Base Metals Weekly Round-Up: Iron Ore Falls from Grace

Most base metals ended this week on a downward note, but it was iron ore that took one of the heaviest hits right at the buzzer.

The commodity has been gradually cooling from major highs seen in recent weeks. While it spent most of this week ebbing and flowing between US$92 and US$95 per tonne, the metal had fallen 9.11 percent to US$84.99 by 2:15 a.m. EDT on Friday (August 23).

Also sliding downward was copper, which started Monday (August 19) at US$5,755 per tonne on the London Metal Exchange (LME). The red metal had skidded to US$5,667.50 by Thursday (August 22).

Nickel faced the same movement into the red this week as it slipped from Monday’s price point of US$16,000 per tonne to US$15,750 by Thursday on the LME.

While zinc hit its weekly low on Tuesday (August 20) at US$2,225 per tonne, it rebounded to peak at US$2,256 on Wednesday (August 21). The commodity then simmered to US$2,246 by Thursday.

Lead had a similar week to zinc, gradually ticking upwards from Monday’s mark of US$2,031 per tonne to a high of US$2,084 on Wednesday. Prices then fell to US$2,067 by Thursday.

Top base metals news stories

1. Nickel’s Hot Summer: What Started the Fire

With the beginning of summer came skyrocketing nickel prices, which found themselves making major leaps and bounds in the sun.

The base metal’s price point managed to surpass most analysts’ expectations, raising interest about what was kindling the hot commodity. From proposed export bans to optimism surrounding things to come, there have been a handful of factors pushing nickel ahead in recent weeks.

But a question still remains — how long will nickel be on the up? Read ahead to find out what’s impacting the nickel price right now, how long experts think the heat will last and what to watch for going forward.

2. BHP Reports Strong Annual Financials, Optimism for 2020

In its report for the 2019 fiscal year, major miner BHP (ASX:BHP,NYSE:BHP,LSE:BLT) announced that its net debt came to US$9.2 billion, down US$1.7 billion from 2018.

The company attributed the reduction to strong free cash flow, which can be seen in its profits. Attributable profit came to US$8.3 billion, while underlying attributable profit came to US$9.1 billion, marking a 2 percent increase from last year. Profit from operations came to US$16.1 billion.

BHP further flaunted its cash by returning a record total of US$17 billion to shareholders over the year. This includes a record final dividend of US$0.78 per share, which is US$0.25 above the US$0.53 required by the company’s minimum dividend payout policy.

3. MinRes Scoops Up Parker Range Iron Ore Project

Despite a prior deal with Gold Valley, Mineral Resources (MinRes) (ASX:MIN,OTC Pink:MALRY) has swooped in with a bid for Cazaly Resources’ (ASX:CAZ) Parker Range iron ore project.

In early June, Cazaly entered a conditional agreement with Gold Valley to sell its wholly owned subsidiary, Cazaly Iron, which holds Parker Range’s tenements.

The agreement laid out an initial three month due diligence exclusivity period, but gave Cazaly the right to terminate the plan if a more favorable offer arose.

Also in the news

According to reports, Teck Resources (TSX:TECK.A,TSX:TECK.B,NYSE:TECK) has been fined by Chilean officials on the basis of its Quebrada Blanca copper mine violating environmental permits. Related to the handling of mining waste and internal environmental controls, Teck’s bill is said to be US$1.2 million.

Jubilee Metals Group (LSE:JLP,OTC Pink:JUBPF) has completed the acquisition of the Sable zinc refinery, allowing it to move forward with plans for its Kabwe zinc-lead-vanadium project. The company plans to recommission the current copper-cobalt circuit during Q4, with the goal of first zinc and vanadium production in Q2 2020.

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