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Base Metals & Oil today

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Economic events in today’s market:

  • Reserve Bank of Australia (RBA) Rate Statement
  • UK Services Purchasing Managers Index (PMI)
  • Australia Interest Rate Decision

 

Short review of metal prices today  

 

Speaking of today’s trade, base metal movement & their volatility is mixed. The three month copper price rose up for 0.2%, leveling the $6,939 per tonne. Following, the lead price is 0.1% up. While the other base metals see a downwards movement with losses. Nickel prices are down for 0.2%, while the tin and lead prices are 0.4% lower.

Total trade volume today is average. Observing yesterday, monday’s trade came out with slight gains in copper and nickel. Aluminium prices fell for 1.1%.

Currently, precious metals are up total 0.2%. Spot gold price rose for a 0.2%, while palladium prices are also 0.2% up. Silver is up for 0.1%.

In SHFE Today, steel prices were 0.1% up. The gold and silver prices grew for 0.3%, and 0.6% respectively.

Observing the indices, and asian equities this morning.. Firstly, we notice the Kospi off 0.2%. Secondly, the Nikkei down 0.6%. Thirdly, the ASX 200 little changed, while the Hang Seng is up 0.2%. Finishing with the CSI 300 up 0.5%.

 

U.S. Oil industry is recovering from Harvey; Gasoline prices are slipping

 

Gasoline prices in the U.S. fell down, as a result of devastation which Harvey caused. Now the pipelines, shipping channels and all the capacity is easily recovering and restarting their operations.

According to U.S. guard reports, the Gulf Coast is recovering as Harvey had a great impact on refining capacities all over the shore. They still may are some restrictions on vessel drafts.

 

Pipelines

Key pipelines for fuel should be restarted. The production of oil in oil refineries should also improve the outputs.  

“ Harvey dumped as much as 50 inches (127 cm) of rain over Texas and Louisiana, forcing officials to close or restrict operations at ports from Corpus Christi, Texas, to Lake Charles, Louisiana. It also forced the closure of nearly a quarter of the nation’s oil refining capacity.” (Reuters)

 

In conclusion, while base metals are slightly volatile, some are still showing the upwards trend. Oil market in U.S. is recovering from Harvey impact, while this also is affecting the global market and the global oil supplies.

 

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Short report on Base Metals Trade Today

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Speaking about base metal market on September 4.. We see copper up for +0.9%, nickel +0.9% and tin 0.2%. All the prices pushing higher.

On the other hand, the rest are weaker. Or little changed with aluminium off 0.8%, zinc off 0.5% and lead flat.

After Friday, Today’s volume of trade is high, with 14,593 lots traded as of 07:15 BST.

 

Precious Metals

Precious metal prices are up 0.9% on average this morning. Together with spot gold prices up 0.9% at $1,337.23 per oz. Silver and the PGMs up by similar percentages.

This follows a strong day on Friday, especially for palladium where prices rallied 4.8% to $980 per oz. While gold prices closed up 0.3%, silver and platinum closed up 0.8%.

 

SHFE

In Shanghai Futures Exchange today the base metals are for the most part stronger. Going with average gains of 1%. Copper prices up 0.8% at 53,150 yuan ($8,120) per tonne. Most noteworthy, nickel prices are the strongest. They are up 2.9%, while lead prices are up 1.7% and zinc up 1.2%. On the other hand, tin prices are little changed and aluminium prices are off 0.6%.

 

“Spot copper prices in Changjiang are up 1% at 52,900-53,230 yuan per tonne and the London/Shanghai copper arb ratio is weaker at 7.69 (7.74).” (Fast Markets)

Steel rebar prices on the SHFE are up 2.4%, while gold and silver prices are up by 0.7% and 1.3% respectively. Iron ore prices for January delivery are off 0.7% at 573.50 yuan per tonne on the Dalian Commodity Exchange.

 

Speaking about the international markets, spot Brent crude oil prices are off 0.9% at $52.29 per barrel.

And the yield on US ten-year treasuries has climbed to 2.17%, while the German ten-year bund yield is little changed at 0.36%. (Fast Markets)
The Chinese yuan is currently at 6.5447. Which is at its strongest since June last year.  This suggests confidence in the economy. Most of the other emerging market currencies we follow are firm, suggesting little risk-off appetite.

Aluminium, Zinc, Copper and nickel prices are trading at really high levels, in comparison with previous months. Tin and lead prices are lagging behind, but the volume is at high level in global.

Having geopolitical events in mind, there may be some diversification going on amongst investors. Trading is likely to get intensive as higher prices attract profit-taking.

 

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Base Metals forecasts, China’s demand; Weekly overview

U.S. GDP Statistics & Data

By the official info which came out today, the U.S. economy grew faster than initially reported. Observing the period of the first three months of 2017, statistics data show that U.S. economy actually reached the levels among expected. It eased concerns about a potential slowdown in the U.S. trading & economic movements.

According to the Bureau of Economic Analysis’s, GDP went up at an annualized rate of 1.2% in the first three months of 2017. Which makes it well above the previous reading of 0.7%. The 0.7%  was the slowest period of economic growth since 2014.

 

Currencies & commodities

The dollar peaked to a four-day high. Meanwhile it pressured commodity prices across the broad. Mostly as expectations for a June rate hike rose to its highest level this week .

Commodity prices went up, lead by strong dollar’s growth. Which gives the support to the opening markets in Tuesday. Having in mind that Monday is the Memorial Day, and the trading is closed. Tuesday will hopefully be the green light for most of the base metals. Supporting their prices and giving the traders green light for doing businesses.

The GDP growth, which was stronger than expected, can easily lead to the higher commodity prices on Tuesday. The construction power in U.S. as one of the world’s most important economies, could definitely lead to higher demand for base metals.

More than 80% of market participants expect the Federal Reserve to boost its benchmark rate in June, compared to below 70% of traders in the previous week.

The U.S. dollar index rose by 0.20% to 97.34. Which is a very positive movement compared to the previous couple days. When dollar index was facing a downward trends, and that way causing the negative market ambience.

Most noteworthy, copper price saw a downwards trend today, falling for 1.14% to $2.568. Observing the natural gas volatility, it actually rose by 0.76%. Gaining levels of  $3.30.

 

China’s Base Metals Demand

Based on the numbers which show China’s statistics & base metal imports, as well as its use of the base metals in industry, it is likely possible that Q2 & Q3 global base metals market is going to be impacted by China’s strong demand.

Industrial metals markets slightly improved in China, which could possibly lead to the price trends to become higher.

The prices of base metals today were in an upwards trend. Both base metals prices and ferrous metals prices have been positively affected.

China’s role in the industrial metal markets is clear. China has a huge stake in the global output, which depends on its production. But it also has a huge impact in markets if it shows that China’s capacities need more of commodities to cover its needs in terms of demand. Therefore, monitoring trends in the Chinese economy is very relevant.

Beijing is providing its policy of recovering the environment & gaining lower levels in production of base metals if possible. That is causing China to import more of the metals from overseas, in order to fulfill its capacities. Which will probably lead to the higher base metal prices at the start of Tuesday’s ”journey”.

As mentioned before, Monday the 29th is Memorial Day. It is the United States Holiday. It is holiday also for China, due to Dragon Boat Festival. While the U.K. celebrates the Bank Holiday.

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Oil price drops; Base Metals down

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Main economic events in Market Today:

  • U.S. Core Durable Goods Orders (MoM)(Apr) fell to actual -0.2% while forecast was 0.4%
  • U.S. Gross Domestic Product (GDP) QoQ fell to actual 0.7% while forecast was 1.2%
  • U.S. GDP Price Index QoQ rose to actual 2.2% while forecast was 2.0%
  • U.S. Michigan Consumer Expectations came to actual 88.1 while the forecast was 87.0
  • European Central Bank Coeure Speaks

 

Base metals were mostly lower during Asian morning trade today. The Oil price impacted even the base metals movement, and it put a cap on copper price.

“On Thursday, base metals prices had rallied then dropped after the OPEC [Organization of the Petroleum Exporting Countries] announcement and after the dollar strengthened. LME copper prices were supported by issues at Grasberg but gains were checked by concerns over Chinese demand.” (Mailyard Futures, China)
SHFE copper prices will probably continue fluctuating around 46,000 yuan per tonne.

OPEC countries agreed on May 25th about extending the output cuts. However, this had a huge fast impact on Oil prices in negative way. The hedge funds reacted right away, and the global oil price went lower than predicted.
“Since May 15, when the Saudis and Russians announced their intention to extend the cuts for nine months rather than six, prices gained more than $2 in anticipation of an agreement today. Now, prices have roughly returned to May 15 levels,” SG added.

The Brent crude oil price dipped as low as $51 per barrel on Thursday, the lowest since May 15.

Grasberg copper mine strike

Freeport McMoRan Inc said Thursday that mining and milling rates at its Grasberg mine are affected by the extended strike. Also by a “large number” of approximately 4,000 absentee workers. Who were deemed to have resigned.

Increasing labor tension is a further disruption for Freeport. Involved in a long dispute with Indonesia over rights to the giant mine, which has cost both sides hundreds of millions of dollars.

Copper prices leveled three-week highs yesterday.  Concerns about extended disruptions at Grasberg triggered these movements.

“As a result, a large number of these workers were deemed to have resigned, consistent with agreed industrial relations guidelines and prevailing law…”

”When asked to comment, the Union officials were not available.” (Reuters)

The most of Freeport’s 30,000-strong Indonesian workforce is “productively and safely” working.

On May 15, Freeport said the strike is not legal and “voluntary resignation is the consequence” for workers ignoring demands to return to work. The workers who were absent for five consecutive days. (Reuters)

Workers now considered “resigned” are in addition to an estimated 2,000-3,000 workers Freeport placed on absence as of mid-April. At that time, approximately 10 percent of its 32,000 member workforce was “demobilized” under aims to cut the costs

The SHFE September nickel contract fell down for 700 yuan or 0.9% to 75,220 yuan per tonne. It happened  due to concerns over escalating nickel ore exports from the Philippines and Indonesia. And slower demand from the Chinese stainless steel sector.

 

Other base metals lower

Firstly,  July aluminium contract fell 10 yuan or 0.1% to 14,080 yuan per tonne. Secondly, The SHFE July zinc price slipped 40 yuan or 0.2% to 22,205 yuan per tonne.  Following, the SHFE July lead price increased 50 yuan or 0.3% to 15,980 yuan per tonne.

Finishing, the SHFE September tin price decreased 510 yuan or 0.3% to 145,490 yuan per tonne.

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SHFE: Copper Prices retreat, Other base metals divergent

Base metals prices and trends on the Shanghai Futures Exchange were on different paths this morning. Copper prices leveled higher after the dollar pulled-back on an uncertain outlook for post-June US rate rises.
”The most-traded July copper contract on the SHFE rose 140 yuan ($20) or 0.3% to 45,920 yuan per tonne as of 03:26 BST. Around 115,000 lots of the contract have changed hands so far. ” (Metal Bulletin)

In the meantime, the three-month copper contract on the LME rose $13 to $5,695 per tonne.

“The weaker US dollar has provided SHFE copper prices with support but the decline in Chinese refined copper imports in April will limit how much prices can rebound…”

Observing the dollar index, it again came under pressure falling as low as 96.96 on Thursday. This happened after the US FOMC May meeting minutes showed some doubts over the odds for US rate increases post-June.

In terms of FOMC minutes, they “were interpreted cautiously by the market as confirming the likelihood of a June rate hike. But also showing some uncertainty over the trajectory for rates thereafter.” The main source of uncertainty is coming from the inflation outlook. National Australia Bank said this morning.

Crude oil prices continued to find back-up in expectations that members of the OPEC will agree to extend their supply cut into next year during their meeting in Vienna today.

Copper

 
Observing the Chinese refined copper imports, they fell 40.7% year-on-year to 202,654 tonnes last month. But at the same time, copper concentrate imports rose 7.7% year-on-year. Observed m-o-m, they fell 16.9%-  to 1.36 million tonnes in April.
Later, The SHFE-LME copper arbitrage remained at a loss on Wednesday. Leveling at $112 per tonne.  While the zinc arbitrage was profitable at $119.
Speaking about copper stocks, the total copper stocks at LME stockrooms fell a net 4,200 tonnes. To a level of 325,675 tonnes on Wednesday.

Other base metals mostly lower


Firsly, the july aluminium contract on SHFE fell 30 yuan or 0.2% to 13,955 yuan per tonne.  Secondly, july zinc price gained 65 yuan or 0.3% to 22,450 yuan per tonne. Thirdly, july lead price decreased 60 yuan or 0.4% to 15,870 yuan per tonne. Following, the nickel contract slipped 120 yuan or 0.2% to 76,150 yuan per tonne. And finally the SHFE September tin price increased 450 yuan or 0.3% to 144,740 yuan per tonne.

Currencies & data  

The Brent crude oil spot price rose 1.2% to $54.48 per barrel as of 03:20 BST on Thursday.

This morning, the dollar index was 0.06% higher. At the level of 97.01 as of 03:20 BST on Thursday. Shanghai Composite index stood at 3,070.32 recently, up 0.2% at 10:18 Shanghai time.
Also worth mentioning, the US existing home sales in April reached 5.57 million. It is below both the forecast of 5.65 million and April’s reading of 5.71 million. While U.S. weekly crude oil inventories fell 4.4 million barrels, far more than expectations of a decline of 2.4 million barrels and the previous week’s reading of a 1.8 million-barrel decline.
UK will announce its second estimate GDP while the USA will release unemployment claims, goods trade balance and preliminary wholesale inventory later today.

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Base Metals & New electric vehicles

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Further production of Electric vehicles will rise demand for base metals

Electric vehicle market will to boost for 13.7% of global car sales in 2025. This means that copper, aluminium and nickel could highly benefit on these movements.

If we estimate a situation in which 100% of the world’s vehicles were electric, this would impact a copper demand growth of 21%. (Compared to a current growth). Later, the aluminium demand would rise by 13%. While Nickel would see incredible boost of demand for INCREDIBLE 118 % ! Rare metals, such as , lithium, cobalt and graphite would also face a rising demand.

”These figures were based on findings by analysts who physically took apart an entry-level Chevrolet Bolt to see what it contained. ” (Metal Bulletin)

There were comments on how aluminium demand would also rise.

Due to the electrical infrastructure required to fuel the vehicles. These facts were not explained to the fullest.
In 100% electric vehicles scenario, platinum group metals were forecast to see a 53% drop in demand. Steel would see a marginal decline in demand in the context of the global steel market.

“We are more convinced than ever that electric cars will reach the tipping point in the penetration curve in the next few years.”

“This new generation of electric cars has far-reaching implications. For not only the global auto industry but also for many other sectors, such as capital goods, chemicals, mining, technology and energy.” (UBS Research)

The new models of electric cars are going to enter the market soon. For example, the Tesla Model 3 is going to hit the market in upcoming years. UBS Research expects that 14.2 million electric vehicles will be sold in 2025.

 

 

Second successive month of strikes in Grasberg copper mine

Numbers of workers at Grasberg mine, from the workers union decided to go on a second-month strikes. It is the 2nd consecutive month. Because the strikes started in May, and it was expected that they would be one-month long.

“Yes, the strike will go on for a second month.” union representative Tri Pusputal said on Monday May 22.
Freeport is frequently operating under a temporary export permit. To ship copper concentrates out of Grasberg. It is in the Indonesian territory of West Papua, after the government lifted an export ban in April.

The Freeport has been able to ship material to key customers in Japan, South Korea, India and China. But despite that, production at the mine has been affected over the past month by the May strike.

There is another obstacle in Freeport’s production in Indonesia. The company delayed 86,000 tonnes of contained copper.

And also reported that red metal sales coming straight from the mine were down. In percentage, for almost 28% in the first quarter of 2017. Due to this ban.

Grasberg is the world’s second largest copper mine by production. Mining 680,000 tonnes of copper in concentrate during the course of 2016. It is also the second largest for gold – producing 42.3 tonnes in 2015.

The extension of Grasberg mine strike could affect further production and further gains in copper concentrate TC/RCs.

Which confirmed to a three-month high of $80.5 per tonne/8.05 cents per pound. (According to the Metal Bulletin reports)

When asked to comment, the Freeport was not available.

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SHFE & Market today (May 22nd)

As a weaker dollar pushed investor appetite for commodities,  base metals prices on the SHFE went up during Asia morning trading today.


Firstly, the most-traded July copper contract on the Shanghai Futures Exchange rose 580 yuan ($84.30) or 1.3% to 45,880 yuan per tonne as of 03:30 BST. Secondly, over 250,000 lots of the contract have changed hands so far.

In the meantime, the three-month copper contract on the LME rose $29 to $5,676.50 per tonne.

“Commodity markets rallied across the board as the political turmoil in the USA reignited, sparking a weaker US dollar, which helped increase investor appetite in commodities.” (ANZ Research)

The dollar index fell as low as 97.08 last Friday. Which makes it the lowest since November 2016. The political uncertainties in the USA are questioning the US president Donald Trump’s planned infrastructure spending and tax cut plans.

Crude oil prices are also rising supported by the news that members of the Organisation of the Petroleum Exporting Countries will extend their supply cut into next year while also deepening the cuts.

 

Copper stocks in SHFE 

Observing the  deliverable copper stocks at Shanghai Futures Exchange: Approved warehouses rose 1,365 tonnes or 0.7% over last week to 196,358 tonnes as of Friday May 19. Meanwhile the SHFE-LME copper arbitrage remains at a loss – it was at close to $90 per tonne on Friday. Later, on Friday, total copper stocks at LME warehouses fell 3,700 tonnes, to 336,650 tonnes.

Other base metals higher 

When speaking about the SHFE contract, July aluminium contract rose 45 yuan or 0.3% to 14,075 yuan per tonne. Following, the SHFE July zinc price went up 905 yuan or 4.2% to 22,335 yuan per tonne.  Also, the SHFE June lead price climbed 400 yuan or 2.6% to 15,785 yuan per tonne. 

Paying attention to nickel prices, the SHFE September nickel contract gained 2,290 yuan to 78,310 yuan per tonne. Finishing with  the SHFE September tin price which moved up 3,140 yuan. In percentage that is 4.1%, to 147,190 yuan per tonne.

Currencies & data

The Brent crude oil spot price rose 0.6% to $54.11 per barrel as of 03:21 BST on Monday.
Currently, the dollar index rose 0.2% to 97.31 as of 03:20 BST. Observing the Shanghai Composite index, it stood at 3,100.59 recently. Which makes it about 0.32% up.

As of today’s data, those are mainly the European events in slight focus. First of all Europe’s Buba monthly report and then China’s CB leading index due later today. The Euro group meeting will also take place in Brussels later today.
The UK prime minister Theresa May is speaking.

The beginning of the weekly trading seems to have picked up a positive expectations and the upward trends. As for the base metals, for Oil also. Speaking about Important Economic Events today, it is pretty calm day. Nothing bombastic is not currently happening. Later during the day FOMC Members are speaking. Also the RBA Assist Gov Debelle speaks. Some data about RUB Retail Sales are already out. It reached the actual level of -0.4%, while the expected was -1.2%.

Japan Trade Balance fell to actual 482B, while the forecast was 521B.

 

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SHFE Friday’s morning trade: Copper prices

Economic Events:

  • Canada Core Consumer Price Index (CPI) MoM at actual 0.3%
  • Canada Core Retail Sales MoM came to actual -0.1% while forecast was -0.3%

 

SHFE Today

Observing the copper prices this morning, they were pretty stronger on SHFE. Asia morning trading on Friday May 19 was following positive Chinese economic data and a bounce in crude oil prices.

In the meantime, the three-month copper contract on the LME reached levels of $5 higher to $5,588 per tonne.

It is the strong sales data from China’s air conditioning sector, who has supported red metal prices this morning.

The bounce in crude oil prices has also raised sense across the commodities market, as OPEC members continued to re-affirm their commitment to a rollover in their production cut agreement.

But looking the copper price in forthcoming future; the Slowdown in Chinese housing market and political shakes in USA will definitely rise the curb in prices.

USA political crisis & China home prices

Threats from political crisis in the USA are real. It is probably going to delay US president DonaldTrump’s proposed infrastructure spending and tax cut plans. Which affects the base metals markets.

China’s growth of home prices cooled again in April. Followed by a brief up rise in March, as tougher market restrictions introduced by local governments took effect.

According to data released by China’s National Bureau of Statistics, prices climbed in 58 of the 70 mainland cities tracked by the bureau, down from 62 in March. (Metal Bulletin)

“The net long position of non-commercial traders on both the LME and Comex have been falling over the past few weeks and are now at levels last seen before the Trump trade rally started.” (ANZ Research)

 

 

Copper output in China: April data

Firstly, latest NBS data shows that China produced 724,000 tonnes of refined copper in April, which makes it up 5.5% year-on-year. Year-to-April production rose 7% year-on-year to 2.86 million tonnes.


Secondly, losses in the SHFE-LME copper arbitrage remained at over $100 per tonne on Thursday. Thirdly, copper stocks at LME warehouses rose 750 tonnes to 340,350 tonnes on Thursday. While deliverable copper stocks at SHFE warehouses slipped 874 tonnes to 71,420 tonnes.

 

Other Base Metals

Observing the SHFE July aluminium contract, it climbed 0.79% or 110 yuan to 14,040 yuan per tonne. While the July zinc price rose 0.35% or 75 yuan per tonne to 21,405 yuan per tonne. Continuing with june lead price which dipped 0.51% or 80 yuan per tonne to 15,455 yuan per tonne. Later, the SHFE September nickel contract was 530 yuan or 0.7% higher at 76,040 yuan per tonne.
September tin price moved up 590 yuan or 0.41% to 144,550 yuan per tonne.


Currencies & data  

The Brent crude oil spot price rose $0.38 to $52.90 per barrel. The Texas light sweet crude oil spot price gained $0.39 to $49.77 per barrel.
Shanghai Composite index stood at 3,090.59 recently, up 0.01. The dollar index edged 0.04% lower to 97.81 as of 04:53 BST on Friday.

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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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SHFE & Market today: May the 8th

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Important facts about today’s Market:

 

  • China Trade Balance (USD) rose to actual 38.05B while forecast was 35.50B
  • China Imports y-o-y fell to actual 11.9% while expected was 18.0%

 

 

Shangai Futures Exchange:

Copper price slided during Asian morning trading hours on Monday May 8. The performance of red metal was weaker, as well as the contracts on the London Metal Exchange.

“The pull-back of SHFE copper prices this morning was mostly impacted by the weakness in LME copper prices. This was a result of a build-up in LME copper inventory last week.” (Metal Bulletin)

The three-month copper contract on the LME was 0.98% or $55 per tonne lower as of 03:19 BST.

LME copper inventories were the highest since October 2016. They rose a net 36,800 tonnes to 354,650 tonnes on Friday May 5. This followed rises of 32,925 tonnes and 31,250 tonnes on May 4 and 3, respectively.

SHFE Copper tracks LME prices lower:

Firstly, LME copper inventories rose a net 36,800 tonnes to 354,650 tonnes on May 5. Secondly, deliverable copper stocks at SHFE-approved warehouses dropped 14,130 tonnes or 6% over the past week to 215,231 tonnes on May 5.
 “The fall down in SHFE copper stocks was happening due to the dip-buying from consumers. Anyway, as the copper price continued to hover at a low level. This made market participants show doubts as to whether the real demand could support the expanding inventories within consumers.” ( analyst from Guotai Jun’an)

 

Secondly, In supply news, Glencore reported lower copper production during the first quarter of the year due to its Antamina operation. The miner’s copper output reached 324,100 tonnes during the first three months of the year. It is a decline of 3% compared with the corresponding period of 2016.


Nickel prices jump off on immerse-buying: 

Thirdly, SHFE September nickel price soared 920 yuan to 73,920 yuan per tonne.
“The rally in nickel prices this morning was mainly a result of dip-buying following the falls seen last week.”

Following, last week saw nickel prices come under pressure amid the expectation of increased supply after the Philippines’ Commission on Appointments rejected Regina Lopez’ appointment. As the country’s environmental secretary. Lopez and her strict crackdowns on the Philippine mining industry were loosely regarded as important factors in keeping laterite ore export volumes from the Philippines low. Once the rainy season in the country had finally ended.

Aluminium prices slide down on rising stocks:

Speaking about Aluminium prices, the SHFE June price slipped to 13,755 yuan per tonne as of 03:18 BST. It is down 125 yuan from the previous session’s close. In addition,  aluminium stocks rose 12,327 tonnes to 403,905 tonnes on May 5.

“Aluminium is still consolidating after recent price jumps. Moreover, the market might be waiting in anticipation [of better prices] following aluminium supply-side reforms [in China. However, chances are that the actual deficit might not be as large as people expect.”

 

 

Currencies & Data:

 

The Brent crude oil spot price rose 0.67% to $49.73 per barrel while the Texas light sweet crude oil spot price was up 0.69% to $46.78. Following, the dollar index was up 0.16% at 98.74 on Monday as of 03:18 BST.

In equities, the Shanghai Composite dipped 0.61% to 3,083.99. 

  • US unemployment claims for April came in at 238,000, below the forecast of 246,000. Preliminary non-farm productivity and unit labour costs during the first quarter came in at -0.6% and 3%, respectively.
    • China’s April yuan-denominated trade balance stood at 262 billion yuan, beating both the forecast and the previous month’s balance of 197 billion yuan and 164 billion yuan, respectively.
    • While the country’s dollar-denominated trade balance for April stood at $38.1 billion, exceeding expectations of $35.3 billion and March’s balance of $23.9 billion.
    • UK Halifax house price index and BRC retail sales, EU Sentix investor confidence and US labour market conditions are due.

The EURO hit a seven-month high against the dollar after Emmanuel Macron won yesterday’s elections. This is a victory that should further boost the currency, as political concerns fade, and investors focus on the eurozone’s economic recovery.

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