Base Metals Weekly Round-up: Metals Rebound Mid-Week

Most base metals ended the week on a high note after rebounding from mid-week lows.

Zinc was no exception as it started the week at US$2,238 per tonne, only to slip to US$2,210 on Tuesday (September 3). The metal managed to land in the green by Thursday (September 5), however, when it climbed to US$2,350 on the London Metal Exchange (LME).

Having seen a similar week to zinc was lead, which saw its weekly low of US$1,995 per tonne on Tuesday. It later grew to US$2,064 by Thursday.

Last on the rebound express was copper, which fell to US$5,536 per tonne on Tuesday but made leaps and bounds up to US$5,776.50 by Thursday.

Falling from significant peaks this week was nickel, which started the week at US$18,620 per tonne. The commodity went on to hit mid-week snags and fall to US$17,535 by Thursday.

On the note of hitting snags, iron ore has fallen significantly over the last month. After reaching summer peaks of up to US$123.19 per tonne, the commodity found itself down 5.19 percent by 2:38 a.m. EDT on Friday (September 6) to reach US$86.24 per tonne.

Top News Stories

1. Indonesia Moves Forward on 2020 Nickel Ore Export Ban

Speculation has now become reality within the nickel space, with Indonesian officials declaring that the country will ban nickel ore exports as of January 1, 2020.

The ban was previously docketed for 2022, and nickel prices have gained recently on rumors that the world’s largest producer of the base metal would bump up the ban.

On Monday (September 2), the country’s Energy and Mineral Resources Ministry confirmed plans to move the ban up and put it in place ahead of schedule.

2. Wind Turbines to Boost Copper Consumption to 2028: WoodMac

A new report from Wood Mackenzie forecasts that the installation of global wind turbines between 2018 and 2028 will consume over 5.5 million tonnes of copper.

According to the firm, over 650 gigawatts (GW) of new onshore and 130 GW of new offshore wind capacity will be installed during that time. As copper is used in wind turbines’ generators, power transformers, gearboxes and tower cabling, this is set to boost consumption of the red metal.

Henry Salisbury, a Wood Mackenzie research analyst, explained that governments have been looking to transition to renewable energy sources. He added that wind technology is the most copper-intensive form of power generation and is expected to consume the largest amount of copper within the sector.

3. What’s on the Horizon for Nickel Prices?

Over the last little while, nickel has been the talk of the town. Pricing surged over the summer months on the back of electric vehicle optimism and speculation surrounding Indonesia bumping up a planned nickel ore export ban.

As of early this week, the ban became a reality when Indonesia’s Ministry of Energy and Mineral Resources officially announced the ban will go into effect on January 1, 2020, ahead of the originally planned January 2022 date. Nickel prices immediately jumped on supply concerns as Indonesia is the world’s largest producer of the commodity.

Unsurprisingly, experts from around the space have begun to weigh in on what all of this means for the future of nickel pricing and supply.

Also in the news

With nickel prices on the rise, Poseidon Nickel (ASX:POS) has announced its plans to restart its Black Swan nickel operations in Western Australia. Expected to cost AU$2.9 million, the company’s board has approved a work program set to include rehabilitating mine escape ladderways at the Silver Swan mine and all accessways and structures at the Black Swan plant.

Also in the nickel space, Centaurus Metals (ASX:CTM) has executed a formal sale agreement with Vale (NYSE:VALE) for the latter’s Jaguar nickel sulfide project in Brazil. The deal will initially see Centaurus pay US$250,000 in cash and transfer its Salobo West tenure to Vale.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.