London copper underpinned by Chile floods, mine closures
London copper edged up on Thursday after a raft of weather-related mine closures in top producer Chile underpinned prices, but clouds over China’s growth prospects curbed the upside momentum.
Torrential downpours in the north of Chile have forced companies to suspend operations at some major mines, putting an estimated 1.6 million tonnes of capacity of the red metal on hold.
Analysts have been whittling down their forecasts for a surplus this year due to declining ore grades, processing problems and bad weather, which has supported prices.
“Supply challenges should dominate although the Chinese numbers remain a little bit of a drag on demand,’’ said analyst Dominic Schnider of UBS Wealth Management in Hong Kong.
“The next target for copper is $6,350.’’
Three-month copper on the London Metal Exchange firmed by 0.2 per cent to $6,138.50 a tonne by 0256 GMT after small losses in the previous session. Prices hit the highest since January 5 at $6,203.50 a tonne on Tuesday on prospects the United States might delay a hotly anticipated rate hike until later this year.
The most-traded June copper contract on the Shanghai Futures Exchange climbed by 0.5 percent to 43,880 yuan ($7,064) a tonne.
Floods may disrupt Chilean supply short-term, but are unlikely to quell a supply threat that has come from a long drought in world’s biggest copper producer, Schnider said.
“You have floods in Chile, but nothing is getting absorbed. My observation would be it’s not changing the structural water shortage,’’ he added.
Reflecting scant buying demand for copper in top user China, Shanghai premiums on a cost insurance and freight (CIF) basis fell $5 to $70-$85.
In other metals, nickel climbed away from 14-month lows up 0.7 per cent to $13,770 a tonne on expectations of tighter supply, even as its demand prospects worsened.
The European Union will impose anti-dumping duties from Thursday on imports of cold-rolled flat stainless steel from China and Taiwan, according to a notice on Wednesday in the EU’s Official Journal.
Weak demand crushes castorseed
Castorseed futures dropped on Wednesday as demand from traders was low. Spot castor declined slowly as export enquiries were lacking. Traders said that arrival of castorseed was high and demand was low. On the NCDEX, castorseed April contract lost ₹39 at ₹3,672 a quintal with an open interest of 155,520 lots. On the Rajkot Commodity Exchange (RCX), June contract decreased ₹38 to ₹3,691 while RCX spot castorseed was up ₹3 to ₹3,542. About 58,000-60,000 bags arrived in Gujarat and traded at ₹698-700 for a maund of 20 kg. Around 1,200-1,300 bags arrived in Saurashtra and sold for ₹670-715. Castor oil was down by ₹5 to ₹720/10 kg.
Import of steel and steel products
Attention is invited to Steel and Steel Products (Quality Control) Order, 2012, Steel and Steel Products (Quality control) Second Order, 2012, Steel and Steel Products (Quality Control) (Amendment) Order 2014, Steel and Steel Products (Quality Control) Second (2nd Amendment) Order, 2014 on the above subject. Reference is also drawn to Board’s instruction of even number dated 09.07.2014 regarding implementation of Steel and Steel Products (Quality Control) Order, 2012 and Steel and Steel Products (Quality Control) Second Order 2012.
- The Steel and Steel Products (Quality Control) (Amendment) Order, 2014 and Steel and Steel Products (Quality Control) Second (2nd Amendment) Order, 2014 insert the following explanation in Steel and Steel Products (Quality Control) Order, 2012 and Steel and Steel Products (Quality Control) Second Order, 2012, respectively:
“Explanation 1 .- The provisions of this Order shall apply to the products described under column (2) of the schedule covered under the relevant Indian Standard number mentioned under column (1).
Explanation 2 .- ITC (HS) Codes mentioned under column (3) are generic and indicative in nature.”
- In this regard, Board has received representations that imports of steel products are being allowed without compliance of mandatory Indian Standards stipulated, i.e. IS :2062, IS:2002, IS: 2041, IS: 277 and IS: 1786 in the Steel and Steel Products (Quality Control) Second Order, 2012. Reportedly this is being done even after the notification of the Steel and Steel Products (Quality Control) Second (2nd Amendment) Order, 2014 with effect from 04.12.2014.
- The Board desires that the import of Steel and Steel Products in contravention of the Steel and Steel Products (Quality Control) Order, 2012 and Steel and Steel Products (Quality Control) Second Order, 2012 as amended should not be allowed. Chief Commissioners of Customs / Customs and Central Excise are advised to suitably instruct officers and staff in their jurisdiction that provisions of the Steel and Steel Products (Quality Control) Order 2012 and Steel and Steel Products (Quality control) Second Order 2012 as amended are strictly complied with and import of substandard and steel products in contravention of aforementioned Orders are not permitted.
- Difficulty faced, if any, may be brought to the notice of the Board.
Reduce duty on low-grade iron ore exports, say miners
MINERS have urged the government to lower the export duty on low-grade iron ore in a move that would aid in its disposal.
Currently, iron ore shipments attract a 30 per cent tax aimed at discouraging exports. The government had imposed the levy two years ago, saying it would help preserve natural resources for extended use in India.
Reacting to the passage of the Mines and Minerals (Development and Regulation) (MMDR) Amendment Bill, 2015, by Parliament on March 20, Mr R.K. Sharma, Secretary-General of Federation of Indian Mineral Industries (FIMI), said, “The reduction in export duty is needed as domestic steel mills do not use low-grade fines because of the abundance of high grade supply. An export levy of 30 per cent makes India uncompetitive in global markets.”
FIMI estimated iron ore output for FY14 at 124 million tonnes (mt). Of this, 20 mt comprised high grade lumps with more than 63.5 per cent iron, while the remaining 104 mt of ore was excavated as fines containing less than 63.5 per cent of iron.
This post was written by Atlantic Admin