Report On Base Metals  01/09

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Global demand

Base metals demand is boosted up and supported by the Chinese economy data, PMI index rising to 51.6, from 51.1. This morning the prices were up average 0.1%.

 

Nickel prices were upside than down finishing with the 0.8% gain. Following with tin price up about 0.3%, while aluminium lifts up for 0.2%.

Copper price came off 0.1%, leveling $6,812 per tonne. Lead and Zinc were off 0.2%.
Trade average Volume  is with 6,588 lots as of 07:13 BST.

The Following results are coming after Thursday. When base metals closed at average 1.2% up. Zinc yesterday rose for 2.4%. Nickel and Al were up 1.6%… Tin was little changed…

 

Precious metals

Prices saw a slight volatility, with gold prices at $1,320 per oz. The palladium prices are off 0.2% at $933.50 per oz.

“This came after a day of strength on Thursday when the complex closed up an average of 0.8%, helped by a reversal in intraday dollar strength on benign inflation data. “ (Fast Markets)

 

SHFE

In The SHFE trade this morning, base metals are up across the board with average gains of 0.9%.

Nickel prices rose for 1.8%. Copper prices are lagging behind with a 0.2% gain to 52,740 yuan ($8,013) per tonne, as other metals play catch-up with it.

Changjiang spot copper prices are little changed at 52,540-52,680 yuan per tonne. While the London/Shanghai copper arb ratio is weaker at 7.74 (7.77).

Steel rebar prices on the SHFE are up a whopping 6.1%, while gold and silver prices are up by 0.7% and 0.2% respectively.

Iron ore prices, for January delivery, are up 4.5% at 584 yuan per tonne on the Dalian Commodity Exchange.

 

International markets

 

In international markets, speaking about Oil prices.. Spot Brent crude oil prices are off 0.2% at $52.64 per barrel. The yield on US ten-year treasuries has eased to 2.13%. Due to the German ten-year bund yield, which has fallen to 0.36%.

Indexes

Equities in Asia are for the most part slightly firmer this morning – both the Nikkei and the ASX 200 are up 0.2%. The Hang Seng is up 0.1%, and the CSI 300 little changed, while the Kospi is off 0.2%. In the USA, the Dow Jones closed up 0.25% at 21,948.10 on Thursday.

Euro Stoxx 50 closed up 0.52% at 3,421.47.

Observing the dollar index, it spike up to 93.35 on Thursday, before closing at 92.61, it was recently quoted at 92.77 as it consolidates ahead of today’s US employment report. The report is likely to spark a reaction from traders as they adjust their view on likely Fed monetary policy. A good report could make the market think the Fed will turn more hawkish again. This could give the dollar a lift and that could weigh on metal prices.

Currencies are recent movements are: The euro at 1.1883 is correcting some of its recent gains, the yen at 110.17 is consolidating, as are sterling at 1.2915 and the Australian dollar at 0.7935.

In emerging market currencies, the yuan is stronger at 6.5809 – another sign of confidence in the economy and for the most part the other currencies we follow are flat-to-firm. Although the peso is slightly weaker.

Finishing,

Aluminium and nickel prices have now joined copper prices in pushing the envelope on the upside and zinc prices are close to following.  Furthermore, lead and tin prices are still lagging behind. Good data out of China and a weak dollar are supporting the firmer tones in the base metals. The recent rallies are looking quite stretched, although there have been bouts of consolidation along the way.

A huge part of metal movement depends on dollar. If it avoids rebounding, then the high price levels will likely scale up selling. Then the upside movement is about to grow.

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