ositive US economic data and expectation of higher Chinese imports have ticked the base metals and boosted
the demand outlook. Three-month copper on the London Metal Exchange rose as much as 1.4 percent to an all-time high of $9,631.75 a tonne on December 31st 2010, up 30 percent in 2010, and was heading for a second annual increase. Copper rallied in 2010 on expectations that usage will outpace supplies in 2011 as the global economy extends a recovery and mining companies fail to keep up with demand as new reserves become harder to find and the quality of ore declines. The potential for exchange-traded products or ETPs has also increased investor interest in the metal used in cars and household appliances. ETF Securities Ltd introduced ETPs backed by copper, tin and nickel on December 10th 2010. BlackRock Inc and JPMorgan Chase & Co have said they plan to start funds backed by copper.
Bullish US Economic Data Boosts Prospects for Metals Demand
Metal prices rose after measures of US service industries and payrolls in December rose more than analysts forecast, boosting prospects for the economy and metal demand. Reports showed that US companies added almost three times more jobs in December than analysts forecast and service industries rose at the fastest pace since May 2006. The dollar rose for the third straight day against a basket of major currencies.
Earlier on December 24th 2010, copper climbed 0.6 percent a ton on the London Metal Exchange (LME), as an extended port closing in Chile, the world's largest producer, may curb supplies of the metal. "The uptrend remains intact given favorable data and news from the US," Peng Qiang, an analyst at Cofco Futures Co said from Beijing. Household purchases in the US rose 0.4 percent after a 0.7 percent increase in October that was almost twice as large as previously estimated, figures from the Commerce Department showed recently. First-time filings for jobless insurance declined by 3,000 to 420,000 in the week ended December 18th 2010, according to L a b o r Department figures. In Chile, the port at Anglo American Plc and Xstrata Plc's Collahuasi venture, the world's thirdlargest copper mine, may remain closed for 'a couple of months' after meeting with an accident, said Miguel Angel Duran, Anglo's head of Chilean operations. Copper may rally to new records as China
lead too climbed at $2. reached a record $27. while aluminum to $2. the threemonth aluminum in London climbed 1 per cent to $2. The recent report from International Copper Study Group (ICSG) showed that the refined copper market balance was in production deficit of 80.537 a tonne. and has soared a massive 53 per cent since January 2010.5 percent (2. The apparent refined copper market balance for JanuarySeptember 2010 was 436. Peru. It had hit an all-time record high of $27. Zinc was little changed at $2. the world's third-largest copper mine.5 percentYoY. The metal has advanced 26 per cent so far in 2010. a senior analyst at metal researcher Beijing Antaike Information Development Co. The aluminium markets were in surplus during January to October 2010 although the same declined from 2009. The stronger than anticipated demand for copper would intensify its deficit in 2010. In Chile.000 ton in January to October 2009. The total primary aluminium surplus was 318. China apparent usage was up by 4.54.000 tonne) compared with production in the same period of 2009: primary production increased by 1. China is now a net exporter of unwrought
Tin – best LME Performer
Copper is the second metal on the LME after tin to set a record this year as the global economy recovered from the recession.500 a tonne on December 31st 2010. according to Macquarie Group Ltd.305. on course for the first annual decline since 2004.6 million tonne in January to October 2010.420 a tonne.000 tonne in September 2010. the primary aluminium production was 33.000 tonne in January to October 2010 as against 1458. in Jan-Sept 2009.000 tonne and this currently accounts for just fewer than 41 percent of the world production total. Jeremy Gray.440 a tonne.
operations . Overall. as production was limited in Indonesia. forecast in an August report that copper may rise to $12.700. Tin. Yang Changhua. The world apparent usage grew by 8 percent in January-September 2010. curbing tin production in Indonesia. Copper may rally to new records as China imports more of the metal in the first quarter and the launch of exchange traded products locks up physical supplies. Production in Chile was up by 1.000 ton.10. Tin in London was trading at $26. Yang Changhua. Power cuts in China.000 a tonne in the next two year.5 percent during first 9 months. said.650 tonne from Jan-Oct 2009.3 per cent to $2.45. The stainless steel ingredient nickel gained 1.000 tonne). in October. During the first nine month of 2010.449 a tonne.960 a tonne. Anglo's head of Chilean
.75 a tonne. while the battery material lead fell 0. The galvanizing material zinc rose 0.000 tonne. Tin dropped 0. Standard Chartered's global head of equity research for resources.000 tonne in September 2009. The report from World Bureau of Metal Statistics showed that the demand for primary aluminium was 33.100 tonne and consumption was 32. On 24th December 2010. compared to the corresponding period previous year. the world's largest producer. As per report.imports more of the metal in the first quarter and the launch of exchange traded products locks up physical supplies. global production rose in January to October by 11. the port at Anglo American Plc and Xstrata Plc's Collahuasi venture.500 per tonne in October. Chinese output was 13. said. The production during January to October 2010 was up by 35.410 a tonne and the stainless steel ingredient nickel gained and was traded at $24. world-refined production increased by 5 percent (70.456 a tonne. while secondary production (from scrap) increased by
24. This compared to a production deficit of 55. but output from. This was higher by 4.5 percent from its low level during the same period of 2009. Copper stockpiles in LME warehouses have shrunk 25 percent this year. In the Democratic Republic Congo.5 per cent to $23. Africa's largest producer of the metal used in soldering. said Miguel Angel Duran.000 tonne. prompting analysts including those at Goldman Sachs Group Inc. After making seasonal adjustments the production deficit stood at 60.5 percent. Australia and Indonesia decreased by an aggregated 7.20. the United States. may remain closed for 'a couple of months' after meeting with an accident. a general ban on mining was imposed in September in three eastern provinces.
Among the other base metals the aluminum smelters in China may face a "critical shortage" of power that prevents them from ramping up output in the first quarter of 2011.000 tonne. also curbed output.9 percent.000-tonne global deficit in the refined metal in 2011.4 per cent to $2.500 a tonne on November 9th 2010. China and the Democratic Republic of Congo. For the whole year the surplus for 2009 was 1835. helping to buoy prices as stockpiles decline further.741. a senior analyst at metal researcher Beijing Antaike Information Development Co. The International Copper Study Group is expecting a 435. the LME's best performer this year. A La Nina weather event brought heavier-than-usual rainfall to parts of Australia and Asia in 2010. and Standard Chartered Plc to forecast higher prices in 2011. the biggest exporter.7 per cent to $26.000 tonne.
18000 crore aluminium-cum-power project in
Indonesia and is looking at commencing work on it by June 2011.000 crore. The company's investment would be 15 per cent of the total project cost. However." the company said recently. under the expansion plans. while others would be finalised soon.20 per lb . aimed at garnering about Rs 4. Rusal's Deputy Chief Executive Oleg Mukhamedshin said. which is used in the production of aluminium. the project remained stuck following delays in development of port at Tanjung Apiapi and railway line in South Sumatra. NALCO will have majority stake in the JV.5 MT. in June.50. The Chapri-Sideshwar block in Singhbhum district of Jharkhand comprises Chapri and Sideshwar blocks and has ore reserves of 49.000 crore capacity expansion plans. The development comes ahead of the copper major's about Rs 4. The company has a similar plan of reopening its closed Kendadih copper mine in the state.500 per tonne for the fourth quarter. "We have selected Ras-al Khaimah Minerals as one of the JV partners for the project. encompassing bauxite mining. Also. besides forging alliance with another mining PSU Nalco. He also said that an Indonesian stateowned mining firm too has evinced interest in the project." Simultaneously.500 per tonne and global demand for the lightweight metal to rise 8 per cent. The Aluminium Corporation of China won approval from the Peruvian government to start work on the Toromocho copper mine in Peru. Rusal said that in 2011 aluminium prices at $2.for the next 2 to 3 years. I think in general we are optimistic that this will continue . The state-owned copper miner Hindustan Copper Ltd (HCL) is planning to develop a new mine with about 50 million tonne of ore reserves in Jharkhand as part of its strategy to ramp up capacity to 12. Later. HCL plans to mine 1. The Russia-based world's top aluminium maker. The company is also eyeing copper assets in countries like Namibia. Fueled by Chinese demand. Mr. The Cabinet.
The state-owned aluminium major Nalco announced that it has selected UAE-based RAK Minerals as JV partner for its Rs. Chalco acquired Toromocho copper mine in 2007 for $800 million. The mine has total copper reserves of 13 million tonne amounting to 19% of Chinese domestic copper reserves.000 tonne. from 3.Business Talk
aluminium with exports exceeding imports by 295. The company said the spot market price for alumina. which will have debt equity ratio of 70:30.400$2. Duran said. Nalco. the company will increase the capacity of Malanjkhand mine in Balaghat district of Madhya Pradesh from 2 mtpa to 5 mtpa and Khetri copper complex in Rajasthan from 1 mtpa to 3 mtpa.5 million tonne of copper ore per annum from this mine. The mine annual output of copper totals 2. may reach $400 per tonne in 2011 on strong demand from China and other regions.000 crore share sale programme next year. "HCL proposes to engage reputed contractors for developing new underground mine at ChapriSideshwar. He sees a risk that sustained high prices could prompt manufacturers to substitute other materials for the red metal like aluminium.5 MT. and Afghanistan. "Aluminium prices in 2011 would be roughly be at current levels or higher. The company is also set to reopen another closed copper mine (Rakha mine) in Jharkhand. Indonesia. it said in a statement. The company is planning to set up 0. Indonesian Investment Coordination Board gave approval for alternative location. JV agreements are likely to be finalised in six months and the company hopes to start work on the projects by June 2011. The investment on the mine will total $2 billion to $2. by 2017. Referring to a guidance of $2. The mine's reserves are sufficient for at least 36 years of exploitation. part of its ongoing Rs. Chile.000 tonne equivalent to one fourth of China's total annual copper output. Chile's mining chamber is expecting the prices for copper to remain high for the next two to three years. with estimated coal reserves of about 34 million tonne. Post-opening. Indonesia for the projects in January 2008.though not at $4. Miguel Angel Duran head of the chamber said that a month long strike at Chile's giant Collahuasi coppers mine could hit the deposit's annual output target. which was scheduled for this month has now been deferred to next year.5 million tonne per annum (mtpa) aluminium smelter and 1. "China continues to be the motor. Indian Copper Complex.400-$2. he added. 58. HCL's 20 per cent share sale programme. alumina refining and aluminium smelting had inked a pact with Government of South Sumatra. had approved the disinvestment of 10 per cent paid up equity capital of HCL out of government's shareholding along with issue of fresh equity of equal size by
million tonne. Jharkhand. which is Asia's largest integrated aluminium complex." Nalco's Director (Finance) B L Bagra said. mainly to fund its expansion.250 MW captive thermal power plant in East Kalimantan. while the JV partners would fund 15 per cent and the remaining 70 per cent would come through loans. Mining operations in Rakha were suspended in July 2001 after it was waterlogged.5 billion.