Base metals prices closed lower today, while nickel recovered some past lost

Firstly, Aluminium had the hardest hit at the end of today’s trading. Lead and Nickel prices ended higher, with nickel recovering some lost ground from previous sessions.
Wednesday the 26th  was the Nickel lowest fall since June 2016, which hit it pretty strong. While today, on LME, it finished more than 1% higher.

Aluminium finished failing more than 2% at the kerb. Still, a test of psychological resistance at $2,000 per ton remains in play.

“The USA has opened a trade investigation which could lead to a curb on imports on aluminium and no doubt fuels the rumours of impending potential China capacity cuts,” Marex Spectron’s Alastair Munro said. (Metal Bulletin)

Movement of afternoon selling  wave has been apparent on the LME over the last few weeks; triggering an algorithmic trading. It seems it appeared again this afternoon.

It is possible that the Chinese sellers (with their absence) affected the markets hard today. In fact, they are out until next week because of their May Day holidays.

Copper falls $23/t

After consistent price gains earlier this week, three-month copper price ended $23 lower at $5,692 per ton. Copper inventories fell a net 900 tons to 260,575 tons. BHP Billiton has cut its copper production guidance for the 2017 financial year. Again due to the 44-day long strike at its Escondida mine in the first quarter. Following a 2% reduction on its guidance in the fourth quarter last year.

Meanwhile, due to the significant impact of the strike at Escondida and the production abbreviation at Freeport’s Grasberg, Rio Tinto has also revised its 2017 copper production guidance downward. After reporting a 37% decline in first-quarter copper output.

“Supply disruptions and labor disputes will have the potential to squeeze prices higher still and, with macro tailwinds suggesting robust demand growth, we expect prices to trade on the floor at around $5,550 per ton.” (Sucden Financial forecast)

Lead and nickel prices increase, other base metals down

Nickel recovered slightly after yesterday’s sharp decline – it rose $105 to close at $9,330 per ton. Inventories slipped 336 tons to 379,002 tons.

The three-month lead price ended $20 higher at $2,205 per ton. Stocks fell 350 tons to 165,400 tons

The three-month aluminium price fell $40 to end at $1,925 per ton. Aluminium stocks fell again but by the smaller margin than in recent sessions, down 3,925 tons at 1,652,200 tons.

The three-month zinc price fell $29 to conclude at $2,597 per ton. Stocks were down 825 tons to 349,925 tons.

The three-month tin price fell $75 to $19,825 per ton – it has been fluctuating between $19,800 and $19,900 over the past month. Inventories fell 20 tons to 3,020 tons.

The dollar index was recently 0.19% higher at 99.14.

U.S. Tax Code

Yesterday, president Donald Trump and his administration introduced a revamped US tax code, which buoyed equity and broader markets. But after closer inspection and evaluating the timetable, market participants grew more hesitant that an overhaul would be a timely affair.
“Tax reforms announced by the Trump administration yesterday have so far failed to bolster price sentiment. Largely because the market is becoming increasingly skeptical about just how “huge” tax reforms and proposed fiscal spending will be for US growth. And also for the metal demand.”

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