Articles in Category: Precious Metals

Windsor/Adobe Stock

This morning in metals news: copper on the London Metal Exchange (LME) is hanging steady, zinc pulled back after hitting a two-week high and General Electric (GE) announced plans to build the world’s largest laser-based powder bed metal 3-D printer.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

No Movement for Copper

A stronger U.S. dollar put a cap on gains for LME copper, as the metal’s price didn’t show much movement Tuesday, Reuters reported.

The U.S. dollar hit a three-week high against the yen after a Federal Reserve official said inflation should rise alongside wages — “reinforcing expectations for the Fed to keep raising interest rates,” according to Reuters.

Zinc Falls After Two-Week Peak

Zinc prices have been steadily climbing of late, with the metal hitting a two-week high yesterday. That has pulled back a bit, partly as a result of questions about Chinese demand, Reuters reported.

“You’ve got some news with a bullish tone, so that’s supporting the market, but I don’t know how sustainable this will all be,” Gianclaudio Torlizzi, partner at the T-Commodity consultancy, told Reuters.

LME zinc fell by 0.4%, according to the report.

GE Makes 3-D Printer Announcement

Say hello to ATLAS.

That’s the name of the new metal 3-D printer GE announced it is building, a printer that will be the world’s largest laser-based power bed metal 3-D printer.

GE made the announcement at the Paris Air Show, according to 3D Printing Industry.

Free Download: The June 2017 MMI Report

Per 3D Printing Industry, the printer has a build volume of 1 meter cubed.

Our June MMI Report is in the books, and there’s a lot to unpack.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Out of 10 MMI sub-indexes, four posted no movement from our May MMIs. That wasn’t true for all, though, as the report shows promising signs for construction (compared with last year). Like the Construction MMI, growth in the automotive sector slowed a bit, but still performed better than at the same time last year.

In terms of policy, several things happening around the world will have macroscopic effects on these industries.

Domestically, the Trump administration’s ongoing Section 232 investigation into steel imports will have ripple effects at home and abroad (namely in the Chinese steel market).

In the U.K., the recent shocker of a parliamentary election leaves question marks regarding the way forward — is it going to be a “hard” or “soft” Brexit? Does Theresa May have the political capital to make a hard Brexit happen? It seems unlikely now, but that situation continues to develop. In terms of business and metal markets, whichever iteration of Brexit takes hold will have effects on the ways in which British companies do business with Europe.

In China, many analysts expect growth to slow in the second half of 2017 as the government aims to put the squeeze on credit growth. (Moody’s recently downgraded China’s credit rating for the first time since 1989.)

While several MMI sub-indexes did not go up or down this past month, there was still quite a bit going on in each sector. You can fill yourself in by downloading our June MMI Report, which offers all of the storylines and trends for our 10 MMI sub-indexes, presented in one convenient place.

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Kagenmi/Adobe Stock

It was a busy week in the world. On Thursday alone there were elections in the U.K. (which resulted in a hung parliament) and former FBI Director James Comey testified before the Senate Intelligence Committee.

Before we head into the weekend, let’s look back at the top storylines in metals news on MetalMiner this week:

Climate of Corruption Tempers Comeback Optimism in Brazil

Speaking of politics, our Stuart Burns wrote about Brazil and its efforts to push its way out of the doldrums of a recession, while also struggling with the specter of corruption.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

One year after former President Dilma Rousseff was impeached, her successor, Michel Temer, is facing questions about corruption. The BBC reported Thursday Brazilian judges have chosen to delay voting on a case that could in fact send Temer packing (an outcome which would continue a period of presidential instability in Brazil).

Read more

Here’s What Happened

  • All quiet on the precious-metals front this month, as our Global Precious Metals MMI held pat from May to June at a reading of 84.
  • Since we tend to keep a closer eye on the platinum group metals (PGMs) due to their automotive applications, the U.S. platinum price tracked by the MetalMiner IndX posted only a negligible gain, while the U.S. palladium price suffered only a negligible loss…reflected directly in the wash that was the sub-index’s June performance.
  • Interestingly, gold has been getting hot as of late. More on that below.

What’s Going On in the Background?

  • Although the Global Precious Metals MMI did not reflect it in the May-to-June time period, the U.S. gold price increase after June 1 has gotten some heads turning. As my colleague and new MetalMiner Editor Fouad Egbaria reported earlier this week, “gold neared its year-to-date high on Tuesday,” according to Reuters. “The rise comes in a climate of political uncertainty, with an election in the United Kingdom, former FBI Director James Comey’s testimony before the Senate Intelligence Committee on Thursday and a European Central Bank meeting this week,” Egbaria noted.
  • Back to platinum. As a reflection of the metal’s dawdling short-term pricing, South African producer Lonmin has been struggling, so much so that Reuters reported earlier this week that the company is “pulling every lever to try to restore confidence in its ailing business, including reopening a major shaft and expanding its biggest operation,” according to Lonmin’s CEO. Low prices and skyrocketing costs have reportedly conspired to present the company with a cash problem over the past near-decade.

What Metal Buyers Should Look Out For

  • Platinum specifically has had a low-price problem this year — but that’s obviously less of a problem if you’re purchasing metal. While we’re unsure of when prices will swing back up, mainly because output cuts in South Africa and elsewhere have seemingly not helped, it may be hard to discount current windows for smaller spot buys.

Exact Prices of the Key Movers and Shakers

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Gold Prices Going UpThis afternoon in metal news, Chinese imports of scrap metals could be subject to further scrutiny by the government, gold reached a one-month high and GE Additive gives away metal 3-D printers valued at $8 million to more than 400 schools. GE Additive previously committed $10 million to its GE Additive Education Program, which aims to encourage the use of 3-D printing technology in education programs and developing future talent.

China Considers Bans on Scrap Imports

China, the world’s leading buyer of copper scrap, might be reconsidering its import strategy, as Materials Recycling World reported.  Speaking at a Bureau of International Recycling (BIR) convention in Hong Kong, Ma Hongchang, BIR’s adviser on Chinese policy and regulatory developments, said it was possible the government could ban imports of certain grades of mixed metal scrap.

Two-Month Trial: Metal Buying Outlook

While nothing has been set in stone from a regulatory perspective, China will continue to have a need for scrap metals, given the growth of infrastructure projects in the country. However, it will be interesting to note the sources of its import supply — that is, whether there is a shift in imports coming from Europe and the U.S. to other nearby Asian nations.

Amid Political Uncertainty, Investors Go for the Gold

Geopolitical tensions and instabilities have a way of roiling markets and, consequently, making investors uneasy. That hasn’t been the case for gold, which recently hit a one-month high, according to a Reuters report.

As the race for prime minister in the U.K. tightens, and nations like Italy and Germany prepare for elections of their own down the road, many investors have turned to the “safe-haven asset” of gold. Spot gold rose by 0.1 percent, according to the Reuters report, to $1,267.70 per ounce.

“The ongoing political uncertainty in the market is really driving safe-haven buying at the moment,” ANZ analyst Daniel Hynes told Reuters.

GE Additive’s $10M Education Program to Bring 3-D Printers to 400-plus schools

GE Additive recently announced it would be giving metal 3-D printers to more than 400 schools, as part of its education initiative to bring the technology to students, as reported in 3D Printing Industry.

The printers, valued at $8 million, are part of Additive’s effort to give students access to additive technologies and “help accelerate the adoption of advanced manufacturing worldwide,” according to GE Additive’s website.

According to 3D Printing Industry’s report, eight universities will receive a Concept Laser MLAB cusing 100R metal 3-D printer, valued at $250,000 apiece. Although the 2017 application deadline for 3-D printers through the program has passed, educational organizations can apply for 2018 at a later date on the GE Additive website.

Free Download: The May 2017 MMI Report

This morning in metals news, the strike at Freeport McRoRan’s Grasberg copper mine was extended for a second month, oil prices rose in expectation of supply cuts, and silver prices reached a three-week high.

AdobeStock/Windsor

Freeport Indonesia Strike Extended

This past Saturday, the union representing thousands of workers at Freeport’s Grasberg copper mine in Papua, Indonesia announced that the ongoing strike will be extended beyond May 30, Reuters reported. As union industrial relations officer Tri Puspital told Reuters, “We will extend the strike for 30 more days.” Approximately 9,000 workers are participating in the strike.

Two-Month Trial: Metal Buying Outlook

The reason for the strike revolves around employment. Last month, Freeport laid off about 10% of its 32,000 workers to cut costs, which accrued to the tune of millions thanks to an ongoing dispute with the Indonesian government over rights to the Grasberg mine. “With this problematic combination of protests from workers and tensions with the Indonesian government,” wrote MetalMiner analyst Raul de Frutos earlier this month, “it’s no wonder that investors are concerned about further supply disruptions this year.” It looks like supply disruptions will continue.

A Key Week for Oil

One hopes that this will be the only time when news source after news source mentions Saudi Arabia and glowing orbs in the same headline. In more important news, Bloomberg reported yesterday that Saudi Arabia has received Iraq’s support to extend oil output cuts for nine months, after Saudi Minister of Energy Khalid Al-Falih flew to Baghdad to talk to Jabar al-Luaibi, his Iraqi counterpart. Read more

AdobeStock/atm2003

Now’s the time to buy those solar panels you’ve been saving up for. This week, Tesla announced that it is taking orders and deposits for solar roof tiles that look stunningly like… regular roof tiles. But therein lies the appeal, and the $42-per-square-foot cost isn’t so bad either, lower than what industry analysts expected, Bloomberg reported.

Keep Your Eye on Silver

This growing interest in solar energy has been supporting the demand for silver, according to the Silver Institute’s World Silver Survey 2017, which Taras Berezowsky covered on MetalMiner this week. As Berezowsky wrote, “According to the report, silver demand for photovoltaic applications shot up 34% to reach 76.6 million ounces. This growth was the strongest since 2010, and it was driven by a 49% increase in global solar panel installations.”

Two-Month Trial: Metal Buying Outlook

In addition, “automotive will be an interesting sector to watch,” Berezowsky wrote. Silver demand could be driven up further as the world moves towards electric vehicles — whose engines and circuit boards require silver — however slowly, as Stuart Burns noted earlier this morning.

Bearish Times

“If you are a metal buyer, it doesn’t matter if you buy aluminum, copper, steel or tin,” Raul de Frutos wrote in his commodities outlook this week. “The information in this article is important for you.” Commodities may have enjoyed a bull market in early 2016, but things appear to have shifted to the bear-ish. “Commodities not only have struggled to make new headway,” de Frutos wrote. “In the past few days they have weakened significantly. Recent moves in China have caused a significant shift of sentiment in financial markets.” Read more

Source: Gildor Elendill. Licensed under CC-BY

Now that Black Sails has signed off and Long John Silver is on to new adventures, it’s time to turn our attention to a different type of silver — one type of material that Silver himself spent many of his buccaneer days trying to amass.

But whereas Silver and his crew may have preoccupied themselves with coins, bars and doubloons (the former two are still big in 2017; doubloons? not so sure), we here at MetalMiner like to see how the precious metal factors into industrial end-use sectors and applications.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Turns out that one of those applications — solar panel installations, specifically — made quite a splash in the Silver Institute’s World Silver Survey 2017, produced by the GFMS team at Thomson Reuters and released just this morning.

But first, a quick high-level overview.

Topline Takeaways

Global silver mine production declined by 0.6% in 2016 to a total of 885.8 million ounces — the first such decline since 2002, according to the report.

In addition, although primary silver production increased 1% last year, silver scrap supply, despite higher silver prices, fell to 139.7 million ounces in 2016. This is a level that has not been seen in 20 years, according to the Silver Institute’s press release for the report.

“If we look forward, we don’t think [this overall mine production drop] will be a one-off, either,” said Johann Wiebe, lead analyst of metals demand at the GFMS Team/Thomson Reuters in London, in an interview. “It’ll be a prolonged drop in supply until 2019-ish. Not large, but maybe a 2% drop annually. That’s quite a shift.”

It’s not surprising, Wiebe added, if one has seen the capital expenditures retreating over the past few years, with miners looking to protect their margins. Other non-precious metal production of base metals such as lead, zinc and copper, among others, affects the silver market — the link between precious metal and base metal commodities, in other words, is tighter than at first glance when it comes to production trends. Read more

Our Global Precious Metals MMI inched up a point in April. However, this year the index seems to be struggling near 84 points. Let’s take a look at gold and palladium, two of the precious metals integrated in this index, to better understand the ongoing trend in precious metals.

Two-Month Trial: Metal Buying Outlook

Gold

Some analysts are saying that gold is up this year on its safe haven appeal due to rising geopolitical instability. But that’s simply not true. Otherwise, we would see it reflected in stock market indexes, which are trading at record highs. Not only the U.S. but also Europe, China and other emerging markets are seeing their stock markets hit multi-year highs. Investors are confident about the prospects for the global economy, and until something proves them wrong, gold is lacking any appeal as a safe haven.

Gold CME contract. Source: MetalMiner analysis of stockcharts.com

If you held gold this year, don’t thank rising political tensions; simply thank a weaker dollar and some dip buying. This year’s rally in gold follows a 18% price slump in Q4 of last year. But prices are back to their average and just 8% below $1,380/oz, a level that has been a ceiling to gold prices for four consecutive years. This means that investors will have to find good reasons to chase prices higher. Given the ongoing strength across global stock markets and the rather neutral picture of the dollar, we wouldn’t expect gold investors to get a good return on their money for the balance of the year.

Palladium

As I’ve written earlier on MetalMiner, “palladium prices rose to a two-year high in April, making it the biggest gainer among precious metals. Last month we outlined some of the factors contributing to the palladium price rise: a growing auto sector; a strong South African currency; a falling dollar; and bullish sentiment across industrial metals. However, as prices continue to climb, it’s time to question how high prices can go. Despite a still solid outlook, there are some reasons to believe palladium prices could be nearing their peak.”

One of them is a potential slowdown in demand for cars. U.S. car sales declined in April, following a disappointing month of March. Markets suspect that the car industry boom that has run since 2010 has now come to an end.

Meanwhile in China, car sales are still going strong, but the pace is not the same as last year. As I wrote before, “weaker sales tax incentives have put pressure on demand this year and are expected to slow down demand even more next year. Buyers of cars with engines up to 1.6 liters paid a 5% purchase tax last year, but they are now paying a 7.5% rate. Buyers are still finding incentives to rush on buying cars this year since the rate will increase to 10% in 2018.”

Palladium nears long-term resistance levels. Source: MetalMiner analysis of stockcharts.com data

Finally, as with the case of gold, palladium might need the stronger fundamentals to lure investors to chase prices higher. Historically, palladium has peaked in the range of $850-$900. Prices closed in April at $827.

FREE REPORT: How Circumvention Impacts Both Downstream, Value-Added Manufacturing

What This Means For Metal Buyers

Precious metals gained this year, but gains won’t come easily from now onwards. The opportunity to buy or invest in precious metals might have passed by.

Read more

This morning in metals news, we’ve seen prices for copper and gold reach three-week highs and lows, respectively.

FREE REPORT: How Circumvention Impacts Both Downstream, Value-Added Manufacturing

Threat of Supply Disruption Has Driven Up Copper Prices

Copper prices reached a three-week high today, Reuters reported, driven by potential supply disruptions. This news comes after yesterday’s rally near the Grasberg copper mine in Indonesia. Thousands of workers from the Indonesian unit of Freeport McMoRan Inc. took part, protesting against layoffs that resulted from the company’s contract dispute with the government.

Freeport had laid off 10% of its workforce, with potentially more layoffs to come. As a response, the union representing the workers has threatened to strike for the month of May.

A Three-Week Low for Gold Prices

In contrast, gold prices fell on Monday as the threat of a U.S. government shutdown faded and the U.S. dollar edged slightly higher. The metal has dropped to $1,255.50 per ounce, the lowest gold prices have been since April 10, according to FactSet data. Political tensions in Europe had kept gold prices up so far this year, but that trend seems to have been reversed.

In related news, S&P Global Platts reported that gold production in China, the world’s top gold producer as well as consumer, fell significantly in Q1 2017. In this past quarter, China produced 101.2 tons of gold, which is a 9.3% drop compared with 111.6 tons in Q1 2016.

Bernanke Argues in Favor of a Border Adjustment Tax

Former Federal Reserve Chair Ben Bernanke came out in support of the proposed border adjustment tax (BAT), suggesting to CNBC that the GOP had not presented the idea well. Bernanke argued that a stronger dollar would negate any negative effects of the BAT – which would tax imports and exempt exports – by increasing U.S. companies’ purchasing power and lowering the cost of overseas manufacturing.