Hunan Gold shares surge after large deposit found in China
The Geological Bureau of Hunan Province said on Thursday that it had detected more than 40 gold veins containing an estimated 300 tons of the precious metal.
China, the world’s top metals consumer, is looking to reboot industrial activity across the country, after the pandemic lockdown hit its economy hard.
But potential shortages of key metal-making raw materials create risks to production of everything from home appliances to electric vehicle batteries.
China boosted copper imports year-on-year in March, but still faces challenges as key suppliers in Latin America are cutting output due to coronavirus restrictions.
Copper jumped last week after a rebound in Chinese imports of the metal indicated the country’s manufacturing sector may be emerging faster than initially thought from the covid-19 slump.
China’s economy last year relied on imports for almost 80% of its copper concentrate, based on International Copper Study Group data.
Exports from top supplier Chile have been largely unaffected, despite a coronavirus state of emergency.
Chile state copper miner Codelco, the world’s largest, recently reported that its production continued in line with its plans, despite the measures it has implemented to stave off the spread of coronavirus at its operations.
China last year relied on imports for almost 80% of its copper concentrate
The company told Reuters that it had also met 100% of its sales targets, even as many of its top customers, including China, have seen industry shuttered by the virus.
In Peru, some miners have reduced shipments or even suspended operations altogether.
Australia-based MMG has withdrawn its 2020 production forecast for Las Bambas, one of Peru’s largest copper mines, after the country declared a state of emergency on March 16 to slow the spread of coronavirus.
Chinese smelters are becoming “very nervous” about supplies, says a South American miner, while treatment charges are in freefall, pointing to a tighter market.
Copper trading in New York was up by 2.4% to $2.284 a pound midday Wednesday, after a three-week low on Tuesday.
Imports from Indonesia dwarfed China’s domestic output in 2019, but the Southeast Asian country has banned nickel ore exports and inventories at Chinese ports are at their lowest since June 2018, data from research house Antaike shows.
The Philippines’ top nickel ore producers, Nickel Asia Corp and Global Ferronickel, suspended mining and export operations to comply with coronavirus-containment measures.
Tight supply will force producers of stainless steel raw material nickel pig iron (NPI) in China to “consider cutting output,” says Antaike chief nickel analyst Xu Aidong.
Benchmark nickel on the London Metal Exchange (LME) was at $12,085 per tonne on Tuesday.
Bauxite imports accounted for around 40% of China’s 2019 production of alumina, used to make aluminum, estimates CRU analyst Wan Ling. The aluminum price was $1,483.50 per metric tonne on Wednesday afternoon.
Top supplier Guinea has seen no disruption so far and Australian spot bauxite prices remain low.
“There have been some confirmed cases in the bauxite mines in Guinea and there could be more,” Wan says.
“We need to see what the government will do in terms of controlling the coronavirus.”
China relies on imports for 30%-35% of its tin concentrate, says Cui Lin, the International Tin Association’s chief China representative, with the vast majority coming from neighbouring Myanmar.
Inbound shipments, which fell year-on-year in January and February, have not been directly impacted by coronavirus-related disruptions, but mines in Myanmar are short of Chinese workers willing to cross the border to maintain ore processing operations, says Cui.
“We think maybe it will be better from May.”
Large Chinese smelters have enough concentrate in stock to last three-four months, but private producers face a difficult time in April and the first half of next month, Cui adds.
Benchmark tin on the London Metal Exchange (LME) was at $14,730 per tonne Tuesday.
(With files from Reuters)
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