energy plants, which are fuelled by refined uranium. French nuclear engineering group Areva SA said Monday depressed uranium prices are set to rebound and that, when they do, it will happen "quite fast." Speaking on the sidelines of a conference on uranium in Vienna, the company's senior vice president, marketing, Isabelle Leboucher told Reuters there still are uncertainties, as the firm doesn't know how fast uranium demand will grow in coming years. However, the message to investors was as upbeat as clear: The short-term outlook is bad, but don't worry, a lot more uranium is going to be needed down the road, as plants are being built in China and elsewhere. RBC Capital Markets Analysts agree, but think it will be a much longer road than most. While they are forecasting a price of $31.50/lb this year and $40 for 2015, they slashed their forecasts for 2016 to 2018 to between $40 to $45/lb, amid expectations that the uranium market will be in surplus until 2021. Uranium prices have crashed since the Fukushima incident in 2011, losing a further 30% in the last year to hit new record lows a few weeks ago. Although there's no spot price for the metal, UX Consulting's most recent indicator, published June 16, came to $28.5 a pound, down 31% over the last 14 months. In May, Areva agreed to a tax breaks cut and a royalty rates hike at its uranium mines in Niger, adding the start of production at its giant new Imouraren mine would be delayed until prices improve.
The state-controlled nuclear giant is currently being investigated over the controversial 2007 purchase of a Canadian uranium miner UraMin. The probe focuses on the $2.5billion Areva's acquisition of UraMin, carried out at a height of demand for enriched uranium, which it later had to write-down. |
| Colombia’s coal output recovering fast — up 33.8% in Jan-March Posted: 23 Jun 2014 10:56 AM PDT
Colombia's coal production jumped up 33.8% to 24.6 million tonnes between January and March this year, data published by the country's National Mining Agency (ANM) reveals (in Spanish). During the period, Latin America's largest coal producer exported 97% of its output, as its second largest thermal coal producer, Drummond, was banned from shipping the fossil fuel due to its failure to have its direct-loading port facilities operational by a New Year deadline. Despite the efforts, total coal exports fell 13.1% in the quarter, dropping from 17.4 million tons in the first quarter of 2013 to 15.1 million tonnes in the same period this year. Drummond, which produces about a third of Colombia's coal, resumed exports on April 1. Mississippi-inspired plan Last month Colombia said it is planning to dredge its biggest river, Magdalena, which could boost coking coal output fivefold. According to the government agency, the project could potentially worsen a global oversupply of the steelmaking ingredient, but it will help reduce the cost of transporting commodities and other goods to the Caribbean coast by as much as 50% the actual rates. The venture is loosely modelled on a 19th Century engineering project in the Mississippi River, which helped lift the US coal industry. Some of the world's top mining companies have operations in Colombia, including Anglo American (LON:AAL) and BHP Billiton (ASX:BHP), which jointly own Cerrejon, the country's largest coal producer. |
| Aecon wins $123m Fort Hills oil sands contract Posted: 23 Jun 2014 10:50 AM PDT
 Aecon Group (TSE:ARE) said Monday it has won a $123 million mining contract from Fort Hills Energy for mine-site development at the Fort Hills oil sands project in Alberta. Aecon stock rose 4.6% on the news to $16.52. The company has 56.45 million outstanding shares with a market capitalization of $933.10 million. The Canadian construction and infrastructure provider said in a news release that work is to begin later this month and is slated for completion in the second quarter of 2016. "We are very pleased to work with Fort Hills and its operator, Suncor Energy Operating Inc.," said Teri McKibbon, Aecon's president and CEO. "Suncor is a long-time, valued client." McKibbon said the company has recently announced three important mining contracts. He described them as "a solid foundation of backlog for the mining segment as we enter the second half of the year, and further utilization of our mining fleet of equipment." Aecon provides integrated turnkey services to private and public sector clients. |
| Germans give up on getting back their gold held in US Posted: 23 Jun 2014 10:32 AM PDT On January 16, 2013 Germany's central bank, the Bundesbank, said it will ship back home all 374 tonnes it had stored with the Banque de France in Paris, as well as 300 tonnes held in Manhattan by the US Federal Reserve, by 2020. Fast forward 18 months and Buba, as the Federal Bank of Germany is often called, has only managed to bring home a paltry 37 tonnes of gold. And a mere 5 tonnes of that came from the US, the rest from Paris. The US Fed holds 45% or roughly $635 billion of the total 3,396 tonnes of gold Germany have in reserve, the world's second largest hoard. Needless to say this prompted renewed questions whether Germany's gold still exists in those Manhattan vaults or if it has been melted down, leased or even sold. Doubts about the whereabouts of Germany's gold haven't gone away but now Chancellor Angela Merkel's ruling coalition, has decided to put the matter to rest reports Bloomberg: "The Americans are taking good care of our gold," Norbert Barthle, the budget spokesman for Merkel's Christian Democratic bloc in parliament, said in an interview. "Objectively, there's absolutely no reason for mistrust." Ending talk of repatriating the world's second-biggest gold reserves removes a potential irritant in U.S.-German relations. It's also a rebuff to critics including the anti-euro Alternative for Germany party, which says all the gold should return to Frankfurt so it can't be impounded to blackmail Germany into keeping the currency union together. The change in policy in the Bundestag has been signposted with another prominent member of Merkel's Christian Democratic bloc, Juergen Hardt telling reporters in May: "It's my view that the gold reserves should be stored wherever they might be needed in an emergency." When the Bundesbank first launched the repatriation program it was billed as a "trust-building" measure for the German people after rumours that the Fed refused German officials a viewing of the bullion a couple of months earlier. Executive board member of Frankfurt-based Buba Carl-Ludwig Thiele, in February also tried to assuage German citizens about the now ex-repatriation program. Thiele said at the time the bank has "enjoyed an excellent relationship of trust with the New York Fed for many decades": "I was in New York myself in June 2012 with the colleagues responsible for managing the gold reserves and saw for myself how our money is stored in the vault there. The Americans have never stonewalled or hindered us in any way. On the contrary, their cooperation has been most constructive in every respect. Our internal audit team was present last year during the on-site removal of gold bars and closely monitored everything. The smelting process is also being monitored by independent experts." German gold is also held at The Bank of England which stores 13% in London, while the Bank of France in Paris has 11% in total and the remainder is held at the Bundesbank's headquarters in Frankfurt. In November 2011, Venezuela repatriated some 180 tonnes of gold held in vaults in London and elsewhere to store it with the Caracas central bank under orders from late President Hugo Chavez. |
| HudBay’s offer for Augusta finally given the nod Posted: 23 Jun 2014 09:25 AM PDT  Northern Santa Rita Mountains, where Rosemont copper mine is proposed. After four months of fruitless attempts to acquire fellow Canadian Augusta Resource Corp (TSX:AZC), Hudbay Minerals (TSX, NYSE:HBM) said Monday the companies have agreed to friendly terms for a sweetened all-scrip takeover offer. The revised deal is worth about $555 million, or $3.56 a share. HudBay is offering 0.315 of its shares for each Augusta share, which was the same as its initial hostile bid. But the company has also thrown in a sweetener to get a friendly deal done, offering 0.17 of a warrant for each Augusta share as well. The deal gives HudBay control over the Rosemont project in Arizona, recently threatened by the surprise appearance of a wild cat on the property, which has the potential to become the US' third largest copper mine, with seven billion pounds of reserves and resources of the red metal. In a note to clients, Laurentian Bank Securities metals and mining analyst Christopher Chang said the revised offer seemed fair, adding he did not foresee a superior offer to emerge, given Augusta's "very thorough" strategic review process, along with Rosemont's permitting overhang. "With the significant lock-up by Hudbay Minerals (16%), Augusta insiders, and key large shareholders representing approximately 50% of the company's issued and outstanding shares, we believe this transaction is likely to close as currently proposed," he said. Augusta's board, which initially rejected Hudbay's offer, qualifying it of an opportunistic "low-ball" bid, had plans to start building the Rosemont mine in the second half of this year with first production early in 2017. Rosemont has proven and probable reserves of 5.9 billion pounds of copper and 194 million pounds of molybdenum with annual production set for 243 million pounds of copper, 5.4 million pounds of moly and 2.9m ounces of silver over its 21-year life. |
| You are subscribed to email updates from MINING.com To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
0 Comment for "Copper price extends rally after Chinese data, deficit surprise"