METALS MORNING VIEW 13/04: Metals rebound, China trade data supportive

The base metals are rebounding this morning, Thursday April 13, after what has been a week or so of weaker prices.

On average the base metals are up an average of 1.4%, spread between gains of 1.1% for aluminium and 1.8% for tin, with three-month copper prices up 1.6% at $5,714 per tonne. Volume has been strong with 10,537 lots traded as of 06:45 BST. This comes after a 1.2% average drop on Wednesday. The question now is whether today’s rebound was short-covering ahead of the long Easter weekend or whether dip-buying has started.

Gold and silver prices are consolidating, down 0.2% and 0.1% respectively, with spot gold prices at $1,283.92 per oz, having been as high as $1,288, while the PGMs are up around 0.2%. However on Wednesday, gold and silver prices climbed 0.9%, platinum prices were up 0.4%, while palladium prices dropped 0.5%.

In Shanghai this morning, base metals prices are mixed, copper prices are down 0.9% at 46,200 yuan per tonne, nickel prices are down 1%, aluminium and tin prices up 0.2%, while lead prices are up 1% and zinc has rebounded 2.1%. Spot copper prices in Changjiang are down 1.4% at 45,820-46,020 yuan per tonne and the LME/Shanghai copper arb ratio has weakened again to 8.06, which indicates the rebound has so far been seen in LME prices more than in Shanghai – again this could be a sign of short-covering as the LME will be closed on Friday and Monday.

In other metals in China, September iron ore futures have rebounded after earlier weakness, they are up 0.5% on the Dalian Commodity Exchange, while on the Shanghai Futures Exchange, steel rebar prices are up 0.4%, gold prices are up 0.7% and silver prices are up 1.1%. In international markets, spot Brent crude oil prices are up 0.5% at $55.84 per barrel and the yield on the US ten-year treasuries has eased further to 2.24%, another sign that money is shifting to safety.

Equities were slightly weaker on Wednesday with the Euro Stoxx 50 closing down slightly, while the Dow closed down 0.3% at 20,591. This morning, Japan is showing more concern as the stronger yen hurts exporters, which has seen the Nikkei drop 0.7%. The ASX 200 is weaker by 0.8%, the CSI 300 and Hang Seng are up 0.2% and the Kospi is up 0.7%.

The dollar index accelerated lower following comments from US President Donald Trump that he thought the dollar had risen too much since his election victory, the index has fallen to 100.08. The euro has rebounded recently at 1.0672, as has the Australian dollar at 0.7594, while the sterling at 1.2570 and the yen at 109.04 are rallying.

In emerging markets, the yuan has rebounded, it was recently quoted at 6.8700 and most other emerging market currencies are strengthening too – all a countermove against a weaker dollar, but also suggests a rebound in confidence, which may well help to continue support a rebound in the metals too.

Data out already showed a pick-up in China’s trade surplus with exports and imports both picking up, which suggests a healthier global economy. Later there is data out on CPI in France and Germany, leading indicators in the UK, with US data showing PPI, University of Michigan consumer sentiment and inflation expectations and natural gas storage – see table below for more details.

The base metals have been on a back footing with prices pulling back to test support levels, many of which have given way, this has especially been the case in zinc and copper where prices fell to levels not seen since early-January. Given the loss of upward momentum since February it is not so surprising that stale long liquidation has been seen and the drifting trends have attracted some short selling too. The higher prices earlier in the year had attracted scrap and hoarded metal out of the woodwork, which will have needed to be absorbed – another reason why prices have been capped in recent months.

Key now will be whether bargain hunting starts to emerge, we are after all still in the early stages of the seasonally strong second quarter. Also with Trump and Chinese president Xi Jinping, appearing to have had constructive meetings last week, it seems less likely that trade wars will materialise, which again will help foster global growth. As such, we remain quietly bullish for the base metals.

Gold prices remain strong as geopolitical tensions are running higher and because the countdown to the French presidential election is now on, with the first round on April 23. Silver prices broke higher on Wednesday, while the PGMs are back at the higher levels of their recent ranges.

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

What to read next
After a month-long consultation period, Fastmarkets is amending the below specifications, following no negative feedback from market participants and internal data analysis. The following changes will take place: The new specifications are as follows, with amendments in italics: MB-CU-0002 Copper grade 1 cathode premium, ddp Midwest US, US cents/lb Quality: Grade A 99.9935% min copper cathode conforming to LME […]
The global copper market has finally received the widely anticipated news that imports to the US will be tariffed from August 1. The finer details of the tariffs, including their scope, and whether key copper-exporting nations like Chile, Canada and Peru will be exempt, remain unclear.
LME copper prices took a significant hit following US President Donald Trump's announcement of a potential 50% tariff on copper imports. The uncertainty surrounding the timeline and implementation of the tariff has left market participants hesitant, with analysts noting its immediate impact on price momentum and trading activity.
Fastmarkets has launched MB-AL-0424 Aluminium P1020A premium, fob Indonesia, $/tonne on July 9 due to an expected increase in Indonesia-origin aluminium exports. MB-AL-0424 Aluminium P1020A premium, fob Indonesia, $/tonneQuality: P1020A or 99.7 % Minimum Al purity (Si 0.10% max, Fe 0.20% max) in line with LME specifications. Ingot, T-bar, sowQuantity: Min 500 tonnesLocation: FOB IndonesiaTiming: […]
To increase the transparency of our methodology, Fastmarkets clarifies that the quotation period of the MHP nickel payable indicator is the month of delivery, or the month M. Any data points Fastmarkets received otherwise will be normalized to the M month based on the monthly spreads of the prevailing exchange-traded Class-1 nickel reference price, or […]
'Probably miscalculated’ assumptions at Kakula mine force Ivanhoe to overhaul entire Kamoa-Kakula complex, explains CEO Marna Cloete.