ALUMINIUM: Where Will Aluminum Prices Head After Surprise Jump?
Two factors fueled the price surge. First, the government of Changji, Xinjiang, issued Notice on Halting Construction of Illegal Aluminum Capacity on its website on April 14. Second, rumor was flying that the National Development & Reform Commission (NDRC) released “2017 656” document, which is about issuing notice on “Action Program on Cracking Down on Illegal Projects in Aluminum Industry”. This sparked expectations for tightening control on the supply side.
Capacity Cut Policy Heats Up
Three companies were targeted in the notice issued by Changji government:
• 800,000-tpy at Xinjiang East Hope Nonferrous Metals (located in Xinjiang Zhundong Economic Tech Development Zone),
• 800,000-tpy at Xinjiang Qiya Aluminum (located in Xinjiang Zhundong Economic Tech Development Zone), and
• 400,000-tpy at Xinjiang Jiarun Resources (located in Manasi Industrial Park).
Rumor surrounding the NDRC document began on April 16. Rumor about capacity cut, which has been flying around for more than two months, may come true. The NDRC is likely to issue “Action Program on Cracking Down on Illegal Projects in Aluminum Industry” on its website soon.
GOLD: What U.S. Tax Reform Delay Could Mean For Gold
Treasury Secretary Steven Mnuchin said that President Donald Trump’s tax reform could be delayed and not make it through Congress before August due to setbacks with the healthcare bill, the Financial Times recently reported.
What U.S. Tax Reform Delay Could Mean For GoldAnd, according to one analyst interviewed by Kitco News, a significant delay in carrying out Trump’s tax reform promise could boost gold, which is known for its safe-haven appeal.
Mnuchin made the comments in an interview published by the Financial Times on Monday, describing the August deadline for the massive tax reform bill as “highly aggressive [and] not realistic at this point.”
“It is fair to say it is probably delayed a bit because of the healthcare,” he said. Trump’s administration will still try to pass an overhaul of the tax code in 2017, Mnuchin added.To BMO Capital Markets, a major delay could help gold, but the gains would be limited.
“Confirmation from the Trump administration that tax reforms will be delayed could provide a slight bump to gold prices (reflecting a loss of confidence in the U.S. economy over the near term),” Sarah Howcroft, economist at BMO Capital Markets, told Kitco News in a phone interview on Monday afternoon.
COPPER: Capstone Mining reported production result in the first quarter of 2017 and copper output totaled 20,900 tonnes, including 11,300 tonnes at Pinto Valley mine.The flood in late January slashed capacity at Pinto Valley mine”, the company said.
However, Capstone Mining holds output anticipation at 94,000 tonnes unchanged in 2017.
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