LIVE FUTURES REPORT 24/08: Vaccine optimism boosts LME base metals complex; copper price up 1.2%

Three-month base metals prices on the London Metal Exchange were up during morning trading on Monday August 24, with market optimism over a Covid-19 vaccine rising after US regulators approved the use of convalescent blood plasma as a treatment option, while continued weakness in the US dollar index also provided support.

Total coronavirus deaths in the United States have now surpassed 175,000 according to the Centers for Disease Control and Prevention, with the Americas remaining the worst-hit region globally. The World Health Organization estimates confirmed cases out of the Americas are now at more than 12 million.

With the economic fallout of the virus still being felt globally, this morning’s uptick across Asian equities has filtered through to LME base metals, with the MSCI Asia-Pacific index pushing 0.8% higher over the morning and consolidating close to a six-month high.

Topping the LME base metals complex over the morning, the three-month copper price was recently trading at $6,553 per tonne, pushing firmly above nearby resistance at $6,500 per tonne after Friday’s trading saw the red metal dip below the mark, to close at $6,490 per tonne.

Turnover was thin over the morning, with LME copper’s 3,500 lots topping the complex as of 10am London time. Stock declines continue for the red metal over August, with some 5,575 tonnes removed out of LME-registered warehouses in Kaohsiung, New Orleans and Rotterdam.

LME on-warrant copper stocks now stand at 53,250 tonnes, with total stocks now down to 97,900 tonnes, while the metal’s benchmark cash/three-month spread continues to trade in backwardation, recently at $16.75 per tonne.

“The only observation on the metals prices this morning is that usually when there is nothing going on prices tend to drift lower but so far today all the metals are currently in positive territory,” Kingdom Futures director and chief executive Malcolm Freeman said in a morning note.

“There is certainly evidence of more investment money entering the metals markets no doubt aided by the fact that investors saw share dividends collapse in Q2 and are seeking yields elsewhere, and with so many articles in the press in recent times predicting a boom in metals prices over the next two years it is hardly surprising,” he added.

Other highlights

  • Elsewhere in the complex, the three-month nickel price was 1.1% higher over the morning, recently trading at $14,930 per tonne, with the metal’s underlying price now testing resistance at the $15,000-per-tonne level.
  • Meanwhile, aluminium futures were 0.4% higher over the morning, recently trading at $1,775.50 per tonne, while a fresh cancelation of some 13,125 tonnes of material out of warehouses in Port Klang could see queue waiting times for the removal of primary aluminium lengthen.
  • In other commodities, Brent crude oil futures were down by 1.31%, recently trading at $45.17 per barrel.
  • The West Texas Intermediate (WTI) was recently at $42.60 per barrel, a rise of 0.90%.
  • Meanwhile, the US dollar index remained in negative territory, recently trading at 93.04.
What to read next
The publication of Fastmarkets’ assessments of Shanghai bonded aluminium, zinc and nickel stocks for April 30 were delayed because of a reporter error. Fastmarkets’ pricing database has been updated. The data effective for April 30 was published on May 7 as a result. The following assessments were affected:Shanghai aluminium bonded stocksShanghai zinc bonded stocksShanghai nickel […]
Global physical copper cathodes premiums were mixed in the week to Tuesday April 15, with US market moving down, Europe rising and Asia holding largely steady.
How much Canadian aluminium is being diverted from the US to Europe, when will it arrive and what impact will it have on premiums? The market appears to be split, but that could all change at the end of June, sources told Fastmarkets in the week to Thursday April 17.
Tariffs are creating a short-term period of volatility, but are not shifting conviction on the long-term fundamentals of the copper market, the chief executive officer of Rio Tinto Copper has said
Producers of copper appear to be adopting the public mantra of “keep calm and carry on” while trade tensions escalate. But this belies an underlying mood of concern that not just they, but the wider industry, has assumed
How tariffs, economic uncertainty and innovation are shaping the future of US copper production