News

LME MORNING – Base metals spooked, copper battles to stay above $5,000/t

Date Aug 24 2015 09:15:11 Source:
Aug.24,2015(SHMET)--

 

Base metals were unsettled during Friday’s pre-LME sessions, despite a fairly strong close the previous session.

 

Negative data out of China overnight dampened sentiment, Caixin – previously HSBC – flash manufacturing PMI undershot expectations at 47.1 – below the 50 contraction level.

 

 “Copper is battling the $5,000 level and ignoring the strong close. There was some buying that came in this morning on the back of this close and then prices fell.  Tin sold off more than $400 in a minute, while aluminium edged towards the pivotal $1,544 level – a break under there and the metal could be in a world of trouble. Nickel prices could also drop out, and there would be no support,” a Category one trader said.

 

The sell-off was quick, and the metals have since inched higher, although they remained in negative territory. The volatility and the swiftness of the move, however, unsettled traders.

 

“We are all running a bit blind, it’s a bit scary at the moment to say the least,” the trader said.

 

Meanwhile, in currencies, the euro held steady as it traded around multi-week highs of 1.1254 against the dollar. The greenback lost some of its strength after dovish comments from the US FOMC minutes on Wednesday, which failed to give a clear indication as to when interest rate hikes will begin.

 

As well, yesterday, it was announced that Greek Prime Minister Alexi Tsipras is to resign as he called for a snap election in September.

 

In other data today, EU flash manufacturing and flash service PMI data was as expected at 52.4 and 54.3, respectively. The US also has flash manufacturing PMI scheduled.

 

Copper was last trading around $5,025 per tonne, a $94 loss, having dropped to a session low of $4,992. Business ticked up following the volatility and more than 8,500 lots had changed hands on Select so far.

 

Stocks were 200 tonnes lower at 353,825 tonnes, while cancelled warrants continued to increase, up 5,450 tonnes to 42,625 tonnes due to metal booked for removal in Busan, Johor, New Orleans, Singapore and Incheon Port.

 

The benchmark cash/threes spread was last at a backwardation of $6.50, while the September, October, November dates are also in a backwardation.

 

Aluminium at $1,555 was down $10 despite a 9,375 tonne reduction in both stocks and cancelled warrants to 3,320,725 tonnes and 42,625 tonnes respectively.

 

Nickel at $10,195 was down $210 although stocks were down 900 tonnes to 454,992 tonnes and cancelled warrants jumped 5,844 tonnes – predominantly due to metal booked for removal in Rotterdam. 

 

Zinc at $1,770 was down $46 on the close and stocks were up 600 tonnes to 505,450 tonnes.

 

Sister metal lead at $1,692 was $24 lower and inventories fell 1,975 tonnes. Still, the key move was cancelled warrants, which noted a 10,225 tonne increase to 49,125 tonnes, due to 5,225 tonnes of fresh cancellations in Bilbao, 2,200 tonnes in Barcelona, 1,150 tonnes in Busan and a 450 tonne increase in Genoa.

 

Tin dropped below $15,000 to last trade at $14,890 a $335 loss. The nearby spreads remained heavily backwardated, although the cash/threes had reduced to a backwardation of $95, having been at more than $500 earlier this week.

 

“The dominant holder on tin warrants stock has now been broken up into a few less than 50 percent holders each on Tom and Cash which has helped spreads relaxed further,” Triland said.

 

Steel, cobalt and molybdenum were all neglected with no changes to stocks.

 

 

 

 

Edited by SHMET

Base metals found support on Thursday during pre-market LME sessions, reacting to a weaker dollar fo

Date Aug 21 2015 08:58:47 Source:
Aug.21,2015(SHMET)--

Copper prices since stabilised to trade around $5,080 as they found support from a weaker dollar. Spreads have started to tighten, with the cash-3, Sept, October and November date all moving into a backwardation, while a dominant warrant holder remains in play, holding 50-79 percent. Three month prices on the LME are steady, following yesterday’s FOMC meeting as the industry is still unsure if the country will raise rates next month China is driving markets, and with uncertainty here, there is little to improve sentiment and traders said we could be bouncing along the bottom end of these levels for some time.

Edited by SHMET

LME MORNING – Base metals steady on dollar weakness, sentiment still nervous

Date Aug 21 2015 08:58:32 Source:
Aug.21,2015(SHMET)--

Base metals found support on Thursday during pre-market LME sessions, reacting to a weaker dollar following dovish comments from the release last night of the July FOMC minutes. 

 

The euro was last at 1.1152 against the dollar. Yesterday’s minutes raised concerns over persistent low inflation and gave no indication that a September US interest rate hike is a certainty.

 

The Fed’s policy board have been locked into a public debate over the correct timing of raising interest rates, which have been at near zero since December 2008.

 

“Although the sharp slowdown in Chinese growth, coupled with weakness evident in both the local stock market and currency are important variables for the Fed to consider, the central bank typically is very US-centric and seldom defers a rate decision based on overseas developments,” said INTL FCStone analyst Edward Meir.

 

Still, while prices were higher, sentiment is weak as continued global economic slowdowns do little to spark optimism.

 

“This is a real flattening out of the global economies almost like back to go and start all over again. It will take some time but if the markets are just about starting to form a base pattern they could stay there for a while so you should/could see some good business in granting option strangles,” Malcolm Freeman at Kingdom Futures said.

 

In data today, the key release will be the weekly US unemployment claims and existing home sales. Still, participants are likely to remain on the sidelines ahead of a swathe of data tomorrow.

 

“The market is likely to remain nervous in the next few days… Consensus is for a stabilisation of PMIs and even a slight improvement in China. This would be positive for financial markets and would probably result in a decline in volatility in steadier trading – at least for equity markets,” Credit Suisse said.

 

Copper at $5,053 per tonne was up $58 on the previous day’s close, while close to 6,000 lots have changed hands on Select so far. Stocks were down a net 575 tonnes to 353,625 tonnes, but cancelled warrants increased 9,875 tonnes to 37,175 tonnes, a one-month high following metal booked for removal in Johor and New Orleans.

 

In spreads, cash/threes were last at a contango of $3, while backwardations have appeared along the nearby curve out to November.

 

Aluminium at $1,572 was up $16 and stocks at 3,330,100 tonnes were the lowest since March 2009 after a 8,125-tonne reduction. Cancelled warrants were down 6,175 tonnes to 1,314,650 tonnes. Spreads for October remain backwardated, with Oct/Nov and Oct/3-month both at $5.

 

Zinc at $1,805 was $20 lower, while stocks increased 1,375 tonnes to 504,850 tonnes and cancelled warrants were up 700 tonnes to 78,325 tonnes. Lead at $1,706 was up $14, while both stocks and cancelled warrants were 2,075 tonnes lower at 196,700 tonnes and 38,900 tonnes respectively.

 

Nickel at $10,395 was $45 lower, although stocks fell 276 tonnes to 455,892 tonnes.

 

Tin increased $100 to $15,450 while cancelled warrants continued to grow, up 745 tonnes, due to metal booked for removal in Port Klang and Johor. Total stocks were up 180 tonnes to 7,165 tonnes. The spreads remain in a heavy backwardation – cash/threes are at $180, although this is down from the start of the week when it peaked to more than $500.

 

Steel, cobalt and molybdenum were all neglected. Cobalt noted a 35-tonne increase in stocks to 528 tonnes, the highest for a year, while cancelled warrants were down five tonnes to 44 tonnes. Cobalt’s inventory peak was 584 tonnes reached in February 2014.

 

 

Edited by SHMET

Gold jumps, multi-year lows erased on short covering

Date Aug 21 2015 08:58:15 Source:
Aug.21,2015(SHMET)--

Gold prices surged during Thursday’s US trading session as the multi-year lows seen a month ago have evaporated as short covering boosted the entire precious metal’s complex.

 

Gold for December delivery on the Comex division of the New York Mercantile Exchange was last up $25.50 or 2.3 percent to $1,153.40 per ounce. Trade has ranged from $1,132.10 to $1,153.70.

 

On July 24, spot gold touched $1,077.50 per ounce, the lowest price since April 2010. Prices remained at that level for a short period before climbing over the past few weeks.

 

The past two sessions have seen the yellow-metal jump to the highest price in over a month upon the release of the Federal Open Market Committee (FOMC) July meeting minutes.

 

Investors read the statement – especially the concern over the slowdown in the Chinese economy – as a dovish tone heading into the oft-discussed September FOMC meeting.

 

Federal Reserve Chairwoman Janet Yellen has expressed a desire to raise interest rates this calendar year after rates have been at near zero levels since December 2008.

 

“As for gold, we did in fact go out hard and far upon a limb last Monday when writing here regarding the net-short position by the public ‘specs’… strongly suggesting that the lows have been seen in gold in US dollar terms,” Dennis Gartman, editor and publisher of The Gartman Letter, said.

 

In a heavy US data day, weekly unemployment claims were at 277,000, near the forecast of 272,000 and holding below the psychological 300,000 mark.

 

Meanwhile existing home sales in July were at 5.59 million, above the forecast of 5.45 million. The Philly Fed Manufacturing Index in August was at 8.3, besting the 6.9 prediction.

 

Additionally, the CB leading index month-over-month in July declined 0.2 percent, missing the estimate of a 0.2 percent uptick.

 

Turning to US equity markets, the Dow Jones industrial average and S&P were down 1.3 percent and 1.2 percent respectively, while the dollar was 0.7 percent softer at $1.1195 against the euro.

 

As for the other precious metals, Comex silver for September delivery was last up 33.1 cents at $15.510 per ounce. Trade has ranged from $15.255 to $15.560.

 

Platinum for October delivery on the Nymex rose $19.90 to $1,033.0 per ounce, while the most-actively traded palladium contract was at $622.75 per ounce, up $13.0.

 

Edited by SHMET

Gold extends gains, climbs to five-week high

Date Aug 21 2015 08:58:01 Source:
Aug.21,2015(SHMET)--

Gold continued to climb higher on Thursday afternoon, maintaining the uplift provided by the dovish Federal Reserve July meeting minutes released overnight and a sliding stock market today.

 

The spot gold price was last at $1,150.0/1,150.5 per ounce, up $17 on the previous close and its highest in five weeks. Trade has ranged from $1,132.8 to $1,151.7 so far.

 

The July 28-29 FOMC meeting minutes suggested that the Fed may resist raising rates in September. According to Fed Fund Futures, the probability of a rate hike is now only roughly 30 percent.

 

The dollar weakened following the release of the minutes with the basket index last at 96.04.

 

“In line with our expectations, a short-covering rally occurred sooner rather than later,” FastMarkets analyst Boris Mikanikrezai said. “In the near-term, we expect that gold prices will continue to push higher, driven essentially by further short-covering.”

 

In a heavy US data day, weekly unemployment claims were at 277,000, near the forecast of 272,000 and holding below the psychological 300,000 mark.

 

Meanwhile existing home sales in July were at an annualised 5.59 million, above the forecast of 5.45 million. The Philly Fed Manufacturing Index in August was at 8.3, besting the 6.9 prediction. Additionally, the CB leading index month-over-month in July declined 0.2 percent, missing the estimate of a 0.2 percent uptick.

 

Earlier, the German PPI month-over-month in July was unchanged, above the consensus of a 0.1 percent dip.

 

In the other precious metals, silver was last at $15.49/15.54, up 22 cents. Platinum at $1,026/1,032 climbed $17 – its highest in around five weeks – and palladium at $618/623 was $10 higher.

 

Edited by SHMET
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