Name: Martin
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Bio: Martin has spent over 30 years reporting on the LME, both at Reuters and, since 2006, with FastMarkets, where he heads up the global editorial team and continues his passion for Minor Metals.
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NEWS FOCUS – LME clearing fee hike a sign of dearer times to come – traders
May 17th, 2013The sharp increase in fees that the UK financial markets clearer, LCH.Clearnet, is imposing on registering LME contracts is a signal that the costs of doing metals business will rise now that the exchange is a fully commercial model, senior floor traders said.
LCH.Clearnet, which currently clears trades on the London Metal Exchange, will lift the fee from its present level of five pence per lot to 15 pence from June 1. It said it is doing this to meet steeper regulatory costs.
“That’s massive – tripling costs that someone will have to pay at the end of the day. A lot of customers won’t wear that if we try and pass it on,” one said.
Another trader said the bulk of their business was with customers who were granted extended credit lines and whose cost of trading is therefore low. While fee rises can be passed on in these instances, it would not be the case of for ring-dealers doing floor business on behalf of associate broker clearers.
Some said this was the first sign that costs are on the way up following the LME’s purchase in 2012 by Hong Kong Exchanges & Clearing (HKEx).
HKEx completed its $2.2 billion acquisition of the LME on December 6, ending the LME’s 135-year history of independence. As part of the deal, HKEx agreed not to make any changes to the trading fee structure until the start of 2015.
But this is believed to apply the LME exchange user fee, which covers data collection and matching costs and was raised to $0.79 per lot in July 2012 and guaranteed at that level. Clearing, which is done externally, can therefore be seen as a separate cost and not covered by the guarantee.
“We get an overall charge, depending on the type of trade, from the LME. So I guess that includes clearing,” another said.
“You can bet that when the LME does its own clearing that there won’t be a reduction – HKEx have to get a return,” another trader said.
The LME is bringing clearing in-house – LME Clear is the project currently under development to replace LCH.Clearnet’s services. Market sources said that the LME Clear was due to go online in the first quarter of 2014 but it is now likely to be postponed until September 2014.
LCH.Clearnet said it was raising the tariff while it makes significant investment to finance increasing risk capital, achieve regulatory compliance and provide enhanced risk management services.
“Whichever way you look at it, and you can throw in EMIR, Europe is becoming a costly place to do business now,” another trader added.
(Editing by Mark Shaw)
Base metals drop close to two-week lows, macroeconomic gloom weighs
May 15th, 2013Base metals uniformly retreated during Wednesday LME premarket trading, with most tailing back to their lowest levels since early May amid the negative shift in short-term sentiment now that the recent technical rally has ground to a halt, traders said.
As well, losses reflected darkening economic growth prospects in the eurozone after poor GDP data, a softer euro – around its lowest for some six weeks against the dollar – and some sizeable warehouse inventory builds.
In the metals, copper, aluminium, zinc, lead and nickel all fell to their lowest for nearly two weeks, while tin hit a one-week low.
“It seems as though lack of progress on the upside recently has triggered liquidation of stale longs,” William Adams of FastMarkets said.
On the data side, Japan’s March tertiary industry activity showed a decline of 1.3 percent, its lowest reading in more than a year, while French, Italian and German preliminary first-quarter gross domestic product (GDP) numbers also disappointed.
Germany’s GDP came in up 0.1 percent, below the expected a 0.3-percent increase, while France slipped back into recession after a second consecutive contraction of 0.2 percent. Italian GDP was down 0.5 percent. GDP for the eurozone as a whole was down 0.2 percent, exceeding a forecast 0.1-percent fall.
This weakness in the eurozone weighed on the single currency, which was trading around 1.2900 against the dollar.
The metals complex has now lost all the momentum generated by the snap short-covering rally of just over a week ago and, with the summer months approaching, faces the twin pressures of dwindling physical offtake and rising inventories.
“Consumers are likely to stand aside in anticipation of lower prices in the short term,” LME RDM Sucden said.
This has left involvement centred on investment flows and fresh selling may well be initiated given the change in chart readings now that the CTA short-covering has run its course.
“We see price action being driven by participant positioning across the board,” LME RDM Marex Spectron said.
On the data side this afternoon, April US industrial production figures are due – these are seen falling 0.1 percent.
COPPER INVENTORIES SWELL, HIT HIGHEST SINCE 2003
Copper was under pressure again following a 2.3-percent slide on Tuesday – it hit $7,151 at one stage, its weakest since May 3. Recent trade at $7,170 per tonne was down $75 from Tuesday, with prices now back in the $6,800/7,200 band.
Warehouse stocks climbed a net 8,825 tonnes to 627,525 tonnes, the highest since August 2003. This was due to warrantings of 7,525 tonnes and 3,600 tonnes in Johor and New Orleans respectively.
Zinc hit its softest since May 2 at $1,826.50 and then held at $1,830, a $16 loss, amid a hefty 87,525-tonne jump in warehouse stocks. The 8.5-percent increase ended the run of 21 successive daily declines and lifted the total to a one-month high of 1,120,900 tonnes – 92,425 tonnes were warranted in Antwerp.
In others, aluminium fell to $1,839.25, a $17.75 decline. Stocks dropped 4,325 tonnes to 5,225,975 tonnes. Lead was $17 lower at $1,962, while inventories resumed their downtrend, falling 1,125 tonnes to 244,525 tonnes.
Nickel traded at $14,919, down from Tuesday’s $15,105 close. Stocks jumped 1,122 tonnes to an all-time high of 179,556 tonnes. Tin business at $20,530 was $465 lower – stocks were up 25 tonnes at 14,195 tonnes, the highest since April 24.
Steel billet was indicated at $160/179, with inventories falling 130 tonnes to 76,830 tonnes. In the minors cobalt was quoted at $26,500/28,500, while molybdenum saw a 12-tonne stock fall to 156 tonnes.
(Additional reporting by Eddie van der Walt, editing by Mark Shaw)
LME WEBCAST – Metals easier, copper hits one-week low
May 14th, 2013Gold moves higher within range as dollar loses momentum
May 14th, 2013Gold pushed higher during Tuesday morning trading in Europe, mildly enlivened by the dollar losing some of its upward momentum, although bullion continued to range relatively tightly, traders said.
To some extent the market absorbed the potentially negative impact of India’s central bank imposing curbs on consignment gold imports, given reports of solid festival offtake this week.
Spot gold was quoted at $1,436.40/1,437.20 per ounce, up from the close on Monday at $1,432.75.
“While the RBI announcement is ostensibly negative for bullion prices, the curb on gold imports may encourage local buyers to seek alternative means to secure bullion supplies,” James Steel of HSBC said.
The Reserve Bank of India (RBI) said it will limit with immediate effect consignment gold imports by banks, matching regulations in place for other imports to create a level playing field.
Banks currently import gold on a consignment basis for buyers who do not have to fund these purchases themselves. When they then sell the gold, they pay the exporting bank at the price prevailing on the day of the sale.
“[Because] the majority of the gold on consignment that is imported from India is taken by the non-bank agencies the immediate impact has been lighter than initially expected,” broker MKS said.
As well, the Akshaya Tritiya festival on Monday witnessed solid gold jewellery sales. Reports from jewellers across the country suggest a rise in sales of 20-25 percent. According to industry estimates, between 20 and 25 tonnes of gold were delivered as jewellery and coins.
“We expect Indian gold demand to remain at elevated levels with the festive gold-buying wedding season under way,” HSBC’s Steel added.
Elsewhere, the dollar gently drifted back against the euro to settle around 1.3020. Its advance was curbed by receding hopes of prolonged US Federal Reserve stimulus measures after yesterday’s April US retail sales came in above expectations at 0.1 percent against a forecast fall of 0.3 percent.
On the data side so far, the eurozone economic sentiment index came in at 27.6 against a forecast 27.3, while the region’s March industrial production rose one percent compared with a predicted 0.6-percent increase. Later today data on the April US NFIB small business index and April import prices will be released.
In other precious metals, silver was stable at $23.65/23.70 per oounce from the previous session’s close at $23.70.
PGMS SUPPORTED IN PLATINUM WEEK
The platinum group metals (PGMs) remained in focus as London’s Platinum Week events continued. On Monday, Johnson Matthey (JM), the world’s largest PGM fabricator, painted a relatively bullish picture for both platinum and palladium in the medium term.
Broker Macquarie favours palladium in the short term, though, citing “its structural weak supply and strong demand”.
Spot platinum was quoted at $1,499/1,504 per ounce, up from the close on Monday at $1,483. Palladium was steady at $715/721 from yesterday’s close at $717.
(Editing by Mark Shaw)
Metals mixed, drift back on dollar strength after China data
May 13th, 2013Base metals traded at mixed levels during Monday’s LME premarket, drifting back after initial gains and upside momentum stalled in the face of a stronger dollar and flat equity markets, traders said.
As well, after a brief upside reaction to a string of Chinese economic reports, which were mostly close to expectations, the complex subsequently eased gently, given that the data presented no clear signals of constant growth, analysts said.
Declines were small in scale, however, while short-term consolidation trends remain broadly intact. With little in the way of significant developments at the weekend’s G7 meeting, the focus in the complex reverted to immediate sentiment and technicals, both of which remain geared to building on the recent strong rally.
“The base metals continue to look well placed to work higher… In the absence of a meaningful sell-off in equities, we expect the base metals to move up to higher sideways trading ranges,” William Adams of FastMarkets said.
In the data released in Asia, China’s April industrial production rose 9.3 percent, marginally undershooting the predicted 9.4-percent growth and up from 8.9 percent in March.
April retail sales rose 12.8 percent as anticipated, although there was a decline in fixed asset investment, which was up 20.6-percent on a year-to-date basis against an expected 21.1-percent. The latter suggested that construction and infrastructure spending has not been as strong as anticipated.
On the economic newsflow side, data flows are light before April US retail sales figures and March US business inventories numbers this afternoon.
Before that, for the metals, activity in the official rings will focus on pricing against the May ‘third Wednesday’ date, which becomes prompt today.
COPPER WHIPS AROUND $7,400/T
Copper slipped back from its peaks around $7,450 to seesaw around the $7,400 level, trading recently at $7,391 per tonne, still up $16 from the Friday close. Technically, the market continues to range above the $6,800/7,200 level, with repeated support around the mid-$7,200s.
Inventories rose, however, with a net 2,450-tonne increase to 606,700 tonnes – this reflected another 6,575-tonne warranting in Johor. This location now accounts for 195,125 tonnes, roughly 30 percent of overall inventories.
Aluminium continued to struggle near $1,900 – it fell back to $1,859, a $13 loss. Stocks rose 7,525 tonnes to 5,154,175 tonnes, with metal mostly warranted against today’s May ‘third Wednesday’ date. There were 13,175 tonnes put on warrant in Vlissingen.
In others, lead was testing support resolve around $2,000, trading at $1,998, still up $4. Stocks fell for the 14th day in a row, down 1,650 tonnes at 243,775 tonnes, the lowest since January 2011.
Sister metal zinc was $4 lower at $1,855. Inventories maintained their downtrend, meanwhile, falling for the 20th successive day – down 5,225 tonnes at 1,038,200 tonnes, a new seven-month low.
Nickel traded at $15,404, up $44, with a mini-run of inventory declines sustained – stocks fell for the third day running, down 354 tonnes at 177,840 tonnes. Tin at $20,900 was up $75 – stocks climbed 60 tonnes to 14,145 tonnes.
Steel was quoted at $155/175, with stocks down 65 tonnes at a four-month low of 76,960 tonnes. Cobalt was stable at $27,600/28,100, while molybdenum was neglected. Stocks of the minors were unchanged.
(Editing by Mark Shaw)
Selenium slips to 40-mth lows, test of $30/lb seen
May 10th, 2013Selenium prices tumbled to their lowest since January 2010 this week, with levels of $30 in sight as snap panicky offers of metal found a virtual buyers’ vacuum, traders said.
“The market is all over the place below $40 – people are saying it is trading at $30 but that can’t be confirmed,” one trader said.
Selenium was indicated at $33/38 per pound, down around 20 percent since the start of the year.
Chinese offtake of selenium by the domestic manganese sector was low-key, contributing to the downturn, traders said. Manganese is used in selenium-based manufacturing applications.
The metal is mostly produced as a by-product of copper and also of nickel but its availability varies depending on the concentrate grade. Higher copper output does not necessarily mean more selenium as well.
The glass industry accounts for roughly 50 percent of demand – it is used to decolourise the green tint caused by iron impurities.
Unlike many other minor metals, China is an importer of selenium – its overall economic health underpinned advances to all-time highs of $70 in the fourth quarter of 2011. China is a major end-user in its growing fertiliser, glass and pigment sectors.
For years, selenium languished around $3.00-5.00 per pound until it stormed higher in the years preceding the 2008 financial crash. At that time, increased world demand for glass in construction projects as well as rising off-take in electronic devices and, in particular, new uses in solar cells tilted the market into deficit.
Prices peaked at a then-record of $50. Although the market declined during the global downturn, a floor was established just below $30. The market has consistently performed robustly since 2010.
MANGANESE WEAKNESS
Manganese prices, meanwhile, have fallen back to around $2,200/2,400 per tonne, their lowest since July 2009.
“We have been offered at $2,350 today,” a trader said.
Manganese is now not far off the October 2008 17-month lows of $2,000 – a far cry from the mid-2007 peaks around $5,500, which was the highest since the early 1990s.
(Editing by Mark Shaw)
SMG Indium Resources holds 47t of indium
May 10th, 2013SMG Indium Resources Ltd’s net market value as of the end of April was around $30.81 million, the US-based said, with its holdings of indium metal standing at some 47 tonnes.
The market value of its indium was some $537.50 per kg compared with an average purchase cost of $609.05, it said in a release on Wednesday.
SMG purchases and holds indium for investment purposes only – it probably has the largest strategic stockpile outside China. Its strategy is to gain long-term price appreciation for its metal but not speculate in the short term.
As indium tin-oxide (ITO), the metal it is used in liquid crystal display (LCD) and flat panel display (FPD) screens. This sector accounts for some 80 percent of annual consumption.
Demand from makers of TVs helped push the price, which was just $65 per kg in 2002, to its record high of $1,000 in 2005. Market volatility has subsided since, with 2012 a subdued year for indium’s use in high-tech applications. It is currently quoted at $520/570 per kg.
In 2012, total global primary production was 670 tonnes, with recycling recovery metal lifting overall availability to between 1,000 and 1,100 tonnes, traders say.
(Editing by Mark Shaw)
MINORS LATEST – Cadmium price at 15-month highs, touches $1.00/lb
May 9th, 2013Cadmium prices edged up to their highest levels since February 2012 in Europe this week, touching $1.00 per pound amid a scarcity of prompt material to meet spot offtake requirements, traders said.
Prices of the metal, primarily recovered from zinc mining, stand at $0.87/0.97 per pound and $0.90/1.00 per pound for 99.95 and 99.99 percent material respectively. Parcels have changed hands around and just above $1.00 recently.
“So much is done under long-term contracts nowadays and traders don’t hold and finance much. That’s when you find users who have held off when it was in the $0.80s coming in to the spot market and finding nothing around,” a trader said.
There has not been any noticeable pick-up in consumption – instead, activity is focused on hand-to-mouth requirements in a market where fresh production tends to be directed towards and locked into long-term contracts.
Cadmium’s main end-use is in batteries but this sector has been in decline – nickel-cadmium (ni-cad) batteries for use in laptop computers and mobile phones are being phased out in favour of lithium-ion units.
Worries over toxicity have spurred various recent legislative efforts, especially in the EU, to restrict the use of cadmium in most of its end-use applications. In PVC, it is banned.
Global cadmium production rose last year to 23,000 tonnes from 22,200 tonnes in 2011. Flat consumption meant that the market was in surplus.
Traditionally, cadmium ranges between $0.50 and $2.00. Prices were last around $2.00 in April 2010 but had been above $6.00 per pound in mid-2007 just before the onset of the global financial crisis and the subsequent savage price downturn throughout what had become an overheated minor metals sector.
(Editing by Mark Shaw)
Base metals prices firmer as rally resumes, China trade data mostly supportive
May 8th, 2013Base metals regained their upside momentum during Wednesday LME premarket trading after largely consolidating on Tuesday, with the uptick generated by China’s April trade report, which was broadly positive for economic growth.
“The base metals look more robust, with prices well placed to build on Friday’s gains, having had a breather yesterday,” William Adams of FastMarkets said.
Global equity markets were again strong – the MSCI basket was at a five-year high – following the strength in the US Dow Jones on Tuesday, while the euro was stable around 1.3115 against the dollar. In the metals complex, however, prices are vulnerable to bouts of volatility, traders said.
“There is a lot of short-termism around at the moment, so after [Friday's] rally we would expect a few ‘up-and-down’ days. The [monthly] fund rolls always make the closes swing around as well,” a trader said.
Investment funds roll long positions forward at the start of each month by lending spot metal, which tends to buttress contango rates.
Earlier, prices reached their highs after keenly anticipated data showed China’s trade balance in April swung to a surplus of $18.2 billion, which was more than the expected $15.5 billion, from the previous month’s deficit.
The figures showed strong growth in imports and exports last month, an encouraging sign that domestic consumption of raw materials and external demand for manufactured goods are improving.
But copper imports in April fell around seven percent to 295,799 tonnes, the lowest since June 2011, from March levels and were down 21 percent year-on-year, counterbalancing the other positive impacts of the trade data.
“At face value the trade data looks encouraging but demand for copper imports has fallen, although that is not surprising because there are high levels of copper stocks in China,” Adams said.
Today is a light day for front-line economic releases elsewhere, although key March German industrial production figures are due shortly, while weekly US crude oil inventory data is out this afternoon.
COPPER HOLDS ABOVE BREAKOUT LEVELS
Copper pulled back from its highs around $7,350 to trade recently at $7,325 per tonne, still up $60 from the Tuesday close.
Copper is showing signs of building a technical support level around $7,258, broker RBC noted – the session low so far is $7,250. Before Friday’s breakout, the market’s range was $6,800/7,200.
Warehouse stocks rose, ending a mini-run of four straight declines. The net 1,225-tonne increase to 605,825 tonnes reflected a 6,900-tonne warranting in Johor.
Aluminium was consolidating above $1,900, with recent business at $1,901 up $20. Stocks dropped a chunky 17,750 tonnes, with removals of 6,175 tonnes and 6,000 tonnes respectively from the bloated stores of Detroit and Vlissingen.
In others, zinc traded at $1,895, up $12.50. Stocks fell for the 17th day in a row – down 3,225 tonnes to a new seven-month low of 1,049,500 tonnes.
Lead business at $2,058 was $32 higher, with inventories declining for the 11th successive day. The 2,875-tonne fall brought the total down to 248,200 tonnes, also the lowest for seven months.
Nickel was $332 higher at $15,332 but inventories rose 276 tonnes to a new all-time peak of 178,482 tonnes. Tin at $20,447 was $247 up from yesterday, while stocks held at an unchanged 13,915 tonnes.
Steel billet was neglected but inventories fell 130 tonnes at 77,090 tonnes. Cobalt was quoted at $26,850/27,850, with stocks static at 433 tonnes. Molybdenum was lifeless but there was the first movement in inventories since March 25.
Stocks climbed 24 tonnes – all in Rotterdam – to 144 tonnes, the level that prevailed in January, which was the highest since September 2012.
(Editing by Mark Shaw)
Gold falls back on firmer equities and dollar
May 7th, 2013London 07/05/2013 – Spot gold fell back in Europe on Tuesday morning, with business levels and interest reverting to normal after Monday’s UK holiday but a steadier dollar and firmer equity markets weighing on the mood, traders said.
The dollar pushed up against the euro to around 1.3075, having touched 1.3064 at one stage, while global equity markets, based on the MSCI index, were at their highest for around five years.
“Overall risks remain skewed to the downside for the time being. Only a move back above the trend support at $1,520 would signal some improvement in the technical picture,” broker Credit Suisse said.
Spot gold was quoted at $1,459.75/1,460.55 per ounce, down from the close on Monday at $1,470.55. On Friday it had been as high as $1,488.15, its best for around two weeks.
As well, continued ETF redemptions – down around a fifth this year – put pressure on gold, with holdings at SPDR Gold Trust now around their lowest since August 2009.
“ETF outflows continue, which seem to be weighing on investors minds. Yesterday another 106,372 ounces were redeemed. [Outflows remain] gold’s key downside risk,” MKS noted.
But this lowering of investor holdings is being partly offset by the upturn in Asian physical demand that was sparked by the early-April price collapse, while monetary easing is also a support factor.
Earlier today, the Reserve Bank of Australia (RBA) cut its cash rate to a record low of 2.75 percent from a previous 3.00 percent. On Monday, European Central Bank President Mario Draghi said additional monetary easing measures could follow after the central bank cut interest rates to record low levels last week.
But the picture is not clear-cut in the US, where Friday’s positive April non-farm payrolls report has eased concerns on US growth, offsetting the positive impact from the FOMC’s recent policy positioning.
“Given these crosscurrents in gold at the moment, there is not enough incentive to materially alter fragile sentiment… and pursue either direction with strong determination for now,” broker UBS said.
In others, silver eased to $23.69/23.74 per ounce from the previous session’s close at $24.05. Spot platinum was quoted at $1,488/1,493, down from the close on Monday at $1,505. Palladium softened to $688/693 from yesterday’s close at $695.
South Africa’s supply problems will be long-lasting, which will provide a downside support cushion for PGM prices, broker Commerzbank noted.
“In view of the numerous risks to supply, we see continued high upside potential for both platinum and palladium prices,” it said.
(Editing by Mark Shaw)
Metals steadier, early advance pauses ahead of ECB move
May 2nd, 2013Base metals traded at steadier levels during Thursday’s LME premarket, settling back from earlier highs after a mini-bounce from yesterday’s sell-off stalled ahead of the ECB meeting outcome early this afternoon, traders said.
The tone was generally cautious amid the raft of economic releases and news events today. At the ECB monetary policy meeting, the central bank is seen lowering its key rate to a record low of 0.5 percent.
In the metals, copper rebounded from its one-week lows set yesterday and aluminium recovered from its two-and-a-half-year low, although the nickel market again struggled, setting a fresh low since July 2009.
“We still feel base metals prices are oversold and we would expect bargain hunting to provide support but we are concerned that a more pronounced correction in equities could get underway, which in turn could lead to more selling pressure in the metals,” William Adams of FastMarkets said.
The complex gained a modicum of support from the US FOMC outcome overnight – the statement was less dovish than had been anticipated.
“Although the US Fed did signal more flexibility in its asset purchasing program, activity was deemed to be ‘expanding at a moderate pace, the labour market showing improvement, and inflation running somewhat below the Fed’s long-run objective’,” ANZ Research said.
In today’s busy data-stream, the final HSBC final manufacturing PMI for China in April undershot at 50.4 undershot the expected 50.6. Yesterday, the ISM manufacturing PMI for the US for the same month at 50.7 missed the predicted 51.0.
“The reading is disappointing for those hoping for a greater pickup in the Chinese economy and is also weak on a seasonal basis, with April typically representing the strongest period for Chinese manufacturing,” broker Macquarie said.
In Europe, the various PMIs were mixed and all below the 50 level that divides contraction and expansion – Germany’s dropped to 48.1 from a previous 49.0. Due later from the US is data on the trade balance, unemployment claims, preliminary non-farm productivity and preliminary unit labour costs.
COPPER REGAINS $6,800/T
Copper recovered from sub-$6,800 levels in Asia, where SHFE values were nearly five percent lower on the post-May Day reopening. But after touching $6,900, prices settled back at 6,880 per tonne, up $85 from Wednesday’s sharply lower close. Inventories fell a net 2,050 tonnes to 616,125 tonnes.
Aluminium clawed away from Wednesday’s lows of $1,817.50 to trade at $1,837, a $13 advance. But stocks soared 10,825 tonnes to 5,163,650 tonnes due to a 15,600-tonne warranting in Vlissingen. Cancelled warrants – metal booked for removal – jumped to 2,078,575 tonnes, the highest since late-January, due to a 60,275-tonne jump in Vlissingen cancellations.
Zinc was $10 higher at $1,850 after stocks declined for the 14th day in a row – down 2,175 tonnes at 1,060,000 tonnes, a fresh low since October 2012. Lead was $3 higher at $1,982, with stocks falling for the eighth successive day – the 400-tonne fall left the total at 253,925 tonnes, also the lowest since October 2012.
In others, nickel hit a fresh multi-year low of $14,701 and then edged back to $14,805, down $15 still. Stocks were unchanged at the all-time high of 178,476 tonnes reached yesterday. Tin was unchanged at $19,950 – inventories held at 14,030 tonnes.
Steel billet was flat at $150/170, with inventories static at 77,480 tonnes for the eighth day now. Cobalt and molybdenum were both neglected, with no movement in inventories.
(Additional reporting by Kathleen Retourne, editing by Mark Shaw)
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Base metals easier, soft China PMI triggers copper slide to one-week lows
May 1st, 2013Base metals retreated across the board during Wednesday LME pre-market trading, pressured by a soft April PMI reading earlier from China and hesitation ahead of today’s US FOMC meeting outcome and Thursday’s ECB moves.
Liquidity was thin because of widespread May Day holidays and prices snapped lower across the complex, with copper and lead dropping to one-week lows and aluminium, zinc and nickel falling to their lowest for two weeks.
“The base metals are once again showing signs of struggling – the run-ups last Thursday have so far failed to attract much follow-through buying and prices are now drifting lower while they consolidate,” William Adams of FastMarkets said.
A jittery day is in prospect, due to May Day holiday closures again in Asia, Continental Europe and most other financial centres with the exception of the UK and the US, where there is a steady stream of data and events. Also, option-related business ahead of late-morning May declarations set the scene for a soggy start to the new month.
Earlier, there was key data from China in the midst of its three-day holiday – markets there reopen on Thursday. The country’s official purchasing managers’ index (PMI) fell to 50.6 from March’s 11-month high of 50.9 – later today there are manufacturing indices from the UK and the US.
As well, US economic releases include ADP private-sector employment data in the run-up to Friday’s April jobs report and construction spending figures. The main focus, however, will be the outcome of the US FOMC meeting after the market’s closure this evening.
The Fed could make a fresh commitment to maintain its bond-buying programme in the wake of disappointing US economic indicators. The US Fed has said will maintain quantitative easing (QE) until the labour market has improved substantially.
On Thursday, the ECB is widely seen cutting its main interest rate at its monthly policy meeting, similarly in response to recent weak data. A rate cut of 25 basis points would take the ECB’s refinancing rate to a record low of 0.5 percent.
COPPER SLIDES BACK UNDER $7,000/T
Copper fell as low as $6,936.50 and then held at $6,965 per tonne, well below the Tuesday close of $7,055. Inventories, however, fell a net 425 tonnes to 618,175 tonnes but remain close to the recent 10-and-a-half year highs.
In options, the sub-$7,000 fall has brought the 1,138 lots of puts that were open at the $7,000 strike well in-the-money. At the next strike – $6,950 – there is minimal put option open interest.
Despite the market whipping either side of the $7,000 pivot level, a broad sideways range is in place.
“It is happy holding the short-term range between $6,800 and $7,200,” LME RDM Triland Metals said.
Aluminium business at $1,839 was down $20.50 – stocks fell 4,800 tonnes to a fresh two-month low of 5,152,825 tonnes. In options, the decline brought 3,139 lots of puts open at $1,875 in-the-money, with 557 calls out-of-the-money.
In others, zinc business at $1,847 was $21 lower, although the downward trend in stock movements continued, with inventories falling for the 13th successive day – down 6,300 tonnes at 1,062,175 tonnes, a fresh low since October 2012.
Sister metal lead was see-sawing around $2,000, with trade at that level down $27. There are 100 lots of calls and 240 puts open at $2,000, which are flipping in and out of the money. Stocks, meanwhile, were down for the seventh day in a row, falling 850 tonnes to 254,325 tonnes, likewise a new low since October 2012.
Nickel eased to $15,168 from a previous $15,390, with stocks up 1,440 tonnes at a new record of 178,476 tonnes. Tin subsided below $20,000 again to trade at $19,951, down from yesterday’s $20,370 – there was a modest 25-tonne stock fall to 14,030 tonnes.
Steel billet was neglected, with stocks unchanged at 77,480 tonnes. In the minors cobalt was quoted at $26,500/28,000, while inventories increased nine tonnes to a two-week high of 438 tonnes. Molybdenum was indicated at $24,500/26,500.
(Editing by Mark Shaw)
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MINORS LATEST – Q1 ferrochrome production hit by South African electricity buy-backs
April 30th, 2013Global output of ferrochrome in the first three months of the year was hit by agreed production cuts in South Africa where producers agreed to electricity ‘buy-backs’ with state-owned utility Eskom.
But Merafe, a joint-venture operation with Xstrata, managed to record higher output due to operational efficiencies. Its Jan-March production was 67,000 tonnes, up from 65,000 tonnes in the same year-ago period.
“Production volumes increased as a result of improved overall performances of the Venture’s furnaces. The Rustenburg furnaces exceeded expectations in terms of production volumes and efficiencies as a result of the successful commissioning and ramp up of the Tswelopele pelletising plant,” Merafe said.
International Ferro Metals (IFM) reported that its first-quarter output fell to 34,172 tonnes from 48,762 tonnes during the first three months of last year.
The spot market remains tight while ” South African producers deliver on long-term contracts at the expense of the spot market, given the lower production and higher cost dynamic”, IFM chief executive Chris Jordaan said.
Both IFM and Merafe have shut furnaces for periods in 2012 and 2013, selling electricity back to Eskom, which has helped maintain a healthy balance between supply and demand as well as underpin prices. The second-quarter reference price has risen 13 percent to 127 cents per pound from first-quarter levels, although it remains below the 135 cents reached for the second quarter of 2012.
(Editing by Mark Shaw)
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Metals struggle as technicals stall, European data underwhelms
April 30th, 2013Base metals broadly fell back during low-key LME premarket trading on Tuesday, lacking follow-through to the previous day’s technical gains and stymied by a run of mostly soft European economic data.
Among these and ahead of Wednesday’s widespread European May Day closures, the eurozone jobless rate held at 12.1 percent, the April CPI rose a less-than-expected 1.2 percent and German unemployment rose by 4,000 last month, double the expectation.
Metal prices look set to range broadly ahead of potential end-week macro-economic developments from US and European monetary policy meetings. Slow conditions reflected market closures in Asia ahead of Wednesday’s holidays, traders said.
“For some days now, the majority of metal prices have been trading sideways. We believe that the consolidation process will continue for a number of weeks yet,” broker Commerzbank said.
The three-day holiday in top consumer China has kept many key players out of the market, while May 1 is a public holiday in most other financial centres, with the exception of the UK and the US. This puts the emphasis on end-week macro-economic developments.
On May 1, the US FOMC could make a fresh commitment to maintain the central bank’s bond-buying programme in the wake of disappointing US economic indicators. The US Fed has said it remains committed to with its third quantitative easing (QE3) programme until the labour market had improved substantially.
On Thursday, the ECB is widely seen cutting its main interest rate at its monthly policy meeting, similarly in response to recent weak data. A rate cut of 25 basis points would take the ECB’s refinancing rate to a record low of 0.5 percent.
“We don’t expect much in the line of big moves over the next few days as option expiry is coming [on Wednesday] and most of the metals are trading pretty close to the strike levels that have the largest open interest,” broker RBC said.
May traded options will be declared tomorrow morning but the more sizeable open interest is located in June.
Later in the session, US releases include the March employment cost index, the February S&P/CS Composite-20 HPI, the April Chicago PMI and the April CB consumer confidence index.
COPPER THREATENS TO SLIDE BELOW $7,000/T
Copper was showing signs of falling back below the $7,100 level, trading at $7,115 per tonne, down from the $7,153.50 Monday close. Inventories rose a net 950 tonnes to 618,600 tonnes, just 3,000 tonnes under the 10-and-a-half year highs set earlier this month.
“Copper will likely trade either side of $7,000 for the next few days and see good resistance at $7,200 unless something happens in the supply chain,” RBC added.
Aluminium was unable to hold above $1,900, slipping to $1,894, a $5 loss. But stocks fell 10,100 tonnes to a two-month low of 5,157,625 tonnes.
In others, lead traded at an unchanged $2,039, down $5 – inventories dropped for the sixth day in a row, with the 1,525-tonne fall taking the total down to 255,175 tonnes, a new low since October 2012. Cancelled warrants – metal booked for removal – rose eight percent or 11,900 tonnes to 161,350 tonnes, the highest since January 16.
Sister metal zinc was $12 lower at $1,897 although inventories were down for the 12th successive day – falling 6,400 tonnes to a six-month low of 1,068,475 tonnes.
Nickel was $95 lower at $15,405, while a 1,200-tonne lift in inventories took the total to a new all-time high of 177,036 tonnes. Tin traded at $20,801, a $94 loss, with stocks up 120 tonnes at 14,055 tonnes.
Steel billet was neglected and stocks were static at 77,480 tonnes. In the minors, cobalt was indicated at $26,500/28,000, with stocks up three tonnes at 429 tonnes. Molybdenum was ignored.
(Editing by Mark Shaw)
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Metals drift back as correction stalls, copper pares gains
April 25th, 2013Base metals stepped back from their early highs during Thursday LME premarket trading when the continuation of the complex’s technical correction paused for breath against a generally sluggish economic backdrop, traders said.
But prices were still broadly steady, while copper, which has seen a five-percent rally from its early-week 18-month lows, was firmer. Further pockets of technical buying are possible, which should help reduce selling pressure in the immediate term.
“We have viewed the sell-offs, especially in copper, nickel and gold, as being oversold so are not surprised that these metals are rebounding strongly,” William Adams of FastMarkets said.
The advances that kicked off on Wednesday took place against a broader correction throughout the commodity sector – gold at around $1,445 per ounce was building on its recovery from last week’s massive sell-off and crude oil was stable just below $102 per barrel.
But he industrial materials may struggle to generate eventual follow-through given the sluggish macroeconomic picture, traders said.
Nevertheless, copper was upbeat after yesterday’s positive close above $7,000 per tonne, challenging $7,100 at one stage. And while trends in other metals were more mixed, price levels were still above recent sell-off lows.
“We now have a bottom – temporary – in place and we hope the markets can take stock and consolidate over the next few days. We do feel, however, that numbers out of China need to improve,” LME RDM Sucden said.
As well as China, where recent manufacturing data was downbeat, data from Europe and the US has been equally uninspiring – Wednesday’s US durable goods orders, a key leading indicator, were lower.
This has raised hopes that central banks will provide yet more monetary stimulus, including a widely mooted rate cut by the European Central Bank next week and an extended duration of the US Federal Reserve’s quantitative easing programme. The FOMC meets next week as well.
The front-line economic calendar is light today – regular weekly US unemployment claims are scheduled – so this may allow the metals to further benefit from technical consolidation.
The bounce may be short-lived, however, with investment funds running large profitable short positions that are unlikely to be covered at current price levels. Rallies may be seen as an opportunity to add to these positions.
COPPER HOLDING ABOVE $7,000/T
Copper traded as high as $7,101 per tonne and then settled at $7,070, up $40.50 from the Wednesday close, holding comfortably above $7,000 after rallying from 18-month lows of $6,762.
Warehouse inventories fell a net 1,900 tonnes to 681,475 tonnes, while cancelled warrants – metal booked for removal – rose to a new record of 168,200 tonnes.
Aluminium was trading at $1,922, up $11, with inventories falling a chunky 8,075 tonnes to 5,159,000 tonnes.
In others, zinc drifted $1 lower to $1,918, averting a test of $1,900 again, with stocks falling 6,000 tonnes to 1,086,550 tonnes. Sister metal lead was $9 higher at $2,054 – inventories were down 350 tonnes at 258,450 tonnes, a fresh low since October 2012.
Nickel was $40 lower at $15,230 – inventories were down 96 tonnes at 175,764 tonnes from what were all-time highs. Tin was unchanged at $20,900, while stocks were down 125 tonnes at 14,120 tonnes.
Steel billet was neglected and stocks were unchanged at 77,480 tonnes. In the minors cobalt was indicated at $26,500/27,500 and molybdenum at $24,500/36,500.
(Editing by Mark Shaw)
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MINORS LATEST – Cobalt hits six-month LME highs on fears of DRC concentrates ban
April 23rd, 2013Cobalt traded at a six-month high of $27,500 per tonne on the LME on Monday, up from $27,200 on Friday, in reaction to the implication of a pending ban of copper and cobalt concentrates by the DRC (Democratic Republic of Congo), traders said.
The spot physical market jumped to around $12.40/13.20 per pound, basis 99.30 percent metal, while high-grade 99.80 percent stood at $13.50/14.30.
Even though Katanga’s provincial governor said he would not enforce the ban - Katanga is the sole copper/cobalt mining province – there has been some panic covering in the market, traders said.
Earlier this month the DRC’s mines and finance ministers signed a directive giving companies 90 days to clear their stocks of concentrate before the ban comes into effect, after which processing would have to be done in the country or heavy payments made to the government.
“There is a lot of uncertainty surrounding the DRC now, and because of this the price has probably risen around $1 per pound,” a trader said.
The DRC tried to introduce a similar ban on concentrates exports in 2007 and again in 2010 but each time the decision was reversed.
“Precedent has shown that, for the most part, these bans have been short-lived and ineffective given the many layers of vested interest that are bound up in the existing export structures and routings,” another trader said.
Nevertheless, after the long and almost uninterrupted downward drift in prices, the market may have decisively reversed now after hitting a floor of some $11.00 recently. As well, producers are not seen as abundantly offering metal.
On the LME, warehouse stocks have started to decline fairly consistently now from early-April record highs of 488 tonnes – today they fell five tonnes to 431 tonnes. Of this, only 292 tonnes are freely available because 139 tonnes are under cancelled warrant and booked for removal.
This could usher in a period of increased price volatility, to which cobalt has been prone in recent years.
“Without a DRC ban, we are looking at $14 to $15 – with the DRC, it could be ‘hold on to your hats’,” the first trader said.
(Editing by Mark Shaw)
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Base metals weaken on soft manufacturing data, copper near 18-mth lows
April 23rd, 2013Base metals fell across the board during bumpy LME premarket trading on Tuesday amid pressure from a string of mostly soft global manufacturing activity readings, which added to already-jittery sentiment in the complex, traders said.
Copper fluctuated violently, hitting and then bouncing off 18-month lows in heavy turnover – prices whipsawed around the short-term pivot level of $6,800 per tonne, losing some two percent from Monday.
“The weaker tone has returned, following the disappointing flash PMI manufacturing number in China,” William Adams of FastMarkets said.
China’ HSBC Flash Manufacturing PMI for April came in at 50.5, below the forecast of 51.4 and a drop from the March reading of 51.6, although a result above 50 still indicates continued expansion.
“Economic activity in China thus appears to be relatively subdued in the current month too, which is likely to preclude any noticeable recovery in metal prices in the near future,” broker Commerzbank said.
The April Flash Manufacturing PMI for France at 44.4 was marginally better than the predicted 44.2 but Germany’s reading of 47.9 undershot the predicted 49.0, while the eurozone outturn of 46.5 was below the hoped-for 46.8.
The US PMI is due later, as are a whole host of other US figures, suggesting volatile business flows for the rest of the day.
Wider macroeconomic sentiment continues to spark market volatility throughout the commodity sector as risk appetite waxes and wanes – gold and crude oil are both retreating this morning.
The patchy nature of the US economic recovery, continued eurozone sovereign debt overhanging and China’s moderating growth are all contributing to heightened market uncertainty, traders added.
“There has been some over-reaction in the recent sell-off from a fundamental perspective, but that should not distract attention from the fact that (supply/demand) balances in most markets are less supportive of prices than was the case a year or so ago,” broker Macquarie said.
This afternoon, US data includes PMI, the February US HPI, March US new home sales figures and the April US Richmond manufacturing index. Tuesday’s metals-sensitive data underperformed – US existing home sales at an annualised 4.92 million in March undershot the expected 5.02 million.
“Overall, the metals remain vulnerable but we expect bargain-hunting to provide support before too long because they are looking increasingly oversold,” FastMarkets’ Adams added.
COPPER SETS SUB-$6,800/T LOW, RANGES WIDELY
Copper business was volatile and busy from the outset, falling back from levels above $6,900 in Asia to as low as $6,762.25, its weakest since late-October 2011. The market then partly recovered to back above $6,800, but at $6,805 per tonne recently it was $130 lower, with turnover on Select approaching 20,000 lots by mid-morning.
In stocks data, inventories rose a net 8,525 tonnes to 621,600 tonnes, the highest since August 2003. Cancelled warrants – metal booked for removal – jumped 3.7 percent to a record 163,500 tonnes as queue-building operations continued.
Copper’s key short-term pivot remains $6,800; the market will be vulnerable to renewed and swift declines given the likelihood of option-related sales adding pressure, with $6,700 the next downside target.
Aluminium was in the middle of a roughly $20 intra-day range, trading at $1,884, an $8 loss. Inventories fell 650 tonnes to 5,176,200 tonnes but cancelled warrants climbed 82,650 tonnes or 4.1 percent to 2,070,175 tonnes, the highest since late in January.
Zinc was $19 lower at $1,863, although there was a substantial stock fall for the seventh day in a row. The 6,175-tonne drop took the total down to a six-month low of 1,098,600 tonnes, although metal is mostly moving between warehouses – surplus production is building this year.
Sister metal lead fell $23 to $1,987. The latest stock fall – a 1,025-tonne decline – took the stockpile down to 258,825 tonnes, the lowest since October 2012.
Nickel at $15,166 was $134 lower and just hovering above the previous day’s near-four-year lows of $15,092. Stocks were up 570 tonnes at a new record high of 174,546 tonnes.
Tin was $245 lower at $20,550, with inventories down 90 tonnes at 14,395 tonnes. Steel was neglected, while stocks held at 77,480 tonnes.
In the minors, cobalt was indicated at $26,500/27,750, close to six-month highs – stocks were down five tonnes at 426 tonnes. Molybdenum was quoted at $24,500/26,500.
(Editing by Mark Shaw)
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Copper could bounce on China buying in Q2 but gold dependent on physical buying, investor boost – Barclays
April 23rd, 2013Base metals are set to bounce in the second quarter after the heavy sell-off of recent weeks but gold faces downside risks if investor interest continues to unravel, Barclays Commodities said.
Ironically, copper’s sell-off in the absence of Chinese demand has come just as that country’s demand is picking up again, it said in a note.
While LME stocks have risen fast – up 41,000 tonnes in April to 612,000 tonnes so far, the highest in a decade – SHFE copper stocks are dropping and bonded stocks in Shanghais are falling fast, which the bank attributes to the opening of the arbitrage window.
“Scrap supply is tight which is also helping to boost refined copper buying and concerns about spot availability following various supply disruptions have all added to the buying interest,” it said. “We expect this to support to LME copper prices.
On the supply side, Rio expects a loss of 125,000 tonnes in copper-in-concentrate production and 100,000 in refined copper from its Bingham Canyon mine, where there was a dramatic landslide last week – the operations is likely to be closed for six months.
The government of the Democratic Republic of Congo announced a ban on all copper concentrate exports, which will further disrupt the market.
The broader macroeconomic backdrop remains supportive of gold, Barclays also said, even after it suffered a huge decline this week, tumbling below $1,325 per ounce, a level last seen in February 2011.
“Mass exiting of longer-term and short-term investor interest placed immense pressure on gold prices. The acceleration of gross shorts also increased the downward pressure on gold, but the increase in margin calls helped temper the losses,” the bank said.
Still, it does not think this week’s market move represents a switch to a low-gold price environment such as that of the 1990s.
Despite speculation that Cyprus may be about it may sell its excess gold reserves, central banks remain buyers.
In the near term, short-covering activity, the slowing pace of outflows from exchange-traded products (ETPs) and the response from the physical market will be key in setting the price floor.
The attraction of paper gold continues to fade. In the ETFs followed by FastMarkets, net holdings dropped a further 6.1 tonnes on Thursday to 2,359 tonnes – their lowest since November 2011 and more than 280 tonnes below the record total from late last year.
“Gold will need to find support from the physical market in the near term, but investor interest continuing to unravel poses the largest downside risk for prices, in our view, in the forthcoming weeks,” it said.
“Physical demand from China and India has been very strong since the price decline, but not strong enough to offset the ETP outflows,” Barclays said.
Premiums have risen across Asia, the Middle East and the Far East this week. Traders in Dubai have placed the kilo bar premium over the London spot price at about $2 per ounce while the Far East premium is as high as $5. In Singapore, the rate has soared to $2.50, while Turkey’s premiums have soared as high as $8-10.
The China Gold Association reported that retail sales are triple the normal daily averages, while gold sales in Mumbai totalled four tonnes on Tuesday and Wednesday compared with average daily sales of about one tonne during the first quarter, the Bombay Bullion Association said.
(Editing by Mark Shaw)
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Oversupplied nickel to remain weak, could fall further unless more output is cut – Macquarie
April 22nd, 2013The nickel market remains oversupplied, with large production cuts needed to rebalance the market, Macquarie said.
Prices will remain weak and could fall even further unless those cuts are made, the bank said in a report on Friday.
“From a fundamental perspective there is no reason for optimism about the nickel price in 2013 unless there are large-scale production cuts,” it said.
The nickel market has been in a sustained surplus since 2011, the latest International Nickel Study Group (INSG) data shows. Macquarie forecast a nickel surplus of 82,000 tonnes in 2013 assuming consumption growth for the year at 7.1 percent – mainly driven by China – compared with 97,000 tonnes last year.
Nickel prices resumed their downtrend over the past month as part of a general sell-off in exchange-traded commodities. Three-month LME nickel tumbled to its lowest since June 2009 at $15,180 on Thursday before it closed at $15,530.
Nickel last traded at $15,460, with stocks rising at a fresh all-time high of 172,296 tonnes today – they are up 27,000 tonnes since the start of this year and 78,000 tonnes since the start of 2012.
Macquarie attributed the weakness in the nickel market to lacklustre stainless steel production outside China – output is believed to have fallen year-on-year in Japan, Europe, Korea and Taiwan in the first three months of 2013.
Stainless steel production in China remains strong based on Macquarie’s estimates from industry sources. This is partly due to a surge in Chinese net exports, which rose almost 60 percent in the first quarter of 2013 on the same quarter of last year.
“Also negative for primary nickel is a reported increase in the use of secondary nickel in European stainless steel melts amid plunging prices for scrap,” it added. “CRU reports that [scrap] nickel is available at more than a 25-percent discount to primary nickel, compared with a more normal 10-percent discount.”
China has also built up sizeable stocks of nickel, importing huge quantities of ore from Indonesia and the Philippines for the production of nickel pig iron (NPI) and with the State Reserves Bureau adding more than 60,000 tonnes of cathode to its stockpiles since December.
“Nickel ore stocks could easily build to more than six months of use in China by the end of this year, softening the immediate impact of any disruption to exports in 2014, although nickel prices could be bid up into the fourth quarter of this year if people still perceive a risk to this trade,” Macquarie commented.
Macquarie identified the growing discount between Chinese domestic nickel prices and the LME nickel price as another indicator of oversupply. When LME prices rallied in the second half of last year, NPI prices remained largely stable, it said.
“With LME prices at $15,500-16,000 in recent weeks, the price of nickel in 8-13% NPI has been trading just below $15,000 in China. The recent collapse in LME prices to under $15,500 will most likely push NPI prices even lower,” Macquarie said.
(Editing by Mark Shaw)
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Base metals retreat as correction hits buffers, copper below $7,200/t
April 17th, 2013Base metals fell across the board during Wednesday LME premarket trading, with prices increasingly vulnerable to renewed downside pressure now that the brief snap technical correction to the Monday sell-off has stalled, traders said.
“It does look as though the markets remain nervous, which is not surprising – after such a dramatic pullback, there are likely to be regular pullbacks to test the whereabouts of underlying support,” William Adams of FastMarkets said.
Copper led the way, breaking below the $7,200 pivot level. This dragged the rest of the metals backwards although their losses were not extreme – prices held some way above the sell-off lows, trying to sustain a corrective bounce. Still, sentiment remains highly strung and the market is seen staying volatile in the short term.
“The direction prices head off in, once the dust settles, should therefore say a lot about the underlying strength or weakness of the global economy,” Adams said.
The latest economic newsflow added negative weight – the International Monetary Fund revised its 2013 global growth estimate lower to 3.3 percent year-on-year from 3.5 percent previously. The IMF also lowered its outlook on China’s economic growth to 8.0 percent from 8.1 percent.
For the complex, wider macroeconomic fundamentals have proved to be a drag recently. Mostly soft data from the US has been seen – Tuesday’s housing figures were mixed. Also, China’s forecast-missing GDP reading for the first quarter and continuing European debt concerns have further clouded the outlook for the quarter.
Declines have been compounded by the massive sell-off in gold, which is still struggling around $1,385 per ounce, some $55 above its two-year lows.
“The recent gold sell-off is a definite complexity we didn’t account for. A bit more fence-sitting is probably in order so we can see what happens with gold, and commodities generally,” broker RBC said.
On the economic newsflow side, later today weekly US crude oil inventories data will be released, while the latest US Federal Reserve Beige Book will be issued.
COPPER FALLS 1.6 PCT, BUT POSSIBLE DOWNSIDE CUSHION IN PLACE
Copper accelerated lower after a conclusive breach of $7,200, trading at $7,166 per tonne, down $119 from the previous close – sell-stops were seen. In stocks data, there was a net 3,400-tonne decline to 608,525 tonnes from what had been the highest level since September 2003.
Prices are, however, insulated to some extent above Monday’s 18-month low of $7,085 by supply-side developments – force majeure has been declared by Kennecott Utah copper on cathode shipments from its Bingham Canyon mine. Owner Rio Tinto has cut this year’s production estimate by 100,000 tonnes from its original estimates due to last week’s pit wall slide.
Aluminium was fluctuating either side of $1,900, trading recently at $1,903, an $11 decline. The market has been underpinned in a bounce from 30-month lows of $1,818 at the start of the week by technical covering and forward consumer buying.
Inventories fell 10,525 tonnes to 5,188,475 tonnes. There were no inflows, while regular outflows were seen from Detroit and Vlissingen.
In others, lead matched the trend, falling $17 to $2,048. The seventh successive daily fall in inventories – down 200 tonnes – saw the total stockpile drop to 259,475 tonnes, a fresh six-month low. Sister metal zinc eased to $1,879, down $17 – stocks were down 6,125 tonnes at 1,121,050 tonnes.
Nickel eased $154 to $15,551 but a mini-run of inventory declines from last week’s all-time highs continued, with stocks down 48 tonnes at 168,456 tonnes. Tin at $20,711 was $409 lower, while inventories were down 45 tonnes at 14,625 tonnes.
Steel billet was neglected – stocks were down 130 tonnes at 77,675 tonnes, the lowest since January 11. The minor metals were also neglected and inventory levels were static.
(Editing by Mark Shaw)
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