Industrials (/lb): aluminum $0.87 (-0.5%), copper $2.88 ( 0.0%), lead $1.07( 0.6%), molybdenum $7.14 ( 0.0%); nickel $4.71 ( 0.3%); zinc $1.27 (-0.3%);Precious (/oz): gold $1,269 ( 0.1%), silver $16.66 ( 0.5%); Steel (/mt): ChinaHRC $578 ( 0.4%), SHFE Rebar $558 ( 0.8%), MB Scrap Index $321 ( 0.0%);Bulks: iron ore (/dmt) $73 ( 0.9%), coking coal (/mt) $182 ( 0.1%), freight (BCI)1,602 ( 8.6%); Energy: Brent (/bbl) $52.01 (-0.7%), WTI (/bbl) $49.03 (-1.1%),natural gas (/mmBtu) $2.80 (-0.4%), thermal coal (/t) $95 (-0.5%).
Rising cobalt prices incite Asia’s top battery makers to tweak recipe forlithium-ion batteries to reduce cobalt and add nickel. Growing demand and asupply shortage, sparked by conflict in Congo (~60% of global cobalt supply)has resulted in prices doubling over the last year. With forecasts for electricvehicle battery demand to grow 20-fold by 2025, manufacturers are looking tocut back on expensive components. South Korea’s SK Innovation aims tochange composition of cathodes to 80% nickel, 10% cobalt and 10%manganese from current ratio of (60:20:20). Samsung SDI, another topproducer with ~10% global market share in battery shipments expects cobaltused per battery unit to decrease by 50% in the long-term. (Mining Weekly).
US ISM non-manufacturing index falls to 53.9 (vs. 57.4 in June).
Manufacturing index drops marginally to 56.3 (57.8). Focus now turns to USNonfarm payrolls data for July (DBe 200k, vs. cons. of 180k and previously222k) as the market awaits clues on Fed’s policy actions in the upcomingmonths. Gold price remained steady at $1,269/oz. (Bloomberg Finance LP, DB).
Zambian Chamber of Mines attributes recent rally in copper prices to Chinesedemand growth and supply issues. It notes that demand has been picking upin China due to electrical wiring sector of China’s power grid which isundergoing “aggressive expansion”. Supply disruptions and recent laborstrikes in the largest copper producing regions, coupled with shortage of newcopper production capacity points to an emerging deficit. (Mining Weekly).
Vale’s CFO, Mr. Luciano Siani Pires states that success of its voluntary-shareconversion plan will help the company finance growth with equity. Havingissued equity last in 2008 ($11.5bn), it has accumulated debt since then forfunding acquisitions and expansions ($14bn S11D). It plans to reduce Net Debtto below $15bn (currently $22bn). Even though it has no immediate plans ofequity issuance, if conversion plan becomes successful by August 11, it willprevent shareholder groups from blocking future issuances. (Mining Weekly).
Rio Tinto CEO, Mr. JS Jacques reveals plans to sell its 40% share in Grasberg’sfuture production by YE17. He believes the Grasberg copper-gold deposit inIndonesia is a world-class resource but feels the operator, Freeport-McMoRan,has wounded too many by firing 3,000 employees recently and is not pleasedwith the waste management system it operates. Currently, the tailings streamis delivered to the sea through a river system. (Bloomberg Finance LP).