Debts slowing down Rosneft acquisition of Essar Oil; Project worth $12.9 billion

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Real tensions

Rosneft  is currently combating to induce its huge acquisition worth $12.9 billion. Story is about India’s Essar Oil Ltd, the very important purchase for Rosneft company. The ”combat” is happening because some of the Essar’s financiers did not yet endorse the deal. Firstly, the main creditors and financial institutions, along with some state-run banks are the ones delaying the project. They carry approximately $500 million of Essar’s debt.

“Tensions between Rosneft and Essar are running high.”

Secondly, there are currently more than a few sources discussing on this subject. Thirdly, part of Rosneft is controlled by Kremlin officials, and they consider this arrangement substantial for the expansion in Asia’s energy market. They aimed to close this deal before. In period of late 2016. Following, even June as aim for finishing these deals, seems unstable.

 

Acquisition

However, the Rosneft officials expect the acquisition to go through. Some of the sources are saying that Rosneft sent some threatening viewpoints to Essar.  Stating they will pay the minor price, if the odds about these debts extend.

“We are working on obtaining the approvals. We are hopeful that the deal will be completed in the upcoming few weeks.” (Essar spokesman said) (Reuters)

Furthermore, at a Wednesday conference, Pavel Fedorov – Rosneft Chief Financial Officer, said ”I do not expect the purchase to finish by the end of June this year.”

Fourthly, there are six institutions holding up the transaction. They are: IDBI Bank, Punjab National Bank, Syndicate Bank, Indian Overseas Bank, Life Insurance Corp of India and non-bank financier IFCI Ltd.

 

Another industry source

Different point of view:

”Rosneft wanted to finalize this deal in early June. At the St Petersburg Economic Forum, where Indian Prime Minister Narendra Modi will meet Vladimir Putin. Despite being the previous idea, it had now pretty dwindled.

In competition to buy Essar, it was Saudi Aramco against The Russian Rosneft. The two of these are main competitors in global oil exports market.

Deal will give Rosneft a 49 percent stake. The second 49 percent will be divided between Swiss commodities trader Trafigura [TRAFGF.UL] and Russian fund United Capital Partners. The billionaire Ruia brothers will retain a 2 percent stake. VTB bank of Russia advises this transaction.

“The process of closing the deal is in its final stages. And will come to a conclusion soon.”  Spokesman for Trafigura said, while UCP declined to comment. (Reuters)

 

Resolving the Bad Debts

Also, this deal is diligent for Modi’s government. It will clear India’s $150 billion in bad debt.

Noteworthy, Essar Oil India owed about $5.5 billion to almost 30 Indian lenders. Other institutions besides these 6, have approved the transfer.

Observing into these six institutions which are blocking the deal, Syndicate Bank was expected to clear the deal in 10 – 15 days.  Finishing, Indian Overseas Bank source said that they are working on no-objection confirmation.

 

”Debt talks”

In conclusion, debt talks were complicated due to some lenders to whom Essar’s parent still ows money. The parent company is Essar Global Fund Ltd.

“Essar Global Fund planned to use the proceeds to clear half of the group’s debt, which CEO Prashant Ruia has put at about $13.5 billion. “

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Wintershall question retains Libyan oil output, as it tops 800,000 bpd

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Oil production in Libya

 

For the very first time since 2014, Oil production in Libya came to 800,000 bpd. Which makes it the highest level in 3 years. The info is from National Oil Corporation report which came out on Wednesday. The hack question of Wintershall, the German Oil film was stating that Libyan oil production closed at additional 160,000 bpd. The real Libyan output can reach the level amongst 1.1 million and 1.2 million bpd. Only in condition that officials are going to remove political obstructions. 

 

“Libya could produce between 1.1m to 1.2 million bpd. Regarding the period till the end of the year. This will happen only if Oil flows loosely & free. We require Serious National efforts.” (Mustafa Sanalla) He gave a comment on this subject for FT. Mr Sanalla is the chairman of Libya NOC.

 

Despite the output seriously recovering in forthcoming months, it still is at less than 1.6m barrels per day. These levels were normal in 2011, when M. Gaddafi crashed the uprising trends. Armed conflicts and political chaos destroyed the output trends which were smoothly but steadily rising in 2011.

 

OPEC

 

OPEC countries are planning a meeting on May 25th. That is a day when they will decide on whether to prolong output cuts. Knowing this, officials are watching Libyan outputs closely. While most producing countries have brought up the output cuts, Libya is released of these agreements. The inconsistency with Wintershall on the operator’s production will be put on Libyan state. (NOC) Also, the resulting debts have to go back to the levels from 2010. At least. These agreements have shut more than 160,000 b/d.

 

The NOC plans

 

The NOC plans to switch the concession agreement it has with Wintershall. About a production-sharing contracts, aiming to reduce the German company’s production share for more than a half. It considers that Libya, being under pressure from an oil price collapse, already is missing out on revenues of huge value that provide the spine of it’s economy.

UN Presidency Council government in Tripoli negotiated about the agreements on further (un)blocks in oil production. Which gave them a power to discuss on country’s agreements and deals with foreign companies.

 

Wintershall attitude

 

Crude Oil Exports form Zueitina Terminal were not loaded, so the state forced Company  to shutdown the production.

Zueitina Terminal location is in the Central Northern part of Libya on the Mediterranean Sea cost. It consists of offshore loading berths for oil tankers and LPG carriers. The main cargoes handled are crude oil, naphtha, butane and propane.

 

“It would not be an economic exploitation of the petroleum resources . . . to continue production without generating revenues but still being obliged to carry all production-related operational expenses.” (Financial Times)

 

Finishing, The Wintershall did not assign an export distribution since March, due to the previous disputes. (NOC)

“There is no claim over money allegedly owed by Wintershall. Wintershall has always met its obligations towards the Libyan state.”

“Our concession agreements with the state of Libya are still valid and in full force. We are in contact with NOC about a number of issues.”

In conclusion, Libyan Oil outputs have been affected mostly by country’s policies and agitated past which definitely has a deep consequences. As well as on Oil outputs, it affects every aspect of Libyan economy. It needs time to recover, and collaboration with foreign companies will help.

 

 

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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%

 

 

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U.S. Oil Imports Decline; Crude Inventories tumble;

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Crude Reserves

Observing the U.S. crude reserves, they had the biggest one-week fall down since December. It happened last week as imports fell down roughly. Furthermore, inventories of refined products also declined. Helping aliment of oil prices that were down by worries about oversupply.

Crude inventories USOILC=ECI fell 5.2 million barrels in the week to May 5. EIA data showed, rather compared with expectations for a decrease of 1.8 million barrels.  Crude stocks were the lowest since February. Leveling at 522.5 million barrels.

Regarding U.S. crude imports USOICI=ECI, they dropped in previous week by 799,000 barrels per day. Which makes it the largest weekly drop since the middle of February. It came to just 6.9 million bpd. Since the beginning of March, it’s happening for the first time that they have been below 7 million bpd.

Stocks at the Cushing, Oklahoma, conveyance center for U.S. crude futures USOICC=ECI went down to 438,000 barrels.

 

OPEC; Non-OPEC

Speaking about Crude futures, they rose. Based on the data which came after overpassing weeks of pressure.. Mostly over worries that a deal between OPEC and non-OPEC producers about cutting the outputs may not have expected effect. And was not having the desired impact on market prices.

By 11:12 a.m., U.S. crude futures CLc1 were up $1.30, or 2.8 percent, at $47.18 a barrel, and Brent crude LCOc1 rose 2.5 percent, or $1.25, to $49.98 a barrel. (Reuters)

However, U.S. production went up again, and refining runs declined. This made and effect of giving the analysts a pause. They didn’t have to worry about the market’s brisk increase.

 

Forecasts

“The highlited crude oil drawdown number is doubtless supportive. However, it could act something like a shooting star.

The refinery usage-rate has come pretty down. Due to moments after topping out, a couple of weeks ago.” (John Kilduff)

Refinery crude runs USOICR=ECI were down 418,000 bpd. Their utilization rates USOIRU=ECI declined by 1.8 percentage points to 91.5 percent of overall capacity. Happening right after hitting a record 94.1 percent  in the period of three weeks earlier. This is all based on EIA data.

Gasoline stocks USOILG=ECI fell 150,000 barrels.

Distillate stockpiles USOILD=ECI, they also include diesel and heating oil. It has dropped 1.6 million barrels. In comparison with expectations for a 1.0 million-barrel draw.

Notably, U.S. crude production continued to bloom, rising to 9.31 million bpd. While only a week earlier it came from 9.29 million bpd.

 

Outputs still growing

“Growing oil output in the U.S., which achieved its highest level since August 2015, will remain a spiny sharp issue for price bulls.”  Abhishek Kumar was commenting this subject.

He is a senior energy analyst at Interfax Energy’s Global Gas Analytics in London.(Reuters)

U.S. Oil outputs are making a fuss with global Oil supplies and Oil prices. Will OPEC countries succeed in cuts and market rebalance, only time will show.

 

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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.

 

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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.

 

 

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Moon Jae-in is the new President of South Korea !

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The Result

Moon Jae-in convincingly won South Korea’s presidential election today. He is a liberal politician. This victory will end nearly a decade of conservative ambient, and fetch more conciliatory approach towards North Korea.

Moon is going to end months of political turbulence. Which earlier brought to parliament’s knockdown of conservative former President Park Geun-hye over an extensive corruption scandal that happened in Marh.

Park is the first democratically elected politician in South Korea who finished her career in office, causing a wave election to choose her heritor.

Having won the election Moon promised he will lead a country in the era of the new spirit, changing the scandalous atmosphere.

“I will make a just, united country. I will be a president who also serves all the people who did not support me.” (Reuters)

With 48 percent of the votes, Moon was afore with 39.6 percent.

The turnout of voters was 77.2 percent. Making it the highest in 20 years.

Crushed Parliament

 

Moon is to be sworn in for a five-year term on Wednesday. But he said the showy inauguration ceremony is not necessary. Because he wants to start working straight away.

He will very soon name a prime minister. Also, a prime minister needs parliamentary approval.

In 2012, in the previous presidential election, Moon lost from Park. His ideas favor dialogue with North Korea about slowing down the tension over missile program.

He aims to renew important country’s conglomerates. Etc. Samsung and Hyundai; Afterwards, boosting fiscal spending to create more jobs.

Moon has criticized previous governments for failing to stop North Korea’s weapons uprising. And he thinks that is the subject of a huge matter for the country.

 

Moons victory was mainly supported by young people. Who saw his potential of changing the atmosphere. His supporters participated in huge, peaceful rallies during the previous months, asking Park to step off.

Only 22-25 percent of people in their 60s and 70s voted for Moon. Which shows clear generations gap in the country. And that is great, because it shows healthy appetite for changes, coming from the young people.

 

South Korea as a priority !

 

Moon, whose campaign promises include a “National Interest First” policy, has struck a chord with people who want the country to stand up to powerful allies and neighbors. He wrote in a book in January which says South Korea should learn to say “no to America”.

Following, Moon said that South Korea has to set to a more active diplomatic role about North Korea’s nuclear threat. By no means watch idly as the United States and China talk to each other.

He considers better inter-Korean relations are necessary to provide country’s security.

“Things are not right to resume the so-called Sunshine Policy, as the U.S. and China turned more hostile towards North Korea.” (Koh Yu-hwan, Moon’s foreign policy adviser)

 

THAAD system

Observing the bigger picture, Moon’s election could also complicate the growth of the THAAD system. U.S. military and Seoul agreed on this system about a year ago.

In conclusion, Moon said they made this decision too fast. And he thinks the next administration has to have the final say on whether to deploy it.

 

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Japanese Companies closer to higher profits; Due to Surging metal prices

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 Top 5 Important in Today’s Market:

 

  • Wall Street volatility index at 23-year low
  • Global stocks higher as traders look for next catalyst
  • Dollar powers ahead on June rate hike bets
  • Oil extends rebound as OPEC hints at supply cuts beyond 2017
  • Bitcoin tops $1,700 for first time

 

For more info on these 5 visit: www.investing.com

Main Economic Events today:

  • Australia Retail Sales MoM fell to actual -0.1% while predicted was 0.3%
  • United States JOLTs Job Openings rose to 5.743M, while expected was 5.655M

 

Mitsubishi & Mitsui

Heightened by elevating Iron one price, as well as the Coal prices, Japanese biggest trading houses (compared by assets) came back to profitability. In this financial year, at the end of March.

Many years Japanese top five trading houses were trying to change their businesses. In order to try diversifying their work into non-cyclical. But after long period of time they have confirmed and underlined the vulnerability and sensitiveness of their businesses. Because they still operate in ”the world of commodities”.

Regarding Today’s reports, Mitsubishi gave data about its profits. Which was 440 billion yen ($3.88 billion) in the last financial year. Rather than loss of circa 150 billion yen from previous year. While the second biggest trading house Mitsui reported a 306 billion yen profit. Which is up from an 83 billion yen loss, from year earlier.

 

Other Corps of the Japanese Big 5 family:

 

Today also, Sumitomo Corporation reported profit for the financial year went up for more than double. Taking off to over 170 billion yen. While Marubeni said their profit gain was a 150 percent, to 155 billion yen.

Itochu Corp, the least dependent among the big five trading houses on resources, last week reported record profit, partly driven by the rise in prices.

Their forecasts, for all the 5, are strongly positive for the following financial year. They also expect them to improve. Despite some prices decline trends in forthcoming weeks.

Japanese traders think that the China’s refreshed appetite for raw materials, would desirably lead to higher commodity prices. These opinion is also respected amongst the most global miners.

Regarding the year before, the top 5 trading houses gained up a total of about 1 trillion yen ($8.9 billion). These were in write-offs due to a slump in valuations. Mitsubishi and Mitsui were then announcing their first annual losses since they were founded. And they were founded after World War Two. Which represents them as very serious operating businesses.

 

Global trends

Observing the global trends anyway, commodity prices are very volatile.

The price of coking coal went up for more than three times. In period between March and late November 2016. Afterwards which it halved through March 2017. In the period of previous 2 months, iron ore prices have also came off roughly.

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Asian morning trade on May 9th

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Tuesday May 9 is a day when copper prices on the SHFE went higher, speaking about Asian morning trade . There is definitely some back up in the release of China’s better-than-expected trade balance. Anyway, gains were suppressed by concerns of weakened demand from the world’s largest copper consumer.

Price of the most active SHFE June copper was up 70 yuan ($10) to 44,720 yuan per tonne. Regarding as of 03:18 BST with around 11,510 lots changing hands so far. Open interest of the contract was at around 35,660 positions.

China’s trade balance

 

China’s dollar-denominated trade balance for April stood at $38.1 billion. This is exceeding a forecast of $35.3 billion. And especially March’s balance of $23.9 billion. That is a sign of healthy boost up in imports as well as the exports.

Every way, copper prices were under pressure after the release of disappointing import data from China. These data showed total copper imports into the Asian nation fell. And they fell to their lowest level since October 2016. China’s total copper imports for April fell 33% year-on-year to 300,000 tonnes. Making them down from 450,000 tonnes in the same month last year.

“This was tempered by a strong increase in copper concentrate imports, up 7% y-o-y nevertheless ongoing supply disruptions impacting concentrate availability. Everyway, the fall in refined copper imports revived concerns about weak demand at the world’s largest consumer.” (ANZ)

In the meantime, the dollar had a step back this morning – falling 0.03% to 99.11 as of 03:18 BST . Also giving fine support to base metals prices.


Nickel prices UP due to reduced output

Firstly, The SHFE September nickel contract surged 350 yuan to 74,550 yuan per tonne.
“Nickel prices have been under pressure throughout April. This increased market participants’ appetite for dip-buying. Specially on top of which, nickel’s output was largely reduced in April.”
Secondly, China produced 12,580 tonnes of nickel in April. Which is down exactly 3,220 tonnes y-o-y. And 770 tonnes from the prior month.

“Following, the market sees a low stainless steel inventory prone with traders. There was a wave of rallies in April to May 2015 driven by low availability of stainless steel stocks in traders’ hands. So they needed to build up stocks. It is possibly an indication of better nickel demand in recent future.”

 

Other base metals going positive

Thirdly, June aluminium price was up 15 yuan to 13,675 yuan per tonne. Observing the June zinc price, it rose 135 yuan to 21,905 yuan per tonne.

In the meantime, june lead price inched up 25 yuan to 15,945 yuan per tonne. Finally, the September tin price surged 1,590 yuan to 139,990 yuan per tonne.

Currencies & data

Speaking about oil prices and currencies, the Brent crude oil spot price declined 0.2% to $49.32 per barrel. While the Texas light sweet crude oil spot price was down 0.21% at $46.42.
Observing equities, the Shanghai Composite dipped 0.16% to 3,073.76.  In data, EU Sentix investor confidence for May was better than expected at 27.4 – smashing expectations of 25.3 and up from 23.9 previously. April’s US labour market conditions index was at 3.5, remotely under the precedent month’s reading of 3.6.

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Futures overview on May the 8th: Copper drops to 5-month low

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Today’s market had some very stressful outcomes. Volatility was huge, and main base metals and commodities prices were changing their movements unexpectedly, in a way that predictions were mostly positive.

 

Copper

Comex copper prices started trading in the new week at the lowest price since December. Among signs of weak global demand, focusing particularly on Asia. 
Speaking about copper for July delivery on the Comex division of the New York Mercantile Exchange fell 4.25 cents. Which is same as 1.7% to $2.4770 per lb. Earlier, the contract touched $2.4760 per lb. And it was the lowest since December 27.

Gold

Tracking precious metals, especially gold, Comex gold for June settlement was gaining $2.90 or 0.2% to $1,229.80 per oz.
Over the weekend, Chinese imports of unwrought copper and copper-fabricated products fell 4.4% year-on-year in April. Following, total imports for the first four months of 2017 were down 22.9% compared to the same period of last year. Generally, total imports in the first four months of 2017 of 1.88 million tonnes were down 22.9% year-on-year.

Chinese import demand, which was pretty weak, coupled. With mounting inventory stocks demonstrate soft global demand nevertheless the market moving into the summer months where consumption peaks.

“While we remain constructive on copper over the very short term, our final affinity has seriously been tempered by 1) the deterioration in the technical picture. 2) the negative micro dynamics. And 3) the continued poor investor conviction in the base metals complex,” (Metal Bulletin)

European market

In Europe, the election of Emmanuel Macron as the French president should lead to the stabilisation of the political scene. Malcolm Freeman, Kingdom Futures, noted:

“The new French president Macron will slightly calm European nerves. And unlike the USA and President Trump it looks it will be a case of no real change. Also the risk of the breakup of the EU has taken a step back which will meaningly calm investor’s nerves.”

Members of the metals industry gathered for LME Asia Week in Hong Kong this week, key topics was about launched discussion paper and finding a balance between traditional and new LME users.

Currencies & data


Firstly, The dollar index was up 0.39 to 98.96. Secondly, in data, US unemployment claims for April came in at 238,000. It is the amount below the forecast of 246,000. Thirdly, preliminary non-farm productivity and unit labour costs during the first quarter came in at -0.6% and 3%, respectively.
Following, EU Sentix investor confidence took a value at 27.4 for May. Which is up from 23.9 in the previous period.
Today is the day when UK Halifax house price index and BRC retail sales data will come out. US labour market conditions are also specific.

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