LIVE FUTURES REPORT 12/01: LME base metals push higher; zinc hits highest since August 2007

The three-month zinc price hit a high of $3,409 per tonne already this morning – the highest since August 2007.

“Momentum-based indicators show a strong uptrend in motion. A fresh 2018 high is likely to occur in the coming days,” Boris Mikanikrezai, Metal Bulletin analyst said.

“We remain constructive over a one-to-three month horizon, reinforced by the tightness in the LME zinc market from falling availability and backwardation in nearby spreads,” he added.

Zinc’s cash/three-month LME spread is at $26 per tonne backwardation, while over 37,000 tonnes of zinc has been cancelled from LME warehouses in New Orleans over the past week.

The majority of the complex is also being supported by a weakening dollar, the dollar index has softened gradually since mid-December.

The three-month nickel price has recovered $100 per tonne after falling over $300 at the close on Thursday, the metal is finding resistance at the $13,000-per-tonne barrier.

Copper prices edged $8 higher, while aluminium prices climbed $22.50 per tonne.

“Prices have been moving within ranges over the last few days as they get a feel for what the new year will be like, but there is plenty of support for prices to push higher,” one trader said.

The three-month tin price bucked the upward trend falling $15 per tonne but is still well supported as LME stocks continue to fall. 220 tonnes has been delivered out of LME-listed warehouses over the last three days.

Base metals prices higher bar tin

• The three-month copper price was up by $8 to $7,148 per tonne. Stocks increased a net 2,475 tonnes to 204,125 tonnes.
• Aluminium prices increased by $22.50 to $2,198 per tonne. Inventories dipped 1,450 tonnes to 1,086,875 tonnes with 16,000 tonnes freshly cancelled.
• The three-month nickel price was $100 higher at $12,725 per tonne. Stocks fell 2,298 tonnes to 365,994 tonnes with 2,670 tonnes re-warranted.
• Zinc’s three-month price increased by $15 to $3,401 per tonne. Inventories dipped 25 tonnes to 180,150 tonnes.
• The three-month lead price was $12 higher at $2,561 per tonne. Stocks were down 500 tonnes to 142,075 tonnes.
• Tin’s three-month price dropped by $15 to $20,210 per tonne. Inventories declined 120 tonnes to 2,115 tonnes.

Currency moves and data releases

• The dollar index was down by 0.5% to 91.40.
• In other commodities, the Brent crude oil spot price was unchanged at $69.10 per barrel.
• Data out already today showed China’s trade balance for December, in dollar-denominated terms, came in at a surplus of $54.7 billion, while the yuan-denominated balance stood at a surplus of 362 billion yuan, both surpassing expected and previous readings.
• Later, the market will be keeping a close eye on the US consumer price index and retail sales releases, which may have some bearing on the dollar.
• In addition, German Federal Bank President Jens Weidmann is speaking.
• Looking ahead to the weekend, key Chinese data including new yuan loans and M2 money supply are expected.