This morning in metals news, Shanghai rebar has dropped to a one-month low, cobalt prices are set to rise after a mining halt at a Glencore location in the Democratic Republic of the Congo (DRC) and BHP says a train derailment will impact its iron ore exports from Australia.
Shanghai Rebar Steel Futures Down
Shanghai rebar steel futures have dropped to a one-month low, Reuters reported.
MetalMiner’s Take: SHFE rebar prices have fallen recently, but this slight drop is coming together with a general decrease in Chinese steel prices.
As for the other forms in the Chinese steel sector, SHFE rebar prices have been in an uptrend since April 2018 and have just started to slow down. Steel demand does not appear to be softer yet, while supply keep increasing due to the winter cuts.
The Chinese steel sector could be harmed if the expected cuts are lower than expected, and prices could fall further.
However, readers may also remember that Chinese steel prices have historically decreased during the winter season. Therefore, some price patterns could just be repeating last year’s price movements.
Cobalt Prices Set to Rise
A stoppage at a Glencore-run cobalt mine in the DRC is expected to boost the price of the metal, which is in high demand by the electric vehicle sector.
According to the Financial Times, operations at the cobalt mine ceased Tuesday after trace amounts of uranium were discovered.
MetalMiner’s Take: Cobalt takes a page from aluminum markets.
News of a cobalt mine stoppage due to radiation could provide price support for cobalt, not too dissimilar to the temporary threat of a stoppage at a key miner of the raw material used to make aluminum.
Cobalt, however, unlike aluminum, has a much more concentrated supply market, with the DRC maintaining over 60% of total global supply.
And as many pundits predict, the rise of electric vehicles (and cobalt as a key material used in those vehicles) in other words, the demand side of the equation looks strong for both the mid- and long-term.
Therefore, buying organizations relying on cobalt will want to adapt the same kind of purchasing strategies used for other volatile materials such as aluminum and nickel.
Train Derailment to Impact BHP’s Australian Iron Ore Exports
According to a Reuters report, mining giant BHP Billiton said it expects interruptions to its iron ore exports as a result of the forced derailment of a train containing the commodity this week.
According to the report, the miner said its reserves at Port Hedland are not expected to be able to cover the entire period of disruption.