LIVE FUTURES REPORT 19/01: Zinc, lead, tin set fresh 2018 highs; prices supported by cancellations, weak dollar

Base metals prices on the London Metal Exchange were trading higher across the board on Friday January 19, supported by fresh cancellations of LME stocks and the weakening dollar.

The three-month zinc price set a ten-year high this morning of $3,438 per tonne. 24,175 tonnes of metal was freshly cancelled today from LME-listed warehouses in New Orleans.

On-warrant stock levels of zinc in the US port of New Orleans have fallen 65,925 tonnes - nearly 40% -since the beginning of January.

“Any close [for zinc] above $3383.50 per tonne tonight would see the sixth consecutive rise on the weekly chart. LME on-warrant stocks fall almost 20% [today] to 98,400 tonnes - back down to July 2017 levels when on-warrant inventory reached a multi-year low of 70,000 tonnes,” Marex Spectron noted.

Lead set also set a fresh high this morning of $2,625 per tonne, the highest since October 4, 2017. It is also being supported by cancellations, with 5,000 tonnes cancelled in Vlissingen this morning, on top of 7,750 tonnes cancelled in European locations on Thursday.

“Lead and zinc will [also] be supported by the news from the [International Lead & Zinc Study Group] that last year lead moved into a deficit of 169,000 tonnes and zinc 485,000 tonnes,” Malcolm Freeman, Kingdom Futures said.

The three-month tin price similarly set a fresh high this morning, hitting $20,595 per tonne - the highest since October 17, 2017, with stocks falling further to reach record lows.

Elsewhere in the complex, nickel and tin prices edged higher as the dollar continues to weaken while aluminium prices pushed upward this morning after data showed a slight moderation in Chinese output, analysts with ANZ Research noted.

“With winter curbs taking effect, production in December fell 1.8% year on year to 2.71 million tonnes,” the analysts said.

Base metals prices

  • The three-month copper price was up by $42.50 to $7,118.50 per tonne. Inventories increased a net 6,175 tonnes to 211,650 tonnes.
  • Aluminium’s three-month price was most recently trading at $2,265 per tonne, an increase of $24. Stocks edged up by 975 tonnes to 1,091,850 tonnes.
  • The three-month nickel price increased by $85 to $12,560 per tonne. Stocks dipped by 1,032 tonnes to 361,500 tonnes.
  • Zinc’s three-month price was up by $52 to $3,428 per tonne. Inventories declined by 50 tonnes to 179,975 tonnes.
  • The three-month lead price was most recently trading at $2,622.50 per tonne, an increase of $12.50. Stocks dipped by 400 tonnes to 139,250 tonnes.
  • Tin’s three-month price increased by $135 to $20,560 per tonne. Inventories dropped by 20 tonnes to 1,980 tonnes.

Currency moves and data releases

  • The dollar index was down by 0.3% to 90.24.
  • In other commodities, the Brent crude oil spot price was unchanged at $69.10 per barrel.
  • Today’s economic agenda is light today with UK retail sales and the preliminary University of Michigan consumer sentiment and inflation expectations from the United States of note.
  • In addition, US Federal Open Market Committee member Randal Quarles is speaking.
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