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| Rio rises on China hopes but FTSE falters as energy firms drag |
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| Code:MFN002817 Prpduct:Iron Ore Date: 2010-07-29 |
Followers of mining group Rio Tinto are expecting news of an imminent Chinese tie-up after shares in Aluminum Corporation of China (Chalco) were suspended earlier today.
Chalco's state owned parent, Chinalco, holds a 9% stake in Rio, and has indicated it would hold a signing ceremony tomorrow, with Rio executives expected to be in attendance. That has prompted a round of speculation as to what the signing might involve, with an iron ore project in Guinea said to be the most likely deal. John Meyer at Fairfax said:
The market expects Chalco to sign a deal with Rio Tinto over the Simandou iron ore project in Guinea. Rio Tinto shares could go better on this news as inking the deal should accelerate development of the world's largest undeveloped iron ore project, according to Rio Tinto. Rio Tinto is also in discussion with Chinalco over a stake in the $4.6bn Oyu Tolgoi copper mine in Mongolia.
Rio rose 32p to 3387.5p, while other miners were also in demand. Metal prices were boosted by hopes of Chinese growth, after the country's central bank suggested a double dip was unlikely. With copper at a three month high, Xstrata added 13p to 1044.5p and BHP Billiton was 23p better at 1991.5p.
But overall the FTSE 100 lost all its early gains to close 45.99 points lower at 5319.68. Joshua Raymond, market strategist at City Index said:
Today has been largely about profit taking. The FTSE 100 has rallied almost 13% since the start of the month and investors have been happy to start banking their gains. With the end of the month approaching too, naturally there could be a bit of position settlement and from a technical perspective there is a bit of resistance at 5400 on the FTSE.
Energy companies fell back after updates from Centrica, down 3.7p at 304p, and BG, 23.5p lower at 1039.5p. Scottish and Southern Energy slid 63p to £11.15 while International Power lost 11.1p to 358.4p after analysts at HSBC moved from overweight to neutral with a 370p price target, citing the possibility of a disappointing cash element as part of the company's proposed merger with GDF Suez. HSBC said:
We continue to see a tie-up with GDF Suez as offering compelling financial and operational logic for International Power. However, we see potential for disappointment over the extent of the special dividend payable to International Power shareholders. |
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| 06 Sep 2010 | | | Cash Ask | 3M Ask |
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| Copper | 7660.50 | 7675.00 |
| Aluminium | 2148.50 | 2179.00 |
| Zinc | 2146.00 | 2176.00 |
| Lead | 2160.00 | 2175.50 |
| Nickel | 21910.00 | 22000.00 |
| Tin | 21375.00 | 21400.00 |
| Al.Alloy | 2281.00 | 2170.00 |
| NASAAC | 2090.00 | 2120.00 |
| Steel Billet | 508.00 | 520.00 |
| Cobalt | 39501.00 | 41000.00 |
| Molybdenum | 35500.00 | 36000.00 |
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2010-09-06 |
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| PRODUCT |
BID
(US$/TON) |
ASK
(US$/TON) |
2B Coil-OCT |
3,300 |
3,380 |
No.1 Coil-OCT |
3,120 |
3,200 |
2B Coil-DEC |
3,300 |
3,380 |
No.1 Coil-DEC |
3,120 |
3,200 |
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MetalFirst China Average:
US$16.025/lb
As of Sept. 3, 2010
(updated weekly)
MetalFirst Average:
US$16.10/lb
As of Aug. 31, 2010
(updated twice weekly)
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