Base Metals Update July 2018

TL;DR

July saw ongoing wage negotiations at BHP's Escondida copper mine, a takeover bid by London Mining for Nevison Resources, and a decline in copper, zinc, and nickel prices.

Transcript

I'm Charlotte with the investing news network and I'm here with our base metals reporter Scott we're here to tell you about what happened in the base metals space during the month of July Scott let's start by talking about some of the major developments in the market last month well Charlotte it's been a month of developing and ongoing stories in t... Read More

Key Insights

• 🇨🇱 The ongoing wage negotiations at BHP's Escondida copper mine in Chile have the potential to impact copper prices and supply.
• 🤘 London Mining's takeover bid for Nevison Resources indicates consolidation efforts in the base metals sector.
• ❓ The decline in copper, zinc, and nickel prices highlights overall market sentiment and potential effects of strike actions.
• 😚 Base metals investors should keep a close eye on the outcome of the wage negotiations and how it may impact the market.
• 😨 The rebound in copper prices towards the end of July may be attributed to strike fears at Escondida.
• 💡 The pressure is on for Nevison Resources as they consider London Mining's revised takeover bid.
• 🤘 The decline in base metals prices suggests a challenging market environment for the sector.

Questions & Answers

Q: What were the wage negotiations at BHP's Escondida copper mine about?

The workers at BHP's Escondida copper mine in Chile were demanding a $40,000 bonus and a 5% pay rise. However, BHP offered a $27,000 bonus and a pay rise linked to inflation. Workers are currently voting on whether to take strike action.

Q: What was the takeover bid made by London Mining?

London Mining made a takeover bid of $1.4 billion for Nevison Resources, a fellow Canadian miner. This bid was $100 million less than the original joint offer that was revealed in May. Nevison Resources has requested that their shareholders wait while they decide on their next steps.

Q: How did copper prices perform in July?

Copper prices experienced a decline during July, reaching as low as $5,981 per ton. However, towards the end of the month, prices rebounded and were trading at $6,180 per ton. Overall, copper lost 6% of its value during the month.

Q: Did zinc and nickel prices also decline in July?

Yes, zinc and nickel prices followed the downward trend set by copper. Zinc reached a low of $2,526 per ton but was trading at $2,589 per ton by the end of the month, still 11% below its starting value. Nickel also experienced a rebound from a low but ultimately lost 6% of its value, trading at $13,675 per ton.

Summary & Key Takeaways

• Wage negotiations at BHP's Escondida copper mine in Chile dominated the base metals space in July, with workers demanding a $40,000 bonus and 5% pay rise.

• London Mining made a takeover bid of $1.4 billion for Nevison Resources, which was $100 million less than the original joint offer.

• Copper prices declined throughout the month, reaching a low of $5,981 per ton, but rebounded to trade at $6,180 per ton by the end of the month. Zinc and nickel also experienced price declines.