Copper boosted by China trade data

COPPER futures closed higher on the London Metal Exchange, boosted by some solid trade data from top metals consumer China.

The LME's flagship three-month copper contract was up 1.1 per cent at US$ 6,729 a metric ton at the close.

China posted unexpected gains in both exports and imports for April, beating market estimates and adding up to a trade surplus of US$ 18.46 billion.

Its April copper, copper-products imports rose 52.5 per cent on the year to 450,000 tons.

"Chinese traders have clearly taken advantage once again of the low copper prices - the red metal dropped by 10 per cent in price for a time in March, losses that it has only partially been able to recoup in the meantime - to buy up material opportunistically," said analysts at Commerzbank AG.

China is the world's largest copper market, accounting for 40 per cent of the world's imports of the industrial metal.

Nickel at two-year high after Vale suspends Goro plant

Mining giant Vale SA (NYSE:VALE) suspended production at its New Caledonia's Goro nickel processing plant and mine due to an effluent spill,Reuters reported on Thursday.

The president of New Caledonia's Southern Province, Cynthia Ligeard, ordered Brazil's Vale, the world's second biggest nickel producer, to halt operations immediately, after an estimated 100,000 litres of effluent ended up in a creek, according to Radio New Zealand International (RNZI).

The provincial government and the environmental authority have sent a joint mission to evaluate the state of the US$6 billion plant.

Vale said in response the spill was due to a misconfiguration of the circuits transferring solution and he water quality of the creek is now back to normal.

The Goro mine had been targeting to produce about 40,000 tonnes of nickel this year, out of a total worldwide production of about two million tonnes.

Earlier this week Glencore Xstrata said output at its Koniambo mine, also in New Caledonia, had been disappointing, and that its 26,000-tonne production forecast for this year was being reviewed.

Nickel prices hit a two-year high in London Metal Exchange on Thursday morning, reaching $19,786, the biggest one-day gain in nearly four years, over supply concerns including Indonesia's ban on nickel early this year. 

According to Bloomberg Deutsche Bank analysts expect nickel to peak at $27,000 a metric ton in 2017.

Despite being one of the best-performing commodities this year, with prices rising over a third since January, nickel doesn't seem to be in the cards for diversified giant Anglo American (LON: AAL).

The miner said Thursday it is mulling the sale of its Brazilian nickel unit to Vale, the South American country’s largest miner, as part of its ongoing efforts to swing back to profit.

Newmont Mining may halt Indonesia operations

US giant Newmont Mining Corp. (NYSE: NEM) said Wednesday it expects to cease its Indonesian gold and copper operations in June due to unresolved issues over export permits.

The Indonesian government imposed an immediate 25% export tax in January for the country's copper concentrates, and it will increase to 35% on January 2015.

Newmont and Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), which account for 97 % of Indonesia's copper output combined, said the rule conflicts with contracts they signed exempting them from new taxes and duties.

The Colorado,US-based miner is currently discussing with the government to complete the process of securing an initial export permit. The company has obtained registered exporter status from the Ministry of Trade in April, necessary milestone prior to receiving the permit.

Newmont is the world's third largest gold producer, supplying roughly 30% of its Indonesian copper concentrate output to the country's only copper smelter, PT Smelting at Gresik.

"This is a very unfortunate and difficult situation for all of us, as it will disrupt the lives of our 8,000 employees and contractors and impact thousands of more people in the Sumbawa Barat area who derive their incomes from our operation,” said Martiono Hadianto, president director of PT Newmont Nusa Tenggara in the statement.

Newmont's Batu Hijau copper and gold mine on the island of Sumbawa Barat began its operations in 2000. The company had forcasted copper concentrate output for 2014 at 110,000-125,000 tonnes before the new export rules.

The company has made it clear the ban is a pressing issue, which has already affected its ratings.

Indonesia, with a population of 240 million, is the world’s premier thermal coal exporter, a nickel, bauxite and tin powerhouse and is also rich in gold and copper.

U.S. Aluminum Imports Surge in March Lured by High Physical Prices

U.S. aluminum imports jumped in March with inflows from Russia climbing to the highest in over two years, U.S. data showed on Thursday, as an unprecedented gain in physical prices at the start of the year attracted material from Russia.

Some 264,100 tonnes of aluminum landed in the United States, a net importer of the metal, in March, the highest since August last year, up 11 percent from February and 14 percent higher than a year earlier.

The data is the strongest sign yet that merchants diverted metal to the region, lured by the sudden surge in premiums in January as banks, traders and consumers were caught short of metal and had to scramble for supplies. 

Premiums are paid on top of the benchmark London Metal Exchange price for physical delivery. Due to shipping times, the March data was the first to show a significant inflow.

"The jump in the premium is probably what drove imports in the first quarter. Most logically, it would have arrived in Baltimore so they (merchants) can sell it if needed," said a U.S. trader.

Inflows from Russia, the home of UC Rusal, the world's No. 1 producer, were particularly dramatic, partially reversing a years-long decline.

Over 44,000 tonnes arrived in the month, more than double March 2013 levels and up 52 percent from February. The total exceeded long-term monthly averages and was almost three times the monthly average of 16,000 tonnes last year, according to Reuters calculations.

Canada accounted for the biggest portion of the total as has been the case for years.

In the first two weeks of the year, the Midwest premium almost doubled to record highs near 20.5 cents per lb and are still close to those levels three months later.

The data will fuel the debate over the availability of metal even as the global market faces a 5-million-tonne surplus and as the LME struggles to solve a years-long crisis over its storage policy, which end users say have led to inflated physical prices and distorted supplies. 

It is not clear if the strong shipments continued in April - some traders say the subsequent surge in premiums in Europe and Asia closed the arbitrage, potentially limiting the amount of metal headed to the United States.

Even so, consumers, merchants and banks have continued to draw on domestic supplies. Stocks in London Metal Exchange warehouses in the U.S. have slumped to 1.7 million tonnes, their lowest since June last year and down from 1.9 million in mid-January.

Traders say a portion of that may also have headed into storage outside of the exchange, rather than to end users, as part of financing deals that increase the perception of lower supplies.

BNP Paribas Sees Aluminum Creeping Toward Supply Deficit

BNP sees potential for aluminum, long thought of as an oversupplied market, to tip into a supply deficit in the second half of the year. “Aluminum is still stuck with excess production capacity as well as massive surplus inventories,” says the bank. “But strong demand and producer cuts will tip the market into deficit from H2 14, with the shortfall growing in 2015.” BNP Paribas sees world aluminum demand growing 6.5% in 2014. The output cuts expected this year are not likely to make material inroads into excess existing inventories, the bank sees a 2014 deficit of some 750,000 tons. As a result, prices on the London Metal Exchange could approach $2,000 a metric ton by the middle of 2015, BNP Paribas says. As of 10:13 a.m. EDT, three-month aluminum on the LME was trading at $1,765.75 a metric ton.

Gold Sells Off On Yellen's Upbeat Assessment Of U.S. Economy And As Putin Blinks

Some positive remarks on the U.S. economy from Fed Chair Janet Yellen helped push gold prices solidly lower Wednesday. A potential de-escalation in the Russia-Ukraine crisis also weighed on the safe-haven metal.June gold was last down $17.50 at $1,290.00 an ounce. Spot gold was last quoted down $16.70 at $1,291.75. July Comex silver last traded down $0.295 at $19.355 an ounce.

Gold prices were already trading moderately lower in morning dealings Wednesday and then extended losses in the wake of remarks from Yellen to the U.S. Congress. She said the U.S. economy and the economic outlook are generally on the upswing.

Also negative for gold Wednesday are reported comments from Russian President Vladimir Putin that indicated he wants to de-escalate the crisis in Ukraine, including possibly pulling his troops back from the Ukrainian border. Actions speak louder than words and it’s my bias that even though Putin may have seemingly “blinked” Wednesday, this situation is not going to get significantly better any time soon.

The next big economic event for the world market places comes with the European Central Bank monthly monetary policy meeting on Thursday. There is growing pressure on the ECB to implement further monetary policy stimulus measures, amid worries about price deflation in the European Union. The Euro currency is at a multi-week high against the U.S. dollar, and the strength of the common currency is also a concern to many European officials and another reason to EU interest rates.

U.S. economic data released Wednesday included preliminary productivity and costs, the global services PMI, the weekly DOE liquid energy stock report, and consumer installment credit. None of the data had much of an impact on the market place.

The London P.M. gold fixing today was $1,296.00 versus the previous P.M. fixing of $1,306.25.

Technically, June gold futures prices closed nearer the session low and scored a bearish “outside day” down on the daily bar chart Wednesday. Bulls lost their upside near-term technical momentum. Gold bears have the overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,315.80. Bears’ next near-term downside breakout price objective is closing prices below solid technical support at the April low of $1,268.40. First resistance is seen at $1,300.00 and then at $1,310.00. First support is seen at Wednesday’s low of $1,286.60 and then at $1,280.00.

July silver futures closed nearer the session low and scored a bearish “outside day” down on the daily bar chart. The bears have the solid overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $20.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $18.685. First resistance is seen at $19.50 and then at Wednesday’s high of $19.77. Next support is seen at $19.25 and then at $19.00. 

July N.Y. copper closed down 250 points at 303.20 cents Wednesday. Prices closed nearer the session low. Bulls and bears are on a level near-term technical playing field. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at the April high of 310.45 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 300.00 cents. First resistance is seen at 305.00 cents and then at Wednesday’s high of 306.20 cents. First support is seen at Wednesday’s low of 301.55 cents and then at 300.00 cents

(Kitco News) 

China April trade balance: $ 18.46bn (vs. expected $16.70bn)

Exports:  +0.9% 
expected -3.0%, 
prior was -6.6% 

Imports: +0.8 % 
expected -2.1%, 
prior was -11.3% 

Here is the data from China ... Finally.