HONG KONG/SINGAPORE, Feb 17 (Reuters) - China may raise a tax on imports of refined zinc to 5 percent from 3 percent, smelter officials and traders said on Tuesday, a move that may be bearish for prices and put it at loggerheads with its trading partners.
The duties, which smelter officials say are intended to support domestic smelters and allow them to benefit from restocking by China's State Reserves Bureau, could be a sign that Beijing is toning down its policies to open up trade and limit the headlong expansion of the metals sector.
"The Chinese government seems to be changing policy towards metals, away from encouraging cutbacks to one where it wants to maintain production and preserve employment," said Gayle Berry, an analyst at Barclay Capital in London.
"That's bearish for metals -- China needs to cut production and these new policies are not good news for prices."
She said the tax changes, which may go into force as early as March, may even misfire and create an even bigger headache for smelters in the longer term.
Beijing is also expected to reinstate a 5 percent tax on imports of primary aluminium that it had cancelled two years ago from March 1 to support aluminium smelters. [ID:nHKG242414]
Zinc prices in China, the world's top producer of the metal, have stayed higher than the cost of imports after the SRB bought 59,000 tonnes of refined zinc from seven smelters last month as part of Beijing's plan to support smelters at a time of anaemic demand.
The SRB had also bought 290,000 tonnes of aluminium from eight smelters in December, boosting domestic prices.
"China only imports a tiny amount of aluminium. The tax will support Shanghai Futures Exchange prices, but that will also encourage smelters to restart production," Berry said.
Trade data on Tuesday showed China imported about 25,000 tonnes of unwrought aluminium in January, just 2.5 percent of the country's output of over 1 million tonnes a month.
Berry estimated that higher aluminium prices in Shanghai since the start of the year may have encouraged a million tonnes of idled or new capacity to be fired up.
"There is a low probability that these (moves) will go through. Chinese imports and exports have dropped significantly and with volumes at these levels, it would be difficult for the government to impose new taxes," said Wan Ling, an aluminium analyst at CRU.
"PROTECTIONISM" CHARGE
Traders said the proposal could leave China open to accusations of protectionism, especially after it lambasted the United States for a "Buy American" clause in the $787 billion plan to jump-start the world's biggest economy passed on Friday.
"China is big but it is part of the global market," a trader at an international trading house said.
"The Chinese started complaining of U.S. protectionism. If they start increasing import duties on everything, there's going to be a trade war."
China's official Xinhua news agency has slammed the "Buy American" requirement of the U.S. economic stimulus package, saying in a commentary that trade protectionism is a "poison" that will harm poor countries. [ID:nPEK84246]
"History and economic theory show that in facing a financial crisis, trade protectionism is not a way out, but rather could become just the poison that worsens global economic hardships," Xinhua said, in response to the passing of the U.S. plan.
William Adams, an analyst at BaseMetals.com, reckons China's actions aren't really protectionism.
"The SRB is buying metals to support domestic smelters. That is their aim rather than to make money for smelters in other countries. The problem is that if they keep domestic prices up even if they maintain the barriers, metal will continue to flow in."
Source
Showing posts with label London Metals. Show all posts
Showing posts with label London Metals. Show all posts
Tuesday, February 17, 2009
Friday, July 4, 2008
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Monday, March 31, 2008
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Wednesday, January 30, 2008
Shanghai copper steady; zinc soars on supply worries
SHANGHAI, Jan 30 (Reuters) - Shanghai copper was steady on Wednesday, while aluminium and zinc jumped, fuelled by gains in London base metals and supply concerns due to stoppages at Chinese smelters.
The April copper contract, the most active on the Shanghai Futures Exchange, closed down 20 yuan at 60,530 yuan ($8,414) a tonne, after gaining 2.6 percent in the previous session.
Wintry weather slowed deliveries of copper, said a Shanghai-based LME trader, but heavy snow also hampered consumption.
"Chinese fabricators will finish their purchasing for production during the Lunar New Year holidays by the end of this week, while we expect more imports will be delivered in Shanghai in early February," he said.
Traders forecast that copper stockpiles monitored by the Shanghai Futures Exchange would rise marginally this week, from their lowest level since mid-2005.
The Shanghai Futures Exchange has removed a regulation requiring traders who deliver copper and aluminium to the exchange to show duty-paid certificates, as China recently removed all duties on imported refined copper and primary aluminium, the exchange said in a notice filed early this week.
In Shanghai's spot market, prices rose 600 yuan a tonne, ranging between 62,100 yuan and 62,400 yuan. The spot premium dropped 450 yuan to around 100 yuan a tonne.
Copper for delivery in three months on the London Metal Exchange fell $51 to $7,240 a tonne by 0703 GMT, after gaining more than 3 percent on Tuesday to hit a two-week high after strong U.S. economic data.
"Stiffer resistance lies at the $7,450 mark, which we think will hold at this point. When we do get some selling, it should be after the Fed decision is out of the way," MF Global analyst Edward Meir said in a note. The U.S. Federal Reserve is expected to cut benchmark interest rates by half a percentage point on Wednesday after a two-day meeting. Last week, it slashed rates by 75 basis points to 3.5 percent to help boost confidence.
SHUTDOWN BOOSTS PRICES
Chaotic winter weather has besieged China's business and farming heartland, with no quick end in sight to weeks of snow and ice that have trapped energy and food flows ahead of a big national holiday.
Icy temperatures, snow and sleet pummelling much of central, eastern and southern China have forced some major metals firms to halt their facilities because of power interrupt, reducing production of aluminium, lead, zinc, antimony and ferroalloys in snow-hit Chinese provinces.
China's top zinc producer Zhuye shut all production facilities on Tuesday night amid a blackout, its board secretary said on Wednesday. The firm runs a 400,000 tonne-a-year zinc facility and a 100,000 tonne-a-year lead smelter.
Shanghai's most-traded April zinc ended up 2 percent at 19,580 yuan a tonne, while three-month London zinc was down $30 at $2,350 a tonne.
The April aluminium contract on the Shanghai Futures Exchange rose 150 yuan to 19,390 yuan a tonne, while LME aluminium lost $10 to $2,640.
"Apparently Chinese smelters lost some output during the snow storms, but rapid expansion will help them to catch up in the remainder of the year," said analyst Wu Peng at Jinrui Futures.
The April copper contract, the most active on the Shanghai Futures Exchange, closed down 20 yuan at 60,530 yuan ($8,414) a tonne, after gaining 2.6 percent in the previous session.
Wintry weather slowed deliveries of copper, said a Shanghai-based LME trader, but heavy snow also hampered consumption.
"Chinese fabricators will finish their purchasing for production during the Lunar New Year holidays by the end of this week, while we expect more imports will be delivered in Shanghai in early February," he said.
Traders forecast that copper stockpiles monitored by the Shanghai Futures Exchange would rise marginally this week, from their lowest level since mid-2005.
The Shanghai Futures Exchange has removed a regulation requiring traders who deliver copper and aluminium to the exchange to show duty-paid certificates, as China recently removed all duties on imported refined copper and primary aluminium, the exchange said in a notice filed early this week.
In Shanghai's spot market, prices rose 600 yuan a tonne, ranging between 62,100 yuan and 62,400 yuan. The spot premium dropped 450 yuan to around 100 yuan a tonne.
Copper for delivery in three months on the London Metal Exchange fell $51 to $7,240 a tonne by 0703 GMT, after gaining more than 3 percent on Tuesday to hit a two-week high after strong U.S. economic data.
"Stiffer resistance lies at the $7,450 mark, which we think will hold at this point. When we do get some selling, it should be after the Fed decision is out of the way," MF Global analyst Edward Meir said in a note. The U.S. Federal Reserve is expected to cut benchmark interest rates by half a percentage point on Wednesday after a two-day meeting. Last week, it slashed rates by 75 basis points to 3.5 percent to help boost confidence.
SHUTDOWN BOOSTS PRICES
Chaotic winter weather has besieged China's business and farming heartland, with no quick end in sight to weeks of snow and ice that have trapped energy and food flows ahead of a big national holiday.
Icy temperatures, snow and sleet pummelling much of central, eastern and southern China have forced some major metals firms to halt their facilities because of power interrupt, reducing production of aluminium, lead, zinc, antimony and ferroalloys in snow-hit Chinese provinces.
China's top zinc producer Zhuye shut all production facilities on Tuesday night amid a blackout, its board secretary said on Wednesday. The firm runs a 400,000 tonne-a-year zinc facility and a 100,000 tonne-a-year lead smelter.
Shanghai's most-traded April zinc ended up 2 percent at 19,580 yuan a tonne, while three-month London zinc was down $30 at $2,350 a tonne.
The April aluminium contract on the Shanghai Futures Exchange rose 150 yuan to 19,390 yuan a tonne, while LME aluminium lost $10 to $2,640.
"Apparently Chinese smelters lost some output during the snow storms, but rapid expansion will help them to catch up in the remainder of the year," said analyst Wu Peng at Jinrui Futures.
Saturday, January 26, 2008
Analysts Divided Over 2008 Zinc Prices due to China's Uncertain Impact
SHANGHAI (Interfax-China) -- Analysts have released varying forecasts for zinc prices this year as China's impact is undetermined, although all agree that zinc will be in surplus globally for the first time in years.
Despite predictions that zinc this year will be in surplus for the first time since 2003, a geographical gap between zinc concentrate supply and refined zinc smelting capacity is a factor expected to push up zinc prices on the London Metal Exchange, according to the latest analysis from CHR Metals.
A big surplus in global zinc concentrate supply is expected this year, despite disruptions from mining project delays and cancellations. "But the situation is that the major zinc concentrate suppliers are outside China, while the major zinc smelting capacity is inside China. We expect the global zinc market, China excluded, will experience a slight shortage, while China's domestic market will be approximately 100,000 tonnes in surplus this year," Claire Hassall, a CHR Metals analyst, told Interfax today.
China's zinc refining capacity grew 13% on an annual basis last year, dwarfing developments elsewhere in the world, and is expected to grow twice as fast as the rest of the world this year. This means that mines outside China will need even greater access to Chinese smelting capacity, CHR Metals said.
Zinc concentrate production will lift 9.6% from last year to 11.26 million tonnes this year, mainly from increased production in Bolivia, Australia, Canada and Peru, following a mining rush last year when zinc prices were high, Beijing Antaike Information told Interfax.
In addition, concern over a possible export tax on 0# refined zinc (>=99.995%), as well as the tax itself, may reduce zinc exports from China and further tighten the global refined zinc market.
China's previous export tax changes caused global zinc supply to dip by 250,000 tonnes last year.
Hassall predicted that the average LME zinc price will stand at around $2,500 per tonne in 2008.
However, some analysts still harbour downside predictions for zinc prices this year. According to a prediction by BNP Baribas, the global zinc market in 2008 will move into significant surplus, as supply from new projects and expansions comes on-stream, while China's possible export tax hikes on super high-grade zinc (0#zinc) will keep more metal off the global market and limit the fall on the LME.
UBS predicts that zinc prices will stabilize at around current levels in the short term, and the significant supply response expected from western producers in 2007 will put the market into surplus. However, China's growing zinc concentrate imports, as the country expands its galvanized steel capacity, will provide support for zinc prices in the long run.
The three-month zinc contract on the LME closed at $2,260 per tonne yesterday, down 2.26% from the previous trading day, while the most traded April 2008 zinc contract on the Shanghai Futures Exchange closed at RMB 18,790 ($2,607.37) per tonne today, down 0.05% from yesterday.
China increased the export tax on unwrought zinc (2#zinc<99.99%) from 5% to 10% on 1 June 2007, and raised it again to 15% on 1 January this year. Currently, 0#zinc enjoys a 5% value-added tax (VAT) export rebate. There is also a 5% export tax on 1#zinc.
Source
Despite predictions that zinc this year will be in surplus for the first time since 2003, a geographical gap between zinc concentrate supply and refined zinc smelting capacity is a factor expected to push up zinc prices on the London Metal Exchange, according to the latest analysis from CHR Metals.
A big surplus in global zinc concentrate supply is expected this year, despite disruptions from mining project delays and cancellations. "But the situation is that the major zinc concentrate suppliers are outside China, while the major zinc smelting capacity is inside China. We expect the global zinc market, China excluded, will experience a slight shortage, while China's domestic market will be approximately 100,000 tonnes in surplus this year," Claire Hassall, a CHR Metals analyst, told Interfax today.
China's zinc refining capacity grew 13% on an annual basis last year, dwarfing developments elsewhere in the world, and is expected to grow twice as fast as the rest of the world this year. This means that mines outside China will need even greater access to Chinese smelting capacity, CHR Metals said.
Zinc concentrate production will lift 9.6% from last year to 11.26 million tonnes this year, mainly from increased production in Bolivia, Australia, Canada and Peru, following a mining rush last year when zinc prices were high, Beijing Antaike Information told Interfax.
In addition, concern over a possible export tax on 0# refined zinc (>=99.995%), as well as the tax itself, may reduce zinc exports from China and further tighten the global refined zinc market.
China's previous export tax changes caused global zinc supply to dip by 250,000 tonnes last year.
Hassall predicted that the average LME zinc price will stand at around $2,500 per tonne in 2008.
However, some analysts still harbour downside predictions for zinc prices this year. According to a prediction by BNP Baribas, the global zinc market in 2008 will move into significant surplus, as supply from new projects and expansions comes on-stream, while China's possible export tax hikes on super high-grade zinc (0#zinc) will keep more metal off the global market and limit the fall on the LME.
UBS predicts that zinc prices will stabilize at around current levels in the short term, and the significant supply response expected from western producers in 2007 will put the market into surplus. However, China's growing zinc concentrate imports, as the country expands its galvanized steel capacity, will provide support for zinc prices in the long run.
The three-month zinc contract on the LME closed at $2,260 per tonne yesterday, down 2.26% from the previous trading day, while the most traded April 2008 zinc contract on the Shanghai Futures Exchange closed at RMB 18,790 ($2,607.37) per tonne today, down 0.05% from yesterday.
China increased the export tax on unwrought zinc (2#zinc<99.99%) from 5% to 10% on 1 June 2007, and raised it again to 15% on 1 January this year. Currently, 0#zinc enjoys a 5% value-added tax (VAT) export rebate. There is also a 5% export tax on 1#zinc.
Source
Thursday, November 29, 2007
London Metals - 27 Nov 2007
| LONDON METALS | Nov 27 | |
| Aluminium, 99.7% | ||
| purity (US$/tonne) | Close | Previous |
| Cash | 2455.20 | 2458.00 |
| 3 months | 2508.00 | 2510.00 |
| Copper, Grade A (US$/tonne) | ||
| Cash | 6565.50 | 6721.00 |
| 3 months | 6605.00 | 6750.00 |
| Lead (US$/tonne) | ||
| Cash | 3002.00 | 3007.00 |
| 3 months | 3006.00 | 3000.00 |
| Nickel (US$/tonne) | ||
| Cash | 28405.00 | 28585.00 |
| 3 months | 28705.00 | 28850.00 |
| Tin (US$/tonne) | ||
| Cash | 16715.00 | 16560.00 |
| 3 months | 16825.00 | 16650.00 |
| Zinc, Special High Grade (US$/tonne) | ||
| Cash | 2375.00 | 2391.00 |
| 3 months | 2385.00 | 2389.00 |
| Source: Bloomberg |
Friday, November 23, 2007
LONDON METALS
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Sunday, November 18, 2007
London Metal - 14 Nov 2007
| LONDON METALS | Nov 14 | |
| Aluminium, 99.7% | ||
| purity (US$/tonne) | Close | Previous |
| Cash | 2560.00 | 2528.00 |
| 3 months | 2609.00 | 2577.00 |
| Copper, Grade A (US$/tonne) | ||
| Cash | 7102.50 | 6887.00 |
| 3 months | 7130.00 | 6925.00 |
| Lead (US$/tonne) | ||
| Cash | 3575.00 | 3520.00 |
| 3 months | 3535.00 | 3483.00 |
| Nickel (US$/tonne) | ||
| Cash | 32855.00 | 33100.00 |
| 3 months | 33200.00 | 33450.00 |
| Tin (US$/tonne) | ||
| Cash | 17387.50 | 16720.00 |
| 3 months | 17575.00 | 16900.00 |
| Zinc, Special High Grade (US$/tonne) | ||
| Cash | 2678.00 | 2649.00 |
| 3 months | 2665.00 | 2640.00 |
| Source: Bloomberg |
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