Charlotte and Scott are back to talk prices and news in the base metals sector over October — a month dominated mostly by quarterly reports.
In October, yet-to-be-listed Solaris Copper chalked up a big win by signing an earn-in agreement with Freeport-McMoRan (NYSE:FCX) over the Ricardo project in Chile, while every company between here and the South Pole released quarterly reports, making for interesting reading.
Copper spent the month in a holding pattern while zinc inched up from lows plumbed in September, and nickel broke new ground for the year, falling below US$12,000 a tonne for the first time in 2018.
Charlotte and Scott are back for their October update in the base metals space. Watch the whole video above, or scroll down to read the transcript.
Charlotte: October was the time of year when quarterly reports came out thick and fast, what are some of the standouts that we’ve seen over the last month?
Scott: Well there was a lot so I’ll be brief. Let’s start with Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO), the Anglo-Australian company reported its iron ore production was down and copper production was up.
They also announced first production from the US$5.3-billion underground expansion at Oyu Tolgoi in Mongolia was pushed back to 2021.
Looking at Rio’s competitor, BHP (ASX:BHP,NYSE:BHP,LSE:BLT) trimmed its copper guidance partially due to an acid tube failure at its Olympic Dam operations in South Australia.
Charlotte: Staying on quarterly reports, what’s going on outside Australia?
Chilean copper producer Antofagasta (LSE:ANTO) revised the upper end of its red metal guidance downwards primarily due to lower grades while for Anglo American (LSE:AAL), a healthy increase in copper production helped offset disastrous iron ore production numbers, which have been ravaged by a shutdown at the Minas-Rio project since March.
Charlotte: Before we talk prices, there was some big news from the freshly-minted Solaris Copper this month — a company that was spun out from Ross Beatty’s Equinox Gold (TSXV:EQX).
Scott: Solaris was only two months old when it announced it had signed an earn-in agreement with Freeport over the Ricardo copper-moly project in Chile in the same region that’s home to BHP’s Escondida, Codelco’s Chuquicamata and Barrick (TSX:ABX,NYSE:ABX) and Antofagasta’s Zaldivar copper mines.
Freeport can earn up to an 80-percent interest in the project if it spends up big on exploration and delivers a feasibility study for an operating mine.
Charlotte: And as promised, prices. What’s was the picture in October?
Scott: Well copper has zig-zagged its way through October staying in a 200-dollar range, with a high of US$6,323, a low of US$6,145 and an average of the month somewhere around US$6,223.
Looking at this month’s LME chart compared to the whole of 2018, it’s looking like copper’s up from rock bottom but now it’s on a bit of a plateau with slight downwards trend.
Charlotte: How about zinc, has it shown any improvements on last month?
Scott: Strictly speaking, sort of. Zinc was up at the end of last month and was sitting around US$2,572 on the last day of September. It has improved since then, trending upwards over October — so on that, we can’t say it’s in a rut as it is rising in price, but as you can see from the chart it’s not headed anywhere in a hurry.
Nickel on the other hand, has posted 2018 lows in October, falling below the US$12,000 a tonne mark for the first time this year — it had been hovering above US$12,000 for most of October at an average value of around US$12,400, but took the plunge at the end of the month.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.