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LME Futures Report on Wednesday, August the 30th

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Intro

LME base metal prices are staying strong, at their current levels. Nickel and copper consolidated their recent gains. It was surely expected after few days of constant growth. 

Three month copper price went loosely up, but has again fallen to the level below $6,800 per tonne.

“Copper prices have had a strong run to the upside and although we remain bullish, the current upleg is looking quite stretched now, so some consolidation seems likely, especially if the dollar rebounds.” (Metal Bulletin analyst)

“The rest of the metals have been consolidating in high ground for some time, so they may be ready to push higher and catch up with copper’s lead.”  (Fast Markets)

 

Observing lead volatility, it yesterday closed up for 2.6%. This morning it is trading higher, due to cancelled 5,000 tonnes in Rotterdam. Leaving on-warrant stocks at 4month low worth.  

Aluminium, nickel and zinc are all trading remotely higher and consolidating at new levels.

 

Copper targets higher

The three-month copper price was up $5 to $6,796.50 per tonne.

Following, the Stocks declined a further net 9,975 tonnes to 223,050 tonnes with 15,000 tonnes re-warranted in various locations. 

China’s boosting macroeconomy will continue giving support to copper prices. Especially as the forecasts are expecting a new strong demand for copper during the upcoming season.

Following, the LME stocks declined sharply,

 and that indicated a positive fundamentals for copper. It peaked the level of $6,843.50 per tonne on Tuesday.

This volatility entered the market from the Asian part, where the most-traded January copper contract on SHFE also traded higher at 52,750 yuan ($7,989) per tonne.

 

Metal Prices

 

  1. ALUMINIUM

 

* The three-month aluminium price was up $3.50 to $2,098.50 per tonne.

*Stocks declined 225 tonnes to 1,324,325 tonnes.

 

     2. NICKEL

 

*Nickel’s three-month price was up $10 to $11,720 per tonne. Inventories fell 1,890 tonnes to 386,550 tonnes.  “Nickel prices are under consolidation; however, there is a large chance that we will see nickel price supported in September.” (MB analyst said)

 

    3. ZINC  & TIN

 

* The three-month zinc price was up $26.50 to $3,136.50 per tonne. Stocks declined 775 tonnes to 245,375 tonnes, cancelled metal now accounts for 54% of total stock. * Lead’s three-month price edged $6 higher to $2,384 per tonne.

Most noteworthy,  stocks declined 25 tonnes to 148,675. With 5,125 tonnes freshly cancelled in Rotterdam. The three-month tin price was up $60 to $20,410 per tonne. Inventories dipped 85 tonnes to 1,890 tonnes.

 

Currencies & Data

Observing the value of indexes, the dollar index was up 0.24% to 92.51.

Brent crude oil spot price was down 0.91% to $51.46 per barrel. * In data on Tuesday, the August German GfK consumer climate index was a slightly better 10.9. French July consumer spending rose the anticipated 0.7% on the month, while the country’s second-quarter GDP was up 0.5% as forecast. * In US data on Tuesday, consumer confidence for August rose to 122.9, from 120.0. * The economic agenda is busy today with UK net lending to individuals, M4 money supply and mortgage approvals and US data that includes ADP non-farm employment change, preliminary second-quarter GDP and crude oil inventories of note. * In addition, US president Donald Trump is expected to lay out his plans for tax reform later today, while US Federal Open Market Committee member Jerome Powell is also speaking.

 

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.

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.