LME Metals, Nickel, Aluminum, zinc, Tin, Copper

SHFE morning trade: Copper up due to Lower production in Chile

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Main Economic Events Today:

  • China Industrial Production y-o-y fell to actual 6.5%, while expected was 7.1%
  • United Kingdom Prime Minister Theresa May Speaks

This Week:

  • Empire State, Philly Fed Manufacturing for May
  • April China Industrial Production
  • Euro Zone Q1 GDP – Revised Reading
  • K. April CPI, Employment & Retail Sales
  • Japan Preliminary First Quarter GDP

 

Shanghai Futures Exchange

Firstly, copper prices on the SHFE recovered during morning trading on May 15. Due to the news that China had announced more funding for its One Belt One Road initiative. Copper price was as well impacted by reports of lower production in Chile.

The most-traded July copper contract on the SHFE rose 210 yuan per tonne to 45,240 yuan per tonne as of 10:59am Shanghai time.

Secondly, Chinese president Xi Jinping said One Belt One Road plan aims to connect China with Europe, Asia and Africa through various infrastructure projects.

 “The Belt and Road initiative, which was first proposed in 2013, offers the world’s second largest economy a chance to consolidate its political presence in the region. Additionally, the initiative provides China’s battered commodity intensive sectors, many of which are struggling to contain overcapacity, a lifeline to remain relevant for years to come.” (CBA Commodities)

“China has already committed $50 billion to date and that could grow exponentially in the next 5 years. The initiative, which could cost over $1 trillion, is clearly positive for commodity consumption. We note that construction will take place over decades. Realistically gather momentum in the 2020s and will inevitably face roadblocks from political interests of the 60 countries involved.”  (Metal Bulletin)

Thirdly, Cochico announced that copper production in Chile in 1H17 was down 14.6% year-on-year to 1.19 million tonnes, due to the strikes occurring during the period.

LME’s three-month copper contract was up $13 per tonne to $5,581 per tonne as of 03:55am London time.

SHFE, LME copper stocks fall 

Observing the open interest of the July copper contract, it was at around 219,134 position on Monday morning. Following, losses in the SHFE-LME arbitrage held at around $80 per tonne last week. Demand is keeping healthy levels due to the peak season. 
Also, deliverable copper stocks at SHFE-approved warehouses fell 20,238 tonnes or 9.4% week-on-week to 194,993 tonnes as of Friday May 12.
In the meantime, LME copper stocks fell by 7,350 tonnes to 329,375 tonnes on May 12.

Base metals broadly lower; Aluminium bit higher 

Fourthly, the SHFE July aluminium price rose 1.05% or 145 yuan to 13,975 yuan per tonne. Following, SHFE July zinc price dipped 0.09% or 25 yuan to 21,590 yuan per tonne.
Observing the July lead price, it slipped 1.05% or 170 to 15,965 yuan per tonne.
In conclusion, the SHFE September nickel price was 180 yuan or 0.23% lower at 76,830 yuan per tonne. And finishing with the SHFE September tin price who fell 1,240 yuan or 0.87% to 140,990 yuan per tonne. 


Currencies & data

 
The Brent crude oil spot price up 0.85 to $51.62 per barrel. Texas light sweet crude oil spot price also gained 0.79 to $48.59 per barrel.
Observing the Shanghai Composite, it was up 0.36% to 3.094.53. Most noteworthy, US Empire State Manufacturing Index and NAHB Housing Market Index will be released later today. The dollar index decreased 0.01% on Monday morning to 99.19.

Nigeria: Exxon Mobil Oil workers started a strike, dissatisfied by work conditions

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Summary of Today’s Important Economic News:

 

  • Retail sales set to recover in second quarter
  • Fed will keep eye on inflation data
  • Global stock mixed ahead of key U.S. data
  • Oil in track for weekly gains of 3%
  • S. – China trade relations ‘hitting a new high’
  • Gold prices move higher amid U.S. political turmoil

For further info on these subjects, visit: http://www.investing.com

Nigeria Exxon Oil : Bad working conditions

The Exxon Mobil Corporation workers in Nigeria started a strike. Being dissatisfied with the current working conditions, and the way they are treated in their daily operations. The idea of starting the strike came from these bad handling of everyday operating routines.

 

Firstly, the Labor union of Nigeria gave so many critics to Nigerian Oil companies. Because of their rude behavior on workers. The use of workers in such disrespectful way lead not only to one, but to a number of strikes in last few months.

“Members of the union started strikes in December, when 150 workers were sacked from their work.”

The chairman of the Lagos zone of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Abel Agarin, said his workers protested for the first time in December. They were hurt by the news that numbers of their cooperates lost jobs. He said 82 of these sacked individuals were PENGASSAN’s workers.

“We want to bring them back to work, and if that is not possible we want a proper severance package for them.” said Agarin

He also led around 50 protesters in the commercial capital, supporting their ideas.

Places where previous strikes took place

PENGASSAN said strikes took place in a few cities and Nigeria states including:  Lagos, Bonny, Akwa Ibom and Port Harcourt.

There weren’t any impacts on Oil production. Strikes are not affecting the real oil output. Said a Exxon Mobile representative.

“It is still to early to say if strikes will affect the Nigerian Oil production. As time goes by, there will probably be some real consequences. “

Regarding a period of late 2016, and strikes which took place then, we can see that the previous strikes did actually impact the outputs. Not only they affected the output, but they also lead to weeks-long shipping delays. Causing the delayed trade.

 

LME: Friday base metal prices

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Today’s trade was broadly higher for all the base metal prices. The prices saw a little, but positive movement. Yesterday, prices were following a certain rally during the day, but they dipped just before the close.

Copper is currently trading at $5,560 per tonne. It hit highs of over $5,600 per tonne yesterday afternoon, but fell down at the end of a day.

Speaking about the three-month nickel price, it is starting to recover from last week’s falls. It was trading up at $9,355 per tonne this morning.

Regarding Tin prices, they saw a small decline. All  the other base metals recorded minimal price increases.

Copper price aiming higher

Copper is the most ”popular” over all the base metals currently. Firstly the 3-month copper price was up $17 at $5,560 per tonne.
Copper Stocks fell by 7,350 to 329,375 tonnes.
BHP Billiton is continuing the negotiations for possible sale of Cerro Colorado copper mine in Chile.

“We still see uncertainties over whether domestic consumption will support the decline of inventories, and whether the peak consumption season will turn out to be bullish.” (Metal Bulletin)

China’s deleveraging has had great impact on Market enthusiasm. As well as the optimistic trends.

Base metals increase; decline for tin

Firstly, observing the three-month aluminium price, it was up $12 to $1,887 per tonne. Aluminium stocks were down 8,650 tonnes to 1,556,150.
Secondly, the three-month nickel price is trading at $9,355 per tonne. It is calculated the increase of $45. Following, nickel stocks increased for the fourth day in a row, rising 1,224 tonnes to 380,610 tonnes.

Thirdly, zinc price increased $15 per tonne. It is now trading at $2,606 per tonne. Stocks increased 2,050 tonnes to 345,150. Zinc stocks have risen 10,550 tonnes over the last four days.

The three-month lead price rose $4 to $2,181 per tonne. Stocks rose 350 tonnes to 183,150 tonnes.  Tin was the only base metal to see a decline; the three-month price fell $15 to $19,850 per tonne.

Stocks for tin fell 20 tonnes to 2,310 tonnes after two days unchanged.

Currencies & data

Observing the the dollar index, it was unchanged at 99.64.  The Brent crude oil spot price was down 0.40% to $50.61 per barrel.
In equities, the UK FSTE 100 was up 18.07 to 7404.7. The latest data shows that US PPI data was stronger than expected. At 0.5% month-on-month in April against market expectations of 0.2%.


There is a host of US data out today including CPI, retail sales and preliminary University of Michigan consumer sentiment and inflation expectations, while the EU has monthly industrial production data due.

 

LME Asia week; Hong Kong

 

As this year’s LME Asia Week 2017 draws to a close, reporters and editors who were in Hong Kong during this week round up the key themes and topics discussed at the fifth annual event. Metal Bulletin reported about 10 main topics that were discussed in Hong Kong. They wrote about comments, ideas and CEO’s discussions that happened there, and gave a nice brief summary on this closing.

Visit http://www.metalbulletin.com for further info.

Friday, May 12th on SHFE

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Amid onsets of profit-taking, and a generally bearish sentiment towards demand for the red metal, copper prices on SHFE felt back during Today’s morning trade.

Some traders say:

“Market players took profits after Thursday’s rally, and there is no further stimulus supporting the red metal.”

“The retreat of the whole base metals complex was mainly due to the bearish outlook for the market – weakened consumption and moderate macroeconomics.”

Copper prices movement

 

Firstly, LME copper stocks fell by 2,475 tons to 336,725 tons on Thursday.  It is the fourth running decline within LME-sheds this week. Secondly, SHFE copper prices were lifted on Thursday by reports that the People’s Bank of China is going to release funding on Friday. Which will ease market concerns of tightened Chinese credit.
“PBoC’s attempt to ease short term credit conditions boosted a wave of short-covering, however, the red metal sees limited space to move up further.”
“We still see uncertainties over whether domestic consumption will support the decline of inventories, and whether the peak consumption season will turn out to be bullish.”

“Recent supply disruptions at copper mines were not felt in metal production earlier in the year due to the large supply of copper scrap and seasonally weak demand in the first quarter of the year.” David Lilley (Reuters)
Thirdly, deleveraging in China has adversely affected “enthusiasm and optimism” in the market.  BHP Billiton has started the preparations for a potential sale of its Cerro Colorado copper mine in Chile.

Other base metals

Observing base metal prices, The SHFE September nickel price fell 150 yuan to 75,350 yuan per tonne.  Nickel prices might be under pressure on lower demand and some planned projects starting at the end of May.
Continuing with The SHFE July aluminium price which dipped 30 yuan to 13,710 yuan per tonne.
Later, SHFE June zinc price felt down 290 yuan to 22,090 yuan per tonne.
Speaking about lead, June lead price slid 300 yuan to 15,990 yuan per tonne.
The SHFE September tin price was again flat, staying at same level as yesterday.

 

Currencies & data

Watching today’s market, there are some noteworthy facts out. Firstly the dollar index which  was recently at 99.58, on Friday went down 0.05% as of 03:19 BST.
The Brent crude oil spot price rose 0.06% to 50.79 per barrel while the Texas light sweet crude oil spot price was up 0.38% to $47.85.
The Shanghai Composite dropped 0.24% to 3,073.23.
US PPI data was again better than the forecast, at 0.5% month-on-month in April. Against the market expectations which were at 0.2%.
Later today, we will face the new data from US. Showing CPI, retail sales. Also preliminary University of Michigan consumer sentiment and inflation expectations. Observing EU, it has monthly industrial production data due.

There is a host of US data out today including CPI, retail sales and preliminary University of Michigan consumer sentiment and forecasts for inflation, while the EU has monthly industrial production data due.

SHFE on May 11th; Copper up due to supply concerns; Better market movement

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Shanghai Futures Exchange continued with positive pushes, and copper price went up despite the short pull down at opening time.

Possible supply  restriction gives backup to prices. Also the news about China’s central bank. They will insert some amounts of capital into the open market. These news also renewed confidence and removed fear of the ”market ground”.
Firstly, price of the greatly active SHFE July copper contract rose 130 yuan ($18.82) to 44,920 yuan per tonne. Coming as of 03:17 BST with around 7,690 lots shifting hands. Open interest of the contract was at around 21,530 positions.

 

Over the last 6 days, today will be the first time that China’s central bank will inject a net 20 billion yuan. This amount of capital will go straight into the open market today.

“China’s central bank has resumed capital injections, relieving some recent monetary constraints and boosting financial liquidity. As a result, market sentiment has improved to some extent”  (Fast Markets)

Supply-side disruptions are the ones giving the backup to copper prices these days..

Copper prices increase

 

Secondly, LME copper stocks fell a net 3,625 tonnes to 339,200 tonnes on Wednesday. It is a third successive day of decline within LME-sheds. Thirdly, SHFE copper stocks also fell. While inventories were just down from 1,281 tonnes to 72,930 tonnes on Wednesday.


Copper project in Chile, which was put on hold in March, is cancelled. The company announced these news on Monday. Polish miner KGHM’s Sierra Gorda started this project in the first place.
Following, supply of copper scrap has tightened recently after growing in the first quarter. Meanwhile the breaks at major mines earlier in 2017 are hitting availability of metal. (Based on comments of David Lilley, co-founder of Red Kite Capital Management.)

Other base metals mainly flat; zinc, lead a bit higher

 

Speaking about the SHFE September nickel price, it was flat at 74,700 yuan per tonne. Following,  SHFE July aluminium price was also flat at 13,725 yuan per tonne.
Furthermore, the SHFE June lead price was up 85 yuan to 16,165 yuan per tonne. Finishing, September tin price wasn’t  changed at 139,000 yuan per tonne.

Currencies & data

Observing the dollar index, it was recently at 99.62 on Thursday. Makes it down for 0.03% as of 03:17 BST. Prices of the Brent crude oil spot, rose 0.27% to 50.38 per barrel. The Texas light sweet crude oil spot price was up 0.15% to $47.50.

“Crude oil was buoyed by a fall in US inventories of 5.25 million barrels and front month WTi rallied towards 48.” (Sucden Financial research data)

Looking at the Indices, Shanghai Composite dipped 0.24% to 3,045.3. US import prices for April rose 0.5%. Better than a forecast of 0.2%

 

 

Main Economic Events & LME Today

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Wednesday, May the 10th deserves to be nominated for one of the most tense days regarding this week. So much going on in financial markets, being pulled and inspired by main political events which are causing a little earthquakes all along the global scene. Will euro come to its 6-month highs lifted by Mario Draghi, and which way will the release of James Comey affect U.S. market… And what is happening with London Metal Excchange Prices today, Let’s see:

 

Main Economic Events Today:

  • China Consumer Price Index(CPI) YoY rose to actual 1.2% (1.1% forecast)
  • ECB President Draghi Speaks
  • U.S. Crude Oil Inventories came to actual -0.930M, while expected was -2.333M
  • New Zealand Interest Rate Decision is at actual 1.75%, same as expected
  • Reserve Bank of NZ Rate Statement (the outcome of factors on interest rates..)

 

Top 5 Things In Wednesday’s Market

inspired by http://www.investing.com

  1. Trump dismissed the FBI director James Comey; It was a very shocking move for Washington (and this really weighs on risk appetite)
  2. Global stocks mixed as Comey’s termination HIT western markets
  3. Oil JUMPS 1% on large inventory draw
  4. Disney set to weigh on Dow, Apple pulls back
  5. Mario Draghi might help to lift euro back to 6-month highs

 

LME Base Metal Prices

Dropped again, across the board of this morning. Coming after short term of recuperation at yesterday’s closing hour.

Following the publication of further unimpressive data, this time from China, copper has fallen below $5,500 per tonne and nickel is back below $9,200 barrier.

While the Chinese CPI for April at 1.2% y-o-y was better than 0.9% in the previous month, its PPI at 6.4% was below the previous figure of 7.6% and the expected 6.7%.

”Copper prices have lost upward momentum since mid-February and more recently they have gained downward momentum.”  (Metal Bulletin)

Copper goes below $5,500/t 

Firstly, three-month copper price fell $24 per tonne to trade recently at $5,488 per tonne. Secondly, copper stocks fell a net 3,625 tonnes to 339,200 tonnes. Also the Inventories started to decline on Monday this week, after they rose more than 100,000 tonnes last week.

Based on the reports of the Chinese trade balance, and their imports, Copper prices came under pressure after Monday. When data showed total copper imports into the nation fell to their lowest since October 2016.

Following, the expected second expansion phase at Polish miner KGHM’s Sierra Gorda copper project in Chile, IS CANCELED, the company announced on Monday.

 

Other base metals  

Speaking about Aluminium prices, the three-month price fell $5.50 to $1,865 per tonne. Stocks fell 7,225 tonnes to 1,570,575 tonnes.

“Aluminium looks a tad better but really needs to stay above $1,860 on the downside.” (FastMarkets)

Observing the Nickel, it fell $55 per tonne to $9,160 per tonne. It is hardly struggling to recover last week’s dropdown of more than $500 per tonne…

“Nickel prices will might be under pressure on weaker demand. With steady nickel trade flows from Indonesia, and some stainless steel plants starting from late May.” Nickel stocks rose 660 tonnes to 381,378 tonnes.

Noteworthy, The three-month tin price fell $55 to $19,660 per tonne, with inventories unchanged at 2,290 tonnes.

Currencies & data  

The Brent crude oil spot price was up 0.36% at $49.13 per barrel. Later, the US dollar index was effectively unchanged at 99.43. In equities, that shoes the UK FTSE 100 was down 7.17 at 7,335.04. But the power of dollar these days is not to be neglected.

Speaking about Europe, French and Italian industrial production both bid better than expectations. Especially the French trade deficit, which fell to a €5.4 billion. It bet the forecast.

US April export and import prices, crude oil stocks and the Federal budget balance are due later today. Mr Donald Trump’s decisions are often shocking for people around him as well as for the global market participants. But we can only watch and testify the outcomes by ourselves.

 

Import of Commodities in China gaining way more realistic levels

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Serving as a notice that strong gains can’t last forever and also as a warning that demand is declining in the world’s largest importer of the resources…

Brisk falls in April imports of crude oil, iron ore and copper ore are the real warning that commodity-intensive sectors might be losing some momentum. For example construction and manufacturing, which take the big part of stake in China’s economy.

Nevertheless, there are some short-term factors that can help explaining the declines. It is still way too early, for calling an end to the trend of forceful demand for commodities in the world’s second-largest economy.

Noteworthy, having in mind China’s Oil Sector: The impact of domestic policy respects in China, paying attention to many of the smaller, private refiners. They are believed to have almost exhausted their first quarter crude import quotas.

Second quarter will bring some more moderate import structures. Before 2H17 and the easy recovery of the sector.

Exports

Observing exports of refined fuels.. It fell 25.1 percent in April from March, tumbling to 3.5 million tonnes. (930,000 bpd.)

This lowered the growth rate of refined fuel exports to 15 percent, which is rather down from 22.6 percent in the first quarter of the previous year.

 

Caused by Weather

Iron ore imports plummeted 13.9 percent in April. Almost to 82.23 million tonnes, which makes it the lowest monthly total since October.

April’s imports were also hit by weather-related disruptions in the main exporting region of northwest Australia during March. When many of the cargoes were loading.

Lower iron cost ore from Australia and Brazil will oust domestic supplies. And would in a way serve to boost China’s imports.

The spot price fell to $60.15 a tonne on Monday. Which is down 37 percent from the recent peak of $94.86 on Feb. 21.

 

Coal

Coal imports should have also been hit by weather in Australia, but instead they rose by 12.2 percent from March to 24.78 million tonnes. Taking the year-to-date gain to 33.2 percent.

It’s possible that China boosted imports via rail and truck from neighboring Mongolia.

Coal imports will mostly remain strong, given the current cost advantage their enjoy over domestic supplies. These have been somewhat constrained by Beijing’s efforts to eliminate over-capacity and inefficient mines.

 

Copper grief

Firstly, imports of unwrought copper dropped 30.2 percent to 300,000 tonnes in April from March.  When compared to the same period of previous year it is 33.2 % down.

By now, it was possible to make the argument that China was replacing imports of refined metal with ores and concentrates. But paying further attention, they also plummeted in April.

Secondly, imports of ores and concentrates dropped 16.6 percent from March to 1.36 million tonnes. Which is showing a lack of appetite among China’s copper smelters for imported ore.

Thirdly, copper is often viewed as the canary in the commodity coal mine. And also the continuous downturn in China’s imports would mostly raise the market’s level of worries.

In conclusion, China’s April commodity imports represent a return to what might be described as more normal, stabile levels. Which came after a few months of outsized and unsustainable growth, who seemed a bit like a fairytale.