SHFE : Trump’s infrastructure spending plan rises expectations on base metals market

,

SHFE 

Base metals prices on the Shanghai Futures Exchange were all UP during Asian morning trading today. Inspired by news that US president Donald Trump will announce his plans for infrastructure spending very recently.
“Base metals prices were higher amid reports that President Trump will announce his infrastructure spending plan within the next two to three weeks.” An analyst based in Shenzhen, China, said.

If Trump’s $1 trillion spending plan to upgrade US infrastructure becomes a reality –  the demand for skilled workers to improve roads, highways, bridges, air traffic infrastructure, waterways and the electrical grid will skyrocket in the coming years. Potentially creating four million jobs in the process.

“It is said that Trump’s infrastructure plan could create four million skilled trades jobs. Trump’s border wall alone is expected to create 21,000 jobs. While the plan will also drive demand for the metals.”
The expectations of increased demand for the metals have seen prices well support this morning.

Copper prices rise on tightness fears, strike in Indonesia

 “Workers at PT Freeport Indonesia had started a month-long strike at Grasberg. Now the market is focusing on the risk of tight supply again, pushing up copper prices.”

The SHFE June copper contract stood at 46,820 yuan per ton. As of 04:00 London time, up 490 yuan compared with last trading session’s close.

Meanwhile, Galaxy Futures also warned that the Chinese government will strictly limit credit flowing into speculative buying in the country’s property market, which will put some pressure on copper prices. SHFE copper stocks fell 10,830 tons or 4.5% to 229,361 tons last week.

 

Other metals higher

 

June lead price on the SHFE was 240 yuan higher at 16,595 yuan per ton. Lead stocks dipped 218 to 72,070 tons as of Friday.

September tin contract climbed 2,230 yuan to 144,750 yuan per ton. SHFE tin stocks fell 19 tons to 2206 tons last week.

The September nickel contract rose 1,010 yuan to 80,310 yuan per ton. Nickel stocks at SHFE-bonded warehouses rose 439 tons to 84,334 tons as of Friday.

The SHFE June aluminium contract inched 60 yuan higher to 14,075 yuan per ton. Aluminium stocks rose 12,544 ton to 391,578 tons in the week ended April 28. The SHFE June zinc contract rose 385 yuan to 22,285 yuan per ton. Zinc inventories at Shanghai Futures Exchange-approved warehouses fell 40,312 tons – or 25.9% – last week to 115,040 tons as of Friday April 28.


Currency moves and data releases 

  • The dollar index was recently 0.12% lower at 99.025.


• In other commodities, the Brent crude oil spot price was down 0.72% to $51.45 per barrel.
• In data, China’s official NBS Manufacturing PMI fell to 51.2 in April from 51.8 in March and below market expectations of 51.6. It was the ninth straight month of expansion but the weakest since October 2016.
• The official Non-Manufacturing PMI also dropped to 54.0 in April of 2017 from 55.1 in March. It was the lowest reading since October 2016.
• Earlier this morning, China’s Caixin Manufacturing PMI fell to 50.3 in April from 51.2 in March and below market consensus of 51.2. It was the lowest reading since September 2016.

• Later today, UK and EU manufacturing PMI, EU unemployment rate and US total vehicle sales are expected.

/0 Comments/by

High alert in France: Protesters march against Le Pen; Euro fuss

,

Finals

France’s most crucial election in decades entered its final week.

Emmanuel Macron and his far-right rival Marine Le Pen traded campaign blows across Paris on May Day.

The vote in the world’s fifth largest economy, a key member of the NATO defense alliance, will be the first to elect a president who is from neither of the main political groupings. The candidates of the Socialists and conservative party The Republicans were knocked out in the first round on April 23.

Between them Le Pen and Macron gathered only 45 percent of votes in that round, which eliminated nine other candidates.

Second round of the elections is taking place in the middle of a weekend extended by a public holiday. That has fed speculation that a high abstention rate could favor Le Pen, whose supporters typically tell pollsters they are staunchly committed to their candidate.

 

May Day speeches

Firstly, Macron looked for a third successive day to picture National Front candidate Le Pen as an extremist. While she portrayed him as a clone of unpopular outgoing Socialist President Francois Hollande, under whom he served as economy minister from 2014 to 2016.

Secondly, the latest opinion poll showed Macron leading Le Pen by 61 percent to 39 ahead of Sunday’s election. Which offers France a choice between his vision of closer integration with a modernized European Union, and her calls to cut immigration and take the country out of the euro.

“I will fight up until the very last second. Not only against her program, but also her idea of what constitutes democracy and the French Republic.”

Thirdly, He was speaking after paying tribute to a young Moroccan man who drowned in the River Seine in Paris 22 years ago after he was pushed into the water by skinheads on a May Day rally by the FN. (Then led by Le Pen’s father Jean-Marie.)

Since beginning of candidature, she has worked hard to cleanse xenophobic and anti-semitic associations related to her. She said at the weekend she had no more contact with her father. And is not responsible for his ‘unacceptable comments’.

Campaigning in Villepinte, Marine Le Pen told a rally:

“Emmanuel Macron is just Francois Hollande who wants to stay and who is hanging on to power like a barnacle.”

 

Divided France

Following, Le Pen’s father gave his own traditional May Day speech at a statue of French medieval heroine Joan of Arc. Just a few hundred meters from where Macron commemorated the death of young Moroccan Brahim Bouarram.

“Emmanuel Macron is doing a tour of graveyards. It’s a bad sign for him,” he said.

The bitterly contested election has polarized France. Exposing some of the same sense of anger with globalization and political elites that brought Donald Trump to presidential power in the United States, and caused Britons to vote for a divorce from the EU.

 

Euro fuss

In recent days,  Le Pen has sought to play down the importance of an exit from the euro – the part of her campaign platform that is the least popular with voters.

In conclusion, in her speech lasting nearly an hour Today, she made no reference to the single currency. While devoting most of it to slamming her centrist rival and billing him as the candidate of the establishment.

“I want France to get its independence back by negotiating with Brussels the return of our sovereignty.”

Also, referring to her plan to hold a referendum on whether France should remain in the EU, she said: “The French people will decide.”

 

 

***

Protesters Masks:

Protesters wearing masks of French presidential candidates. Emmanuel Macron (L) and Marine Le Pen depicted as the Grim Reaper lead a march marking the annual May Day workers’ rally in Marseille, southern France, on May 1, 2017. (Photo Source: CNBC)

/0 Comments/by

Trump says he’ll shut down NAFTA if he’s not able to clinch better deals

,

Important News To Know about Today’s  Market:

 

  • ISM Manufacturing PMI (U.S.) rose to actual 57.2, while forcast was 57.0
  • Congress averts U.S. government shutdown
  • Global stocks edge up; key European, Asian markets closed
  • Oil starts the week lower
  • S. data, Mnuchin ahead
  • China factory activity slows in April

For more info on these subjects, visit: https://www.investing.com/

 

Trump about NAFTA

“The United States is preparing to shut down the North American Free Trade Agreement (NAFTA) if renegotiation efforts prove fruitless.”

In an interview with CBS’s “Face the Nation”, Trump was insisting that he was going to terminate the agreement which links the U.S. to Canada and Mexico. Before having a change of heart when the leaders of both countries reached out to him. (CNBC)

“I got a very nice call from Justin Trudeau, the prime minister of Canada,” Trump told CBS. “I was all set to do it. In fact, I was going to do it today. I was going to do it as we’re sitting here.”

Firstly, after conversing with Trudeau and Mexican President Enrique Pena Nieto, Trump said he would negotiate. However, the president added that “if I’m not able to renegotiate NAFTA, I will terminate NAFTA.”

Secondly, Trump signed an executive order Saturday directing the Commerce Department and the U.S. trade representative to conduct a study of U.S. trade agreements. The goal is to determine whether America is being treated fairly by its trading partners and the 164-nation World Trade Organization.

 

U.S. and Canada

Following, last week Trump lashed out at Canada. Suggesting the country was unfairly disadvantaging U.S. dairy and lumber products. Yet in practice, some economists say, Trump has been less stridently anti-trade as his campaign rhetoric suggested he would be.

“In general, the Trump administration has, up to now at least, taken a much less protectionist line than we feared after the very dark and foreboding inaugural speech, which talked of putting America first and that protection would lead to prosperity,” Capital Economics said in a report.

“However, there is no guarantee that we won’t see a renewed protectionist lurch,” particularly as warring factions close to the president jockey for advantage, the firm added.

 

February’s Press Conference

 

Let’s remind ourselves about what happened february the 13th. In a press conference where Mr Donald Trump and Canada’s PM Trudeau were discussing their NAFTA partnership:

…

“We have a very outstanding trade relationship with Canada. We’ll be tweaking it. Also, we’ll be doing certain things that are going to benefit both of our countries. It’s a much less severe situation than what’s taken place on the southern border.” Trump said at a joint White House press conference with Trudeau.

Trump has called for a renegotiation of NAFTA, the deal implemented in 1994 that helped to make Canada and Mexico two of America’s crucial trading partners, saying it has harmed American workers. After his meeting with Trump, Trudeau stressed the magnitude of the U.S. and Canada economic relationship. Saying the countries “ventured into groundbreaking economic partnerships that have created good jobs for both of their people.” (source: CNBC)

…

In conclusion, the idea of U.S. administration is clear. They would like it better if Mexico’s out. But there are certain factors that show good and bad parts of every possible outcome. Certainly, Mr Trump’s announcement that he would shut down NAFTA should be considered wisely…

 

 

 

/0 Comments/by

Asia fractionally higher; Nikkei up by 0.2% and ASX up 0.13%

,

Markets in Asia open fractionally higher today, with several major exchanges closed for a Labor Day public holiday.

Australia’s ASX 200 trades up 0.13 percent in early trade, with most sectors higher. The energy sector, however, was down 0.41 percent as oil plays struggled for gains.

 

Oil

 

Oil Search shares were down 0.28 percent, Santos was down 0.14 percent, Woodside Petroleum was down 0.16 percent, Beach Energy lower by 1.36 percent and Origin Energy fell 1.25 percent. (CNBC)

In Japan, the Nikkei 225 gained 0.15 percent, with energy names also struggling.. shares of Inpex fell 0.98 percent.

U.S. oil prices fell in morning trade during Asian hours, down 0.24 percent at $49.21 a barrel.

The weeks sets up for several key events. Including central bank decisions in Australia and the United States. Following, it comes a second round of presidential election in France and corporate earnings.

“We have the Fed funds futures pricing at 64 percent chance of a June hike (from the Federal Reserve). But the pricing mechanism could also easily change while we will have pretty much every key piece of U.S. economic data release.”  (Chris Weston, chief market strategist at spread-bettor IG.)

 

Currency moves

 

In the currency market, the dollar index, which measures the greenback against a basket of currencies, last traded at 98.97, dropping from levels above 99.00 reached in the previous week.

Among other currency majors, the yen traded at 111.35 to the dollar. Major exporters were mixed, with Toyota shares down 0.2 percent, Nissan down 0.19 percent, Honda up 0.19 percent and Sony gaining 2.58 percent.

Meanwhile, the Australian dollar fetched $0.7484 and the euro traded at $1.0902.

 

Global Politics

 

U.S. President Donald Trump said on Sunday that nor U.S. neither China would be satisfied if North Korea tested more missiles. Adding that “we’ll see” if military action would be needed to curb the country’s nuclear ambitions.

Amid rising tensions between the U.S. and North Korean leader Kim Jong-Un, Trump told CBS’s “Face the Nation” that Kim is “going to have to do what he has to do. But he understands we’re not going to be very happy.” Trump added that Chinese President Xi Jinping would feel the same.

  • “If he does a nuclear test, I will not be happy.” Trump said in the interview, and also suggested he was finessing his critiques of China’s trade policy in part to get their support on pressuring Pyongyang.

When asked why the country’s missiles keep exploding, Trump stated “I’d rather not discuss it. But perhaps they’re just not very good missiles. Eventually, he’ll have good missiles.” (CNBC)

/0 Comments/by

Last week summary

,

Sunday news:

  • China Manufacturing PMI fell to actual 51.6 (while forecast was 51.6)
  • Tomorrow is the International Holiday. Labor Day, May the 1st.

 

Last Week’s Trade

Base metal prices on the London Metal Exchange were highly up at the end of trading in Friday April 28, with aluminium the only one to see a decline in price.
After steady increases across the board during premarket trading in Friday, base metals on the LME saw little change as it heads in to a three-day weekend.
One trader said: “Things have been fairly quiet today and for the last few days, but it is starting to pick up as we head into May.”

Friday: Copper hit highs of 5,750 per ton and finished trading up $43 on Thursday’s close. Nickel bounced back from a decline earlier in the week with a price hike of $120 per ton, while tin sits just $100 shy of the $20,000 per ton mark.

“Over the past month, copper inventories [on the LME] have fallen over 16%, while zinc is down 9%, lead 8% and aluminium 6%. All have had recent supply disruptions which may have impacted this.” (ANZ)

“Base metals bounced overnight with volumes improving compared with earlier this week, although lead and nickel are the only metals to register above average turnover.” (Marex Spectron)

The exchange will resume trading on Tuesday May 2 because of the May Day holiday on May 1.

Copper price – upwards trend 

The three-month copper price rose $43 to $5,735 per ton at the close of trading.

“Copper is starting to look up. Much of the overhang of speculative longs has been sharply reduced; this means it can react to news as it comes in.” (Ole Hansen)

Copper inventories fell a net 2,775 tons to 259,728 tons. Major copper producers BHP Billiton, Freeport-McMoRan and Antofagasta lowered their production forecasts for 2017 amid operation disruptions.(Metal Bulletin)

BHP Billiton has cut its copper production guidance for the 2017 financial year again because of the 44-day long strike at its Escondida mine in the first quarter, following a 2% reduction on its guidance in the fourth quarter of last year.

 

Aluminium price falls

 

The three-month aluminium price fell $12.50 but remained above the $1,900 per ton mark. It finished trading at $1,911 per ton. Aluminium stocks fell again by 7,325 tons to 1,945,357 tons. Nickel is starting to recover from sharp declines earlier in the week. It rose $105 per ton at Thursday’s finishing and saw an increase of $125 per ton in Friday. Nickel’s three-month price finished trading $120 per ton higher than Thursday’s end at $9,450. Inventories for nickel slipped 30 tons to 379,644 tons.

Zinc saw an increase of $26 to $2,623 per ton. Stocks rose 875 ton to 349,050 tons. The three-month lead price rose $44 to $2,249 per ton. Stocks fell 125 tons to 165,275 tons.

 

The three-month tin price increased by $75 to $19,900 per ton – it has been fluctuating between $19,800 and $19,900 per ton over the past month. Inventories rose 65 tons to 3,015 tons.

 

 

 

/0 Comments/by

Norilsk Nickel is about to sue Botswana’s government for $277 million

,

Today, The Norilsk Nickel said they would start a legal law action against Botswana’s government, due to their imprudent trading that goes beside their deals.

Norilsk Nickel Group is going to initiate legal proceedings in Botswana. Seeking to collect more than $277 million from the country’s government over asset selling transaction. For its involvement in the “reckless trading” of BCL Ltd and BCL Investments Proprietary Ltd.

 

The announcement

It plans to sue the government for $277 million. Plus adding damages and other costs owed to the company in relation to the sale of a 50% interest in the Nkomati mine in South Africa. It also intends to claim a further $6.4 million in relation to the sale of the Tati mine in Botswana.

“Norilsk Nickel will ask for a court order making the government responsible for paying all of the liabilities due from BCL under its agreement with Norilsk Nickel and the costs of the intended court proceedings.”

“It would appear that the Government of Botswana is in negotiations with potential investors about a possible sale of BCL. Norilsk Nickel reiterates its rights in relation to the Nkomati and Tati transactions and will continue to seek the repayment of the outstanding debts due to Norilsk Nickel by all legal means.” (Metal Bulletin)

 

The agreements dating from 2014

The company agreed to sell its operations in Africa to BCL for a total price of $337 million. It happened in October 2014. This amount was later reduced. Due to an agreed price concession requested by BCL and Botswana’s government.

They designed Nkomati mine deal to guarantee the long-term future of BCL’s operations. By securing the supply of concentrate to its smelter in Selebi Phikwe, Botswana. 

“BCL always relying historically on financial support from the government to survive. And, in view of BCL’s financial position, most, if not all of the funding for the Nkomati deal was coming from government. Or  the government had to be guarantee it.

When it became an obligation for BCL to buy Nkomati on 13 September 2016, BCL and the government didn’t made attempts to complete the deal. In clear breakthrough of the agreement with Norilsk Nickel.

 

Botswana’s officials notified

 

In October 2016, they imparted that BCL had been put  into provisional liquidation by the government. So it no longer had any obligations in the front of Norilsk Nickel.

The company “tried on numerous occasions, and through numerous channels, to reach a satisfactory and amicable resolution, but none has been forthcoming. Therefore they have been left with no other option but to purse a resolution through legal channels.”

According to Norilsk Nickel, they served the notice of legal proceedings on Botswana’s attorney general, minister of mineral resources, green technology and energy security, and the minister of finance.

The Government of Botswana is the ultimate shareholder of BCL through its corporate vehicle MDCB. (Metal Bulletin)

 

Facts about Norilsk Nickel

 

Norilsk Nickel is a diversified ore mining and smelting company. Also the world’s leading nickel and palladium producer. It operates industrial facilities in the Norilsk industrial region. And on the Kola Peninsula in Russia, Finland, the United States, Australia, Botswana and South Africa. Norilsk Nickel has its own global network of representative and sales offices in Russia, the UK, China, the U.S. and Switzerland.

 

/0 Comments/by

Shanghai Futures Exchange Today: 2nd week that copper inventories fall; Zinc stocks down 26%

,

Important to know of Today’s flashing news:

  • United Kingdom Gross Domestic Product (GDP)QoQ fell to actual 0.3% (while forecast was 0.4%)
  • UK GDP year on year fell bellow the forecast to actual 2.1% (2.2% forecast)
  • European Consumer Price Index (CPI) YoY grew to actual 1.9% (while forecast was 1.8%)
  • Russian Federation Interest Rate Decision fell to actual 9.75% (while expected was 10.00%)
  • Canada GDP MoM rose to actual 0.6% (while expected was 0.3%)
  • US GDP QoQ rose to actual 2.1% (forecast was 2.0%)

 

Shanghai Futures Exchange

Shanghai Futures Exchange: Zinc inventories, approved stockrooms fell 40,312 tons – or 25.9% – over the past week to 115,040 tons. As of Friday April 28, the biggest reduce between the SHFE base metals happened. 

The most exterior deliveries this week were in Guangdong district. With 29,982 tons, while Nanchu saw the most stock exit from a single repository – 29,177 tons left its sheds this week.

Growing expectations of tightening supply in the base metals could be behind the fall downs seen in SHFE and London Metal Exchange stocks.

“In the opinion of the International Lead and Zinc Study Group (ILZSG), the global zinc market will see a high supply deficit for the second consecutive year in 2017. The ILZSG puts this deficit at 226,000 tons. Which is only a little lower than the figure predicted six months ago. As with lead, supply and demand for zinc are expected to grow by the same amount [namely 2.6%]. If so, the zinc market will be significantly undersupplied for the fourth time in the last five years.” (Commerzbank) (Metal Bulletin)

Past month recollections & positive future expectations

“During the past month, all base metals have had recent supply disruptions. Copper inventories [on the LME] have fallen over 16%. Also, zinc is down 9%, while lead 8% . Finishing with aluminium failure for 6%. Recent supply disruptions  maybe had impact on this.”

“Still, economic data has also been relatively positive. Predicting that this drop is likely to be only a short-term phenomenon.”

 

 

 

Aluminium and nickel stocks up; others see a decline 

SHFE copper stocks fell 10,830 tons or 4.5% over the past week to 229,361 tons with Shanghai district seeing the most stock – 10,183 tons – leave its sheds, while SIPG Logistics saw the most red metal exit a single warehouse with 7,832 tons.

At the same time Aluminium stocks rose. 12,544 tons to 391,578 tons in the week ended April 28.
Lead stocks at SHFE dipped 218 to 72,070 tons as of Friday.
Nickel stocks at SHFE-bonded warehouses rose 439 tons to 84,334 tons as of Friday.
SHFE tin stocks fell 19 tons to 2206 tons over the past week.

 

/0 Comments/by

U.S. refiners expect that strong export will boost margins and alleviate high product inventories

,

Refiners

U.S. refiners have come out of sustention season, betting that big exports to Mexico and South America will help alleviate high product inventories. And backup margins as the critical summer driving season is close.

The first page of profits results from several large independent U.S. refiners. Which showed that they are not chasing U.S. gasoline profits. They already posses high inventories and steady-but-not-spectacular demand. They are actually taking advantage of demand from places like Mexico and South America, where sputtering local refineries cannot meet customer needs.

The biggest Companies

Marathon Petroleum Corp (MPC.N) expects to process more crude than ever in the second quarter, the company said on Thursday.

“The export book continues to be strong.” Gary Heminger, Marathon CEO said Thursday. Taking notice that he expects company exports to grow from about 200,000 bpd earlier this year to 300,000 bpd in the second quarter. They expect it to process about 1.82 million bpd in the second quarter.

– Valero Energy Corp (VLO.N), the largest U.S. independent refiner by capacity, said it expected its 15 refineries to run up to 96 percent of their combined capacity of 3.1 million barrels per day (bpd) in the second quarter. (Reuters)

There is a worry, however, that high run rates may overstep the ability of refiners to export products. U.S. gasoline inventories, which had been drawing down, have rebounded to uncommonly high levels for the season, sapping refining margins.

CEO of CVR Energy Inc (CVI.N), Jack Lipinski, said he fears a repeat of last year. When high inventories crushed margins. The company’s two refineries are landlocked and have no direct access to export markets.

“Even though we are seeing exports increasing, the increase in production is offsetting that.” (Lipinski)

Refinery crude

Refinery crude hit a record 17.3 million bpd last week and capacity utilization rates hit their highest level since November 2015.

“Right now, we are running at summer peak levels. If we stay at this level for several months, rising inventories will overwhelm exports. If we stay at lower levels, then exports can help balance inventories.” Mark Broadbent said.

The four-week average for exports of finished motor gasoline jumped to 643,000 bpd from 395,000 bpd a year ago while exports of distillate fuel oil climbed to 1.11 million bpd versus 1.01 million bpd a year earlier.

Anyway, while gasoline export loadings to Latin America have been anchored in the 600,000-bpd range for the past couple of months, march’s middle distillate export loadings were at an 11-month low. Matt Smith, who tracks cargoes for New York-announced this.

Gulf & East Coast refiners

U.S. refiners in the Gulf Coast, have cashed in on soaring demand for refined products from Mexico, even as margins CL321-1=R have languished at the lowest levels in about seven years seasonally.

East Coast refiners are stepping up exports of diesel despite a regional deficit of the fuel as strong overseas demand. Particularly in Europe, because it is proving more profitable.

  • “It’s a distillate world out there. Ultimately the narrowing in gasoline’s premium to diesel RBc1-HOc1 should prompt more diesel refining, tightening gasoline supplies.” That spread hit a four-year seasonal low on Thursday. 

 

/0 Comments/by

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.”

.

/0 Comments/by

Small price increases for LME base metals; only zinc declines (27.04.)

,

Another morning of wispy price increases today, on the London Metal Exchange. Following average gains of 0.8% on Wednesday.

Zinc was the only base metal to see a decline this morning, falling just $2 per ton. All other metals recorded small increases.

Copper prices were followed by the news that major copper producers BHP Billiton, Freeport-McMoRan and Antofagasta had lowered their production forecasts for 2017 due to operation disruptions. The three-month copper price continued to rise, currently trading at $5,719.50 per ton.

Nickel hit its lowest since June 2016 at the kerb of trading yesterday, but rose $40 per ton during premarket trading this morning.

“On balance, we remain mildly bullish for the base metals’ fundamentals but volume on the LME remains low, so it may take a pick-up in volume before prices become more directional again.” (Metal Bulletin senior analyst William Adams.)

Copper price rallies

 

  • The three-month copper price rose by $4.50 to $5,719.50 per ton – this is the fourth day in a row the copper price has increased.
  • Inventories fell 900 tons to 260,575 tons, a fifth consecutive day of decline. 
  • Sucden Financial noted in its Q2 metals forecast: “Supply disruptions [for copper] 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.”
  • 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 during the quarter ending March 31, following a 2% reduction on its guidance in the fourth quarter last year.
  • Rio Tinto has also revised its 2017 copper production guidance downward after reporting a 37% decline in first quarter copper output due to the significant impact of the strike at Escondida and the production curtailment at Freeport’s Grasberg.

All other base metals rise; Zinc decline

The three-month aluminium price continued its premarket trend of the week with a small increase. It rose $5.50 to $1,969.50 per ton.

Aluminium stocks fell again, but by the smaller margin that we have recently been seeing; they dropped just 3,925 tons to 1,652,200 tons.

Nickel rose $40 to $9,265 per tons, as it tries to recover from freefalling prices over the last few days. Nickel stocks were down 336 tons to 379,002 tons.

Zinc was the only metal to see a price decline. The three-month zinc price fell $2 per ton to start trading at $2,624 per ton.

The three-month lead price saw an increase of $6 to $2,191 per ton and Inventories fell 350 tons to 165,400 tons.

Tin rose $10 to $19,910 per ton, and it looks to bounce back above the $20,000 per ton mark. Stocks for tin fell 10 tons to 3,020 tons.

Currency moves and data releases

  • The dollar index was up 0.01 to 98.96.
  • In other commodities, the Brent crude oil spot price was down 0.62% to $51.13 per barrel.
  • The UK FSTE 100 was down 38.22 (0.52%) to 7,250.50.
  • In data, US crude oil inventories saw a decline of 3.6 million. The stronger-than-expected decline is crude oil inventories is boosting oil prices, which in turn exerts upward pressure across the metals complex.
  • The Gfk German consumer climate for April was 10.2, up on the previous rating of 9.8. The Spanish unemployment rate for Q2 of 2016 was 18.8% – higher than the forecasted 18.6%.
  • The economic agenda is busy today with a host of US data out, including on core durable goods orders, unemployment claims, goods trade balance and pending home sales.

 

/0 Comments/by