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LONDON, May 10 (Reuters) - The global copper market is facing another year of supply deficit, according to the International Copper Study Group (ICSG). The Group's April forecast is for a supply shortfall of 114,000 tonnes this year after a 431,000-tonne deficit in 2022. The calculation could easily be thrown off, since it is based on changes in visible inventory combined with China's net imports of refined metal. Last year's elevated net imports served to inflate China's apparent usage. A 16.4% slump in net imports over the first quarter of this year will do the reverse.

LONDON, April 27 (Reuters) - The nickel market is facing a massive supply glut this year as surging Indonesian production continues to outpace global demand. The INSG expects only "mild growth" in the stainless sector this year. Taking up the slack from a weak stainless sector is demand for nickel from the electric vehicle (EV) battery sector. This changes the nature of this particular nickel surplus. LME stocks of Class I nickel continue to slide even as surplus builds in other parts of the supply chain.

The country nationalised its copper sector in 1971, provoking international outrage, particularly in the United States. President Gabriel Boric's lithium "nationalisation" is a more benign version, using an even earlier copper model. THE COPPER MODEL - GOOD AND BADIf President Boric's lithium policy is an echo of past copper policy, the comparison is with the "Chileanisation" programme of the Eduardo Frei Montalva administration in the late 1960s. Even the neo-liberals of the Augusto Pinochet regime kept the national jewel in the crown as they opened the rest of the country's' copper sector up to the private sector. It is now Codelco that is tasked with taking control of the country's lithium sector.

Expressed in terms of annualised run-rates, China's output of 39.9 million tonnes last month was the lowest in a year and down by 1.6 million tonnes from August's record 41.5 million. China's aluminium production is now highly dependent on weather patterns in the south of the country. China's average daily aluminium output and monthly annualised changePRAYING FOR RAINYunnan province accounts for around 12% of China's aluminium capacity and produced 4.2 million tonnes in 2022. WESTERN PRODUCTION FLAT-LINESPrimary aluminium production outside of China was flat year-on-year in the first quarter. WEATHER WATCHHowever, China's dominant position in the global aluminium picture means that it holds the key to future production patterns.

China's refined copper imports and exportsIMPORT SLUMPChina imported 408,174 tonnes of copper in March, down by 19% year-on-year and the lowest monthly intake since October. The preliminary customs report aggregates arrivals of refined metal, anode, alloy and semi-manufactured products. The country also imported 1.8 million tonnes of recyclable materials, the largest amount since 2018, and a record 25.3 million tonnes of mined concentrates. National refined copper output rose by 11% year-on-year in January-February, according to the country's official statistics body. So far this year it seems to have lost its appetite for more refined copper.

But it serves to highlight the importance of one of the most inaccessible parts of southeast Asia to the global tin supply chain. Imports from Myanmar grew from 30,000 tonnes in 2012 to 89,000 tonnes in 2013 and mushroomed to almost 500,000 tonnes in 2016. CHINESE DEPENDENCEThe Myanmar tin boom occurred at the right time for China's tin smelters, many of which were struggling to bring on new mining capacity as Beijing steadily tightened environmental controls on the mining sector. However, the threat alone underscores the fragility of tin supply at a time when Indonesia, the largest exporter of the metal in refined form, is mulling an export ban to stimulate the build-out of downstream processing capacity. This is probably not going to be the last time tin gets spooked by unexpected news from Myanmar.

LONDON, April 14 (Reuters) - A year on from the nickel crisis the London Metal Exchange (LME) is still struggling to regain trading momentum. Volumes dropped sharply after the controversial decision to suspend nickel trading and cancel trades. In this subdued metals trading landscape there are currently two unlikely star performers: London lead and Shanghai tin. The Shanghai nickel contract took a big collateral hit from the LME's crisis and volumes remain depressed, down by half year-on-year in the first quarter. ShFE volumes year-on-year change in Q1 2023LEAD GETS INDEX BOOSTERThe two metallic stand-outs in terms of first-quarter trading activity were LME lead and ShFE tin.

LONDON, April 12 (Reuters) - The zinc market was defined by smelter woes last year with global refined metal production dropping by 4.1% relative to 2021, according to the International Lead and Zinc Study Group (ILZSG). But the smelter bottleneck was severe enough to generate a global supply shortfall of more than 300,000 tonnes, according to ILZSG. A sharp rise in the annual benchmark smelter processing fee should incentivise a turnaround in metal production. Annual "benchmark" zinc smelter processing feesOUT-OF-SYNCH SUPPLY CHAINThis year's benchmark treatment charge, the fee a smelter earns for converting mined concentrates into metal, has been set at $274 per tonne, up from $230 in 2022 and $159 in 2021. Global mined and refined zinc production annual changeSMELTER RECOVERY?

LONDON, April 4 (Reuters) - The problems around artisanal cobalt mining in Democratic Republic of Congo (DRC) will take "a coalition to solve", according to Microsoft (MSFT.O). Yet the West still needs Congo's cobalt and everyone agrees that formalisation is the solution to the high human and economic costs of artisanal mining. ETHICAL DILEMMAThe ethical dilemma facing Western cobalt users, which is just about everyone with a mobile phone, is headline news again after the publication of "Cobalt Red" by Siddarth Kara. Mutoshi's artisanal miners have lost their collective pricing power and their cobalt is once again flowing down opaque channels into the industrial supply chain, the report claims. Most of the country's estimated 150,000-200,000 cobalt miners have never even had the chance of formalisation.

Soldering demand from the electronics sector remains weak and investors in London and Shanghai continue to play the market from the short side. Surging purchases of electronic goods during lockdown were followed by sharply reduced spending as many Western consumers were hit by a cost-of-living squeeze. LME positioning reports show both investment funds and other financial players are currently net short of the London tin contract after the early-year rally went into reverse. LME tin price, stocks and cash-3s spreadSHANGHAI STOCKS UP, LONDON STOCKS DOWNReasons to be negative are more obvious in China. ShFE registered tin stocks have risen by 60% to 8,745 tonnes since the start of January.

LONDON, March 27 (Reuters) - Funds have dumped their bets on higher copper prices as the turbulence triggered by the collapse of Silicon Valley Bank continues to roil financial markets. The investment community has turned net short of CME copper for the first time in five months, while funds have cut their long exposure on the London Metal Exchange (LME). Investors' negativity towards Doctor Copper contrasts with the bullish headlines generated by the FT Commodities Global Summit. Investment funds bought into copper in January, the net long position expanding from 11,830 to 32,397 contracts at the end of the month. Bulls such as Trafigura and Goldman Sachs contend it's a very thin inventory cushion if China rediscovers its copper mojo.

China currently dominates the supply chain for many of the entries on Europe's list of "strategic" metals. By which time not more than 65% of any strategic metal's consumption will be able to come from a single third country. Europe has no strategic metal inventory, unlike the United States, China and South Korea. Given such a humble starting point, it seems unlikely EU strategic metal reserves are going to come any time soon, if they come at all. What started as a response to China's dominance of critical metals supply has been accelerated by Russia's invasion of Ukraine.

LONDON, March 21 (Reuters) - The London Metal Exchange (LME) has discovered that some of its registered nickel is missing. Bags of stones shouldn't pass any inspection, whether at original load-in or during the annual audit of registered stock required by the LME's warehousing agreement. But it folds into the bigger issues around the exchange's governance and regulatory capacity after the blow-out of the nickel contract this time last year. BROKEN NICKELThe latest scandal will also intensify the question of whether the LME nickel contract is fulfilling the function of efficient price discovery forum. The nickel market was already looking for different pricing solutions before the March 8, 2022 suspension of LME nickel trading.

[1/3] Samples of rare earth minerals from left: Cerium oxide, Bastnaesite, Neodymium oxide and Lanthanum carbonate at Molycorp's Mountain Pass Rare Earth facility in Mountain Pass, California June 29, 2015. Australia's Lynas Rare Earths Ltd. (LYC.AX) slumped 6.8% on the news and has fallen further since. It hasn't helped the price of rare earths either, accentuating a sharp slide that began in February. Shanghai Metal Market rare earth assessmentsRARE EARTHS ROLLER-COASTERRare earths have been on a price roller-coaster over the last three years. There is also the lingering threat that China could weaponise its rare earths supply if relations with the West deteriorate.

LONDON, March 3 (Reuters) - The race for electric vehicle (EV) battery metals is heating up. Carmakers have already been busy tying up supplies of battery metals under direct off-take agreements with existing metals producers. Automakers' collective move into the mining sector has so far largely prioritised the lithium sector, where Western companies have been playing catch-up with Chinese investors. Lithium supply is struggling to scale up at the speed required to meet accelerating demand from battery-makers. Capital expenditure in the sector slumped, miners opting to return cash to shareholders rather than dig more big copper mines.

Aluminium will be hardest hit with penal tariffs of 200% on imports of Russian metal, effective March 10, and imports of any third-country product containing Russian metal, effective April 10. This sort of "super contango" is the market's cry for financiers to pick up spare metal, particularly Russian metal. The Gwangyang deliveries are reported to be Russian aluminium being delivered by Glencore (GLEN.L), which has a long-term off-take deal with Rusal. The cash-to-threes time-spread will be a litmus test of financing appetite for Russian aluminium over the coming period. The only get-out for supplier nations is if they too impose minimum 200% tariffs on their own Russian aluminium imports.

LONDON, Feb 24 (Reuters) - The global nickel market flipped from deficit to surplus over the course of 2022, according to the International Nickel Study Group (INSG). Indonesia's mined nickel production expanded by 48% to 1.58 million tonnes in 2022, according to the INSG. However, as Indonesian production of Class II nickel rises, the Class I market shrinks. Around 70% of the physical nickel supply chain is now priced at a discount to the LME benchmark. LME nickel volumes slumped by 28% last year and January's activity was 60% lower than that of January 2022.

Power-hungry aluminium producers in Yunnan and neighbouring provinces were already operating at reduced capacity, some of them since September, dragging down China's national output. The latest cuts will impact around 740,000 tonnes of annual production capacity, adding to the million tonnes already offline, according to industry consultancy Mysteel. Aluminium capacity has grown to around 5.25 million tonnes, making it the fourth largest provincial producer after Shandong, Inner Mongolia and Xinjiang. January's estimated annualised production was 40.50 million tonnes, a drop of almost one million tonnes over the last five months. Registered inventory on both exchanges has risen fast, cushioning the supply chain from the loss of Chinese production momentum.

☆ Column: The devil's metal strikes again in Trafigura nickel fraud case
▼ + stars: | 2023-02-17 | by ( Andy Home | Thomson Reuters | Senior Metals Columnist Who Previously Covered Industrial Metals Markets For Metals Week | ) www.reuters.com time to read: +7 min

Appearances can be deceptive when it comes to nickel, as Trafigura has just found out half a millennium later. Just as it's impossible to say whether some of the recent price volatility on the LME nickel contract was down to Trafigura restructuring hedge positions. The problem is that LME nickel trading has been volatile and unpredictable ever since last year's meltdown. There is now also a growing crisis of confidence in the world of physical nickel trading. Nickel could really do with a reputational break but recent history suggests it's just a matter of time before the devil's metal strikes again.

With Europe's winter energy crisis abating and power prices falling, there are growing expectations that idled zinc smelter capacity will restart. The exchange's latest positioning report shows four dominant long positions on cash zinc as of Monday. All of which serves to underline just how depleted LME zinc stocks are. STOCKED OUTLME zinc stocks total just 25,075 tonnes, less than one day's worth of global consumption. LME zinc pricing is going to remain volatile for a while yet as shorts betting on a return to surplus have to navigate today's low-stock reality.

Surging Shanghai metal stocks have injected an element of doubt into the bull narrative and the LME Index is now showing year-to-date gains of only 3% after a February pull-back. Shanghai Futures Exchange stocks of aluminium, copper and zincSEASONAL SURGEMetals bulls have been nervously watching the fast build in Shanghai Futures Exchange (ShFE) stocks over the past few weeks. Copper stocks have grown equally dramatically, from 69,268 tonnes to 242,009 tonnes over the same period. It is currently assessed by Shanghai Metal Market at a bombed-out $22.50 a tonne, down from an October high of $152.50. WAIT AND WATCHIt's difficult to say until China's seasonal stocks pattern plays out in full.

Western policy-makers are still mindful of the supply-chain chaos caused by U.S. sanctions on Russian aluminium giant Rusal and its owner Oleg Deripaska in 2018. A unilateral move to shut out Russian aluminium will accelerate the splintering of what was once a highly globalised market-place. Excess Chinese product in the Asian region is now being supplemented by excess Russian primary aluminium as many Western users choose to self-sanction and not buy Russian metal. Were the United States to impose high tariffs on Russian metal, the LME need only suspend delivery to U.S. locations, a precedent set with the United Kingdom's post-war tariffs on Russian nickel. The LME decided in November not preemptively to ban Russian metal deliveries ahead of formal government action against Russian producers.

Cobalt has lost share to lithium as the Chinese EV market in particular pivots towards non-cobalt battery chemistry. The abrupt turnaround in both narrative and price has led to a surge in trading activity on the CME cobalt contract as producers and consumers respond to the shifting landscape. CME cobalt price, total volume and market open interestCHANGE OF GEARCobalt's fortunes are still tied to the EV sector but the relationship is changing. That eye-watering growth rate would be stronger still were it not for a shift towards non-cobalt battery chemistries, led by China, the world's largest EV market. COBALT FUTURES TAKE OFFOne beneficiary of this turnaround in cobalt market dynamics has been the CME (CME.O), which has seen activity in its cobalt contract mushroom since the middle of last year.

LONDON, Feb 3 (Reuters) - China was a net exporter of refined zinc last year for the first time since 2007, while exports of refined lead remained super strong for the second year running. China's net trade in refined leadTRADE SWITCHChina exported 116,500 tonnes of refined lead last year, the highest-volume outflow since 2007. The Flin Flon zinc smelter in Canada produced its last zinc in 2022 after more than 25 years of activity. That of the Florence secondary lead plant in South Carolina in 2021, by contrast, was an unexpected hit to the U.S. supply chain. If China gets there first, last year's east-west imbalances in both zinc and lead markets may last longer than expected.

Median 2023 price forecasts for all the core LME base metals are lower than both last year's price and current trading levels. The LME copper cash settlement price was $9,075 per tonne on Tuesday, up 10% on the start of January. A median forecast of $8,625 for the full year is 2.1% lower than last year's average of $8,814 per tonne. Aluminium is viewed as more finely balanced, with a median forecast supply surplus of 80,535 tonnes this year and 92,100 tonnes in 2024. That said, last January's median forecast proved surprisingly close to the mark at $34,880 in what was a year of extraordinary volatility.

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