{"id":889864,"date":"2018-07-30T21:58:11","date_gmt":"2018-07-30T21:58:11","guid":{"rendered":"http:\/\/juniorminingnews.com\/?p=889864"},"modified":"2018-07-30T21:58:11","modified_gmt":"2018-07-30T21:58:11","slug":"copper-price-bears-shrug-280b-china-stimulus-package-2","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=889864","title":{"rendered":"Copper price bears shrug $280B China stimulus package"},"content":{"rendered":"

By Frik Els<\/a><\/span> <\/p>\n

\"Copper<\/a><\/div>\n

Copper was trading down for a third day on Monday as metal traders in New York shrug off the increasing likelihood of a strike at the world’s largest copper mine and the impact of fiscal stimulus in top metal consumer China.<\/p>\n

Copper touched $2.76 or $6,080 a tonne on the Comex market, down a stomach churning 17% or $1,270 a tonne since hitting four-year highs early June.<\/p>\n

Labour action in Chile and Peru was flagged at the beginning of the year as a catalyst for a higher copper price in 2018, but so far talks have been uncharacteristically smooth, with most agreements reached during early negotiations.<\/p>\n

Together with Escondida, the Chilean operations have a capacity of 3m tonnes per year or roughly 15% annual global output<\/q><\/p>\n

However, a strike at Chile’s Escondida, responsible for nearly 5% of primary global copper supply, now looks all but certain. A 44-day strike in February-March last year crippled production at Escondida, which part-owner operator BHP expects will produce more than 1.2m tonnes in 2018.<\/p>\n

Reuters reports the union at Escondida is expected to overwhelmingly reject the final contract offer from the Anglo-Australian miner.<\/p>\n

\n

Union members have until Wednesday to finish voting on the company’s proposal, when the union will conduct an official count. After that, either party can call for a period of government-mediated arbitration that could last as many as 10 days.<\/p>\n

“Half our members have voted,” said union spokesman Carlos Allendes. “We hope for positive and overwhelming results, with around 80 percent rejecting the offer from Escondida.”<\/p>\n<\/blockquote>\n

Upcoming contract negotiations could also lead to outages at Chile’s state-owned Codelco operations which include the Andina, El Teniente, Salvador, Ministro Hales and Gaby mines and the Caletones smelter. <\/p>\n

Just today workers at Chuquicamata, Codelco’s second largest mine with output of more than 330kt last year downed tools<\/a> over a dispute with management. <\/p>\n

Together with Escondida, the Chilean operations have a capacity of 3m tonnes per year or roughly 15% annual global output. Chile introduced new labour laws in April last year which most industry analysts consider worker-friendly.<\/p>\n

BHP, which owns 57.5% of the mine, has spent nearly $8 billion expanding the mine (including a $3.4bn water plant) in the past five years to maintain output above one million tonnes.<\/p>\n

Beijing boost<\/h3>\n

A week ago Chinese authorities announced a set of measures to ease fiscal and monetary policy conditions in an effort to soften the economic impact of trade tariffs imposed by the US.<\/p>\n

The threat of an all-out trade war between the world’s largest economies has been the main reason for copper’s recent weakness. Copper is seen as a barometer of economic activity given the metal’s widespread use in industry and infrastructure. China consumes half the world’s copper.<\/p>\n

China’s State Council will speed up issuance of $200 billion special bonds for local governments to support infrastructure projects this year<\/q><\/p>\n

Ratings agency Moody’s in a research note said Bejing’s announcements represent “a significant change towards more accommodative policy” and points out that the measures constitute more than $280 billion in stimulus measures:<\/p>\n

\n

In particular, the State Council said it would focus on deeper tax and fee cuts, including by making more companies eligible for additional tax deductions on research and development (R&D) spending. The government expects the latter measure to cut tax by RMB65.0 billion ($9.5 billion) in 2018.<\/p>\n

It additionally said it would aim to speed up issuance of a planned RMB1.35 trillion of special bonds for local governments to support infrastructure projects this year and delivery of loans to small businesses through the state financing guarantee fund.<\/p>\n

Also on Monday, the PBOC made a record injection of RMB502.0 billion into the financial system via its medium-term lending facility, which provides loans to commercial banks.<\/p>\n<\/blockquote>\n

Performance enhancing<\/h3>\n

In a recent widely-quoted research note Citigroup argued for a rosy longer term outlook for copper telling investors in the sector to “prepare for a decade of Dr. Copper on steroids\u201d:<\/p>\n

\n

\u201cWe look beyond the potential trade war to longer-term copper market fundamentals and we find that current prices of $6,200 a ton are nowhere near high enough to enable the market to clear.\u201d<\/p>\n

\u201cCopper is set to outperform most other commodities under our coverage over the coming decade on a lack of mine supply growth.\u201d<\/p>\n<\/blockquote>\n

The bank sees average annual prices at $8,000 a tonne in 2022, passing $9,000 a tonne by 2028 under its baseline scenario according to a Bloomberg report.<\/p>\n

Citigroup added a note of caution for the near term in its report, noting that if a full-blown trade war materializes, copper will fall \u201cmaterially lower before it goes higher again.\u201d<\/p>\n<\/p>\n

The post Copper price bears shrug $280B China stimulus package<\/a> appeared first on MINING.com<\/a>.<\/p>\n

…read more<\/a> <\/p>\n

From:: Infomine<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Frik Els Copper was trading down for a third day on Monday as metal traders in New York shrug off the increasing likelihood of a strike at the world’s largest copper mine and the impact of fiscal stimulus in top metal consumer China. Copper touched $2.76 or $6,080 a tonne on the Comex market, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[360],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/889864"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=889864"}],"version-history":[{"count":0,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/889864\/revisions"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=889864"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=889864"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=889864"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}