Base Metals Weekly Round-Up: Iron Soars, Other Metals Falter

It’s been a hard week for most of the base metals, with the majority taking a hit as November draws nearer to a close.

Despite a spike on Wednesday (November 20), copper’s price fell this week by 0.25 percent. The red metal started the week at US$5,827.50 per metric ton and climbed to US$5,872 on Wednesday, but it was trading for US$5,812 by Thursday (November 21).

Lead had a similar week to copper, spiking on Wednesday but ultimately falling to a weekly low on Thursday. Lead started the week trading for US$1,975 per metric ton and spiked to US$1,995 on Wednesday only to fall to US$1,972 on Thursday, representing a 0.15 percent drop over the period.

Nickel dropped this week as well, with the metal reaching its weekly low on Wednesday at US$14,305 per metric ton. Nickel started the week on Monday (November 18) at US$14,750 and ended the week on Thursday trading for US$14,405, decreasing by 2.34 percent over the week.

Zinc also took a downturn this week, with its price decreasing by 2.34 percent. Zinc started the week trading for US$2,383 per metric ton only to finish the week trading at US$2,327.  

Unlike the other metals, iron had a strong week, increasing by 0.75 percent. On Monday, iron traded for US$82.93 per metric ton and ended off the week on Thursday trading for US$83.55.

Top News Stories

1. Nornickel Plans to Briefly Reduce Shareholder Dividends

Norilsk Nickel (MCX:GMKN) announced its intention to decrease shareholder dividends between 2023 and 2025 as the company focuses on investing in new projects. The company would return to the current level of dividends before the end of 2030. 

Through this investment, Nornickel hopes to increase nickel production by 15 to 20 percent to 250,000 to 280,000 metric tons and copper production by 20 to 40 percent to 520,000 to 560,000 metric tons. The company wants to also see a combined increase of 30 to 95 percent to 160 to 205 metric tons of palladium and platinum. 

2. Indonesia Hopes to Approve Battery-grade Nickel Plants Soon

The government of Indonesia hopes to have completed environmental studies required for factories to produce battery-grade nickel chemicals by the end of 2019. 

Some of the delays for the approval were due to Indonesia’s effort to revise rules on managing waste at high-pressure leaching plants, but the government hopes to have a ruling on it by the end of the month.

3. Rio Tinto Disputes Oyu Tolgoi Lawsuit Claims

Global miner Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) denied claims made in administrative court that the government of Mongolia did not follow due process regarding processing permits at the Oyu Tolgoi project, as alleged by the non-government organization Darkhan Mongol Nogoon Negdel. 

The Oyu Tolgoi mine has the potential to become one of the largest copper mines in the world, featuring both open-pit and underground components, which would yield an annual output of 500,000 metric tons of copper. 

In other news:

Canadian mining company Teck Resources (TSX:TECK.A,TSX:TECK.B,NYSE:TECK) announced that it had hired Barclays (LSE:BARC,NYSE:BCS) to sell all of its stake in the Zafranal copper asset in Peru. The project could go for as much as US$500 million, but requires an investment of over US$1 billion to start production. 

Meanwhile, the Financial Times reported that Odey Asset Management has called for closer oversight over the iron ore market in Asia, concerned that the global market is being influenced by trading houses unfairly. 

“It is quite clear that the three (iron ore) markets are being gamed by some trading houses in Asia,” said Henry Steel, portfolio manager at Odey Asset Management, in an interview with the Financial Times.

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