Base Metals Weekly Round-Up: Base Metals Up on US-China Trade Deal Optimism

Base metals ended the week on a high note, with copper, zinc, lead and nickel prices climbing on Friday (October 11) on optimism about a partial deal between the US and China. 

Copper prices started the five day period trading at US$5,625 per tonne and reached a two week high on Friday at U$5,809.50.

“Until we get a definitive outcome, metals prices will drift, but I would expect to see quite a positive response (to any good news). A lot of bad news is priced into the market,” said Caroline Bain, chief commodities economist at Capital Economics in London.

Zinc prices also edged up on Friday, climbing to their highest level in two months on the back of concerns about shortages due to the closure of Vedanta Resources’ facility in Namibia.

The metal, used to galvanize steel, hit its lowest point on Tuesday (October 8) at US$2,294 per tonne, but picked up by Thursday (October 10) to trade at US$2,398.

Despite falling this week, nickel also inched up on Friday, trading at US$17,690 per tonne. Meanwhile, lead increased almost 1 percent to US$2,178 per tonne.

Iron ore prices have performed with volatility since Monday (October 7), when they were trading at US$92.55 per tonne. The base metal finished the week at US$92.86.

Top base metals news stories

1. Best Junior Copper Stocks of 2019 on the TSXV

Although copper prices have been trading with volatility for the past few months, some analysts forecast an increase in demand for the red metal as the world becomes greener.

According to FocusEconomics’ September report, the medium-term copper outlook is bright despite this summer’s slowdown, with the recent push for decarbonization and copper’s importance in building key infrastructure driving demand for the base metal.

With Q3 now finished, the Investing News Network is took a look at the best copper stocks on the TSXV by share price performance so far in 2019.

2. Zijin Mining to Boost Stake in Ivanhoe Mines for C$194 Million

Zijin Mining (OTC Pink:ZIJMF,HKEX:2899) has announced plans to increase its stake in Ivanhoe Mines (TSX:IVN,OTCQX:IVPAF) to 13.88 percent in a C$194 million private transaction with CITIC Metal Africa and Ivanhoe Mines founder Robert Friedland.

“This rebalancing share purchase and sale agreement once again proves the high level of trust and strategic cooperation between Ivanhoe Mines, CITIC Metal and Zijin Mining,” said Friedland.

Once the transaction closes, CITIC Metal Africa will own about 26.4 percent of Ivanhoe, Zijin will own 13.88 percent and Friedland will own 13.2 percent.

3. Protestors Block Roads to MMG’s Las Bambas Copper Mine

MMG (ASX:MMG,HKEX:1208) announced on Thursday (October 10) that protests at the Las Bambas mine have affected the company’s logistics, with road blockages delaying shipments to customers.

The Las Bambas property represents one of the largest copper mines in the world, with a yearly throughput capacity of 51.1 million tonnes.

Since September 22, protestors have disrupted various sections of road between Sayhua, about 50 kilometers from Las Bambas, and Velille, 250 kilometers from Las Bambas, in the Cusco region of Peru.

Other base metals news

On Friday, Reuters reported that major miner Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) and state-owned China Minmetals are looking for copper, zinc and lead deposits in four Chinese regions.

“The JV is working with partners to secure targets for testing within these prospective belts,” a Rio Tinto spokesperson said in an email.

According to sources quoted by Bloomberg, China Minmetals, together with Jiangxi Copper (OTC Pink:JIAXF,HKEX:0358) and Zijin Mining, is considering a bid for Barrick Gold’s (TSX:ABX,NYSE:GOLD) Zambian copper mine Lumwana. The asset is expected to produce 210 million to 240 million pounds of copper this year.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.