METALS MORNING VIEW 24/01: Metals prices consolidate

The base metals for the most part are little changed this morning, Tuesday January 24, lead prices are up 0.6%, copper and nickel prices are both up 0.3% with three-month copper at $5,827 per tonne, while aluminium, zinc and tin prices are off 0.1%. Volume has been average with 6,931 lots traded as of 06:58 GMT.

In precious metals, spot platinum prices are up 0.2%, palladium prices are little changed, silver prices are off 0.4% and gold prices are down 0.2% at $1,214.65 per oz.

Base metals were bullish on Monday with gains seen across the metals ranging between 0.2% for tin and 1.5% for zinc, with copper, nickel and lead prices up around 0.9%, while aluminium prices closed up 0.3%. Copper prices closed at $5,757.50 per tonne.

In precious metals on Monday, palladium prices dropped 1.8%, the rest were up between 0.4% and 0.8%, with gold prices closing at $1,217.35 per oz.

In Shanghai, lead prices are down 0.7%, nickel prices are off 0.3%, while the others are firmer, with tin up 0.4%, copper prices are up 0.2% at 46,880 yuan per tonne and the rest are little changed. Spot copper prices in Changjiang are little changed at 46,780-46,980 yuan per tonne, the spread between spot and the March futures is at an equivalent of around $15 per tonne backwardation and the LME/Shanghai copper arb ratio is at 8.07.

In other markets in China, May iron ore prices on the Dalian Commodities Exchange are up 6.1%, steel rebar prices on the SHFE are up 3.5%, while the precious metals are little changed. In international markets, spot Brent crude oil prices are up 0.5% at $55.63 per barrel.

Equities were weaker on Monday with the Euro Stoxx 50 off 0.8% and the Dow closed down 0.1% at 19,799.85 – this morning the Nikkei is off 0.6%, the Hang Seng is up 0.2%, the CSI 300 and Kospi are little changed, while the ASX 200 is up 0.7%.

In FX, the pullback in the dollar index has paused, the low on Monday was 99.91, the index was recently quoted at 100.25, the euro likewise is consolidating at 1.0740, as are the sterling at 1.2470, the yen at 113.16 and the Australian dollar at 0.7565. The yuan is trending higher again, albeit not in a straight line, it was last at 6.8505 and most emerging market currencies are quietly firmer, which suggests little concern on the geopolitical front.

The economic agenda is busy today with a host of flash PMI data coming out. Data already out shows Japan’s PMI rising to 52.8 from 52.4, later there is PMI data out in France, Germany, the EU and the USA. In addition, there is the UK court ruling regarding Article 50, UK public sector borrowing requirement, US existing home sales and Richmond manufacturing index – see table below for more details.

The base metals are split into three camps, nickel and tin are weak and looking vulnerable, we wait to see if the strength in other metals leads to bargain hunting; aluminium is the opposite, prices are now consolidating having raced higher since early January, while copper, zinc and lead prices are edging higher and look well placed to extend gains, but seem in no hurry to do so. Overall, sentiment seems to remain bullish, but in the run-up to the Chinese Lunar New Year, we would expect consolidation and further choppiness as trading volumes start to thin.

The precious metals have had a strong run, the markets are still waiting for the US administration to announce more policy and in the absence of any shocks, consolidation may well set in.

Metal Bulletin publishes live futures reports throughout the day, covering major metals exchanges news and prices.

Overnight Performance

 

 

 

GMT

06:58

+/-

+/- %

Lots

Cu

5827

16.5

0.3%

2278

Al

1848

-2

-0.1%

1155

Ni

9810

25

0.3%

2084

Zn

2789

-4

-0.1%

1146

Pb

2335

15

0.6%

247

Sn

20225

-20

-0.1%

21

 

Average

 

0.1%

        6,931

Gold

1214.65

-2.7

-0.2%

 

Silver

17.118

-0.077

-0.4%

 

Platinum

980.4

2.4

0.2%

 

Palladium

773.1

0.1

0.0%

 

 

Average PM

 

-0.1%

 



 

Economic Agenda

 

 

 

 

GMT

Country

Data

Actual

Expected

Previous

12:30am

Japan

Flash Manufacturing PMI

52.8

52.3

52.4

 8:00am

France

French Flash Manufacturing PMI

 

53.4

53.5

 8:00am

France

French Flash Services PMI

 

53.2

52.9

8:30am

Germany

German Flash Manufacturing PMI

 

55.5

55.6

8:30am

Germany

German Flash Services PMI

 

54.6

54.3

9:00am

EU

Flash Manufacturing PMI

 

54.8

54.9

9:00am

EU

Flash Services PMI

 

53.9

53.7

9:30am

UK

EU Membership Court Ruling

 

 

 

9:30am

UK

Public Sector Net Borrowing

 

6.7B

12.2B

2:45pm

US

Flash Manufacturing PMI

 

54.6

54.3

3:00pm

US

Existing Home Sales

 

5.54M

5.61M

3:00pm

US

Richmond Manufacturing Index

 

7

8



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