Lead market records deficit in January to June 2017

Date Aug 17 2017 15:04:31
The lead market was in deficit by 195 kt in January to June 2017 which follows a deficit of 172 kt recorded in the whole of 2016. Total stocks at the end of June were 4 kt higher than at the end of 2016. No allowance is made in the consumption calculation for unreported stock changes. 

World refined production during January to June 2017 from both primary and secondary sources was 5877 kt which was 11.5 percent higher than in the comparable months of 2016. Global demand was 706 kt higher. Apparent consumption in China totalled 2579 kt of lead in January to June 2017 which was 523 kt above the comparable period in 2016 and represented over 42 percent of the global total. For the USA, apparent demand has increased by 193 kt for January to June 2017 compared to the first half of 2016.

In June 2017, refined lead production was 990.7 kt and consumption was 1008.9 kt.


Edited by SHMET

Copper market records deficit in January to June 2017

Date Aug 17 2017 15:03:51
The copper market recorded a deficit of 41 kt in January to June 2017 which follows a deficit of 68 kt in the whole of 2016. Reported stocks fell during June and closed 71 kt higher than at the end of December 2016. No allowance is made in the consumption calculation for unreported stock changes, particularly in the Chinese government stockpile.

World mine production in January to June 2017 was 10.1 million tonnes which was 0.1 percent lower than in the same period in 2016. Global refined production for January to June 2017 was 11.67 million tonnes up 1.6 percent compared with the previous year with a significant increase recorded in China (up 329 kt) and a reduction in Chile (down 168 kt).

Global consumption for January to June 2017 was 11.71 million tonnes compared with 11.88 million tonnes for the same months of 2016. Chinese apparent consumption in January to June 2017 fell by 271 kt to 5659 kt compared to the same months of 2016 and represented just over 48 percent of global demand. EU28 production rose by 8 percent and demand was 1715 kt, 3.1 percent below the January to June 2016 total. 

In June 2017, refined copper production was 2016.5 kt and consumption was 2013.4 kt.

Edited by SHMET

Primary aluminium market in deficit in January to June 2017

Date Aug 17 2017 15:03:04
The calculated market balance for primary aluminium for January to June 2017 was a deficit of 1074 kt which follows a deficit of 1097 kt recorded for the whole of 2016. Demand for primary aluminium for January to June 2017 was 30.80 million tonnes 2008 kt more than the first half of 2016. Production in January to June 2017 rose by 1692 kt compared with 2016. Producer stock data is no longer published and total reported stocks fell by 314 kt during June and at the end of the month were 2033 kt which equated to 13 days’ demand and compares with 2761 kt at the end of 2016. Total stocks held in the four exchanges in London, Shanghai, USA and Tokyo were 1879 kt at the end of June 2017 which was 445 kt below the December 2016 total. No allowance is made in the consumption calculation for large unreported stock changes especially those held in Asia.

Overall, global production rose in January to June 2017 by 6 percent compared with the first six months of 2016. Chinese output was estimated at 16839 kt and this currently accounts for over 56 percent of the world production total. Chinese apparent demand was 10.2 percent higher than 2016. Chinese net exports were 173 kt in January to June and net exports of unwrought aluminium for the whole of 2016 were 255 kt. Net exports of aluminium semi manufactures from China rose from 1841 kt in January to June 2016 to 1955 kt in the first half of 2017.

Production in the EU28 fell by 0.5 percent and NAFTA output fell by 3.3 percent. EU28 demand was 143 kt higher than the comparable 2016 total. Global demand rose by 7 percent during January to June compared with the levels recorded one year previously.

In June 2017, primary aluminium production was 5115.3 kt and consumption was 5322.1 kt. 

Edited by SHMET

METALS MORNING VIEW – Asian equities rallied, that may reduce fear in the industrial metals

Date Aug 27 2015 09:04:56


The base metals were boosted by China’s interest rate and reserve requirement ratio cuts, which led to average gains of 1.1 percent, led by a 2.1 percent rise in copper to $5,056 – the recovery in confidence led to a strong rebound in equity market, at least initially, but this weighed on bullion prices that saw gold and silver fall 0.7 percent, platinum off 0.5 percent and palladium drop 5.3 percent.


This morning, despite a more bullish market in Asia, albeit a volatile one in China, the base metals are off an average of 0.2 percent, led by 0.7 percent falls in copper ($5,022) and zinc, aluminium is off 0.6 percent, lead is off 0.2 percent, while nickel is up 0.2 percent and tin is up 0.7 percent. Volume is stronger at 6,898 lots, indeed it has been stronger all week.


Precious metals are mixed, with bullion off around 0.6 percent with gold at $1,136, the PGMs are firmer with platinum up 0.5 percent at $981.90, while palladium is up 2.1 percent at $547, having fallen heavily yesterday.


In Shanghai, the base metals are for the most part firmer with average gains of 0.6 percent – nickel is the only metal that is lower today, it is down 0.3 percent, while copper is up 1.7 percent at Rmb 39,200 – copper was by far the strongest metal yesterday too, which again suggests the SRB may be in the market. Spot copper is up 0.5 percent at Rmb 39,250-39,400, the backwardation with the October futures is at an equivalent of $30 per tonne, while the LME/Shanghai arb window is open with the arb ratio at 7.83.


Precious metals are weaker in Shanghai with gold off 1.8 percent and silver down 1.2 percent – in other metals, steel rebar is up 0.5 percent and iron ore is steady at $53.45.


Equities had a volatile day yesterday – China’s rate cut gave markets a boost that saw the Euro Stoxx 50 close up 4.7 percen, but the Dow was up 2.7 percent at one stage, but then closed down 1.3 percent. In Asia, the tone is firmer again with the CSI 300 up 3.2 percent, the Nikkei is up 2.8 percent, the Hang Seng is up 0.3 percent, the Kospi is up 2.6 percent and the Australian ASX200 is up 0.6 percent. So if the equities have found a footing then that might calm the fears in the base metals, at least for a while, and in turn that could see some bargain hunting emerge – key then will be whether that leads to short-covering.


Currencies – the change in recent trends seems to be affecting the currencies too with the dollar rebounding, last at 94.21 after a low on Monday of 92.56, the euro is holding below recent highs, last at 1.1487, as is sterling at 1.5705, the yen is at 119.45, the rouble is at 68.92, but the aussie remains weak at 0.7116. The yuan is last at 6.4852 after a low yesterday of 6.5050, while the other emerging market currencies remain weak.


Economic data shows Japan’s Services PPI is firmer at 0.6 percent, later we get UK mortgage approvals, CBI realised sales and US data includes durable goods, crude oil inventories and FOMC member William Dudley is speaking at 1:30 BST.


This morning the base metals are consolidating yesterday’s gains, the downward trends dominate and the rebounds are fragile, but if some stability returns to the broader markets then there may be some relief rallies in the base metals. Much will then depend on whether short-covering gains momentum. Yesterday’s LME COTR data showed some short-covering, but it tended to go hand-in-hand with long liquidation so there was selling and buying, but if fear dies down then the short-covering could dominate for a while.


Gold rallied on safe-haven buying, if the tide has turned in the other markets then gold is likely to pull back to consolidate. With emerging market currencies still weak and in fear of further devaluation then interest in gold may not fade too much. The more industrial precious metals are also likely to benefit should markets become less fearful.




Overnight Performance                

BST       06:41:31       +/-   +/- %     Lots

Cu  5022      -34  -0.7%     3728

Al    1547      -9    -0.6%     1342

Ni    9585      20   0.2%      657

Zn   1725.5   -12.5      -0.7%     999

Pb   1670      -3.5 -0.2%     162

Sn   14200    100 0.7%      10

Steel     300 0     0.0%      Total

      Average (BM ex-Steel)      -0.2%     6898

Gold       1136      -7.4 -0.6%    

Silver     14.58     -0.1 -0.7%    

Platinum       981.9     4.9  0.5%     

Palladium     547 11   2.1%     

      Average PM       0.3%     



SHFE Prices 6:45 BST          Change % Change

Cu  39200    650 1.7%

AL 11860    -5    0.0%

Zn   14475    85   0.6%

Pb   13245    165 1.3%

Ni    74940    -250       -0.3%

Sn   101150  310 0.3%

Average change (base metals)      236.5          0.6%

Rebar    1951      10   0.5%

Au   237.1     -4.25      -1.8%

Ag   3361      -41  -1.2%



Economic Agenda

BST       Country Data      ACTUAL       Expected      Previous

12:50am       JPY SPPI y/y       0.6%      0.4%      0.4%

 9:30am       GBP      BBA Mortgage Approvals       46.0K     44.5K

11:00am       GBP      CBI Realized Sales         19   21

1:30pm  USD      Core Durable Goods Orders m/m       0.3%      0.6%

1:30pm  USD      Durable Goods Orders m/m         -0.4%     3.4%

3:00pm  USD      FOMC Member Dudley Speaks                  

3:30pm  USD      Crude Oil Inventories      1.0M      2.6M



Edited by SHMET


Date Aug 24 2015 09:19:05

Precious metals were stronger yesterday with average gains of two percent with gold prices up 1.9 percent and the others up between 1.7 and 2.2 percent – concerns about China and emerging markets causing contagion in broader markets seems to have refocused investors’ interest in bullion.


The base metals were mixed yesterday, closing with average gains of 0.4 percent, copper led on the upside with a 1.7 percent gain to $5,090, aluminium, zinc and lead were firmer, while nickel and tin were down an average of 0.9 percent.


This morning the gold prices are leading the way on the upside with a 0.8 percent gain to $1,164.40, the rest are up between 0.4 and 0.7 percent.


Base metals are mixed this morning, but generally little changed with copper off 0.2 percent at $5,077.50, the rest are up between 0.1 and 0.3 percent. Volume has been average with 3,883 lots traded as of 06:05 BST – so far this week volume at this time of day has averaged 3,212 lots, down from an average of 10,523 lots last week, so the markets do seem to have settled down after the post-Chinese devaluation gyrations.


In China, the base metals are for the most part firmer by an average of 0.6 percent with copper up the most with a 1.1 percent gain to Rmb 38,990, while nickel and tin are negative, with tin down 1.2 percent and nickel off 0.4 percent. The latter two may be off as China has forced some heavy industry to halt production to clean the air around Beijing, this is especially affecting the steel industry, which could be impacting the stainless steel and tin-plating industries.


Spot copper in Changjiang is up 0.9 percent at Rmb 39,100-39,200, the backwardation with the October contracts is at an equivalent of $32 per tonne and the LME/Shanghai copper arb ratio is at 7.77, which means the arb window is open – this finally seems to be underpinning copper, but reports suggest copper is being imported for financial reasons, rather than for consumption – that said, perhaps the SRB are also in the market.


Other metals in China are mixed, gold is up 3.2 percent, silver is up 1.9 percent, steel rebar is unchanged, while iron ore is weaker at $55.80.


Equities around the global are now in retreat as concerns about China and emerging markets and the possible contagion from these regions to developed markets seems to be weighing on sentiment. Yesterday, the Euro Stoxx 50 closed off 2.2 percent and the Dow closed down 2.1 percent and Asia is down heavily this morning with the Nikkei off 2.8 percent, the Hang Seng is off 2.4 percent, the CSI 300 is down 4.4 percent and the Kospi is off 1.7 percent. The weakness looks set to circumnavigate the globe again as the pre-market Dax is off around 3 percent.


Currencies – despite continuing emerging market currency weakness the dollar index is falling too, last at 95.44, while the euro, sterling and yen are stronger at 1.1290, 1.5696 and 122.87. The aussie is flat-lined at 0.7305, the rouble is weak at 67.44, as is the yuan at 6.4522 and the rupee, rupiah and rand are all weaker, while the real is consolidating in low ground.


The economic data is focused on flash PMI – so far Japan and China’s manufacturing PMIs have come in lower than expected at 51,9 and 47.1 respectively. Later we get manufacturing and services PMI data out across Europe and the US, with data on UK public sector borrowing requirements and EU consumer confidence – see table below for more details.


Given the poor Chinese PMI data it is somewhat surprising that the base metals are not weaker, but it looks as though a lot of bad news is now priced-in. The rallies underway are likely to be driven by non-fundamental factors, such demand for financial reasons in China and general short-covering. We have been expecting short-covering rallies and now these seem to be getting underway. Given how bearish sentiment has been, there may be a considerable counter-trend move, but conversely the bearish fundamentals are likely to encourage scale up selling too. For now, we expect the rallies to run further.


Gold prices are leading a broad based rally in the precious metals driven by safe-haven demand, but in turn that is likely to be fuelled by short-covering. As the fund gross short positions have become large there may well be room for considerable rallies.




Overnight Performance

BST 06:05:55 +/- +/- % Lots

Cu 5077.5 -12.5 -0.2% 1731

Al 1573 5 0.3% 1158

Ni 10350 15 0.1% 641

Zn 1814 1 0.1% 185

Pb 1710 4 0.2% 139

Sn 15335 40 0.3% 29

Steel 300 0 0.0% Total

Average (BM ex-Steel) 0.1% 3883

Gold 1164.4 9.5 0.8%

Silver 15.64 0.11 0.7%

Platinum 1034.7 3.7 0.4%

Palladium 624.5 3.5 0.6%

Average PM 0.6%



SHFE Prices 6:06 BST Change % Change

Cu 38990 430 1.1%

AL 12035 45 0.4%

Zn 14830 100 0.7%

Pb 13350 20 0.2%

Ni 80600 -360 -0.4%

Sn 106000 -1270 -1.2%

Average change (base metals) 236.5 0.1%

Rebar 2033 0 0.0%

Au 242.8 7.45 3.2%

Ag 3528 66 1.9%



Economic Agenda

BST Country Data ACTUAL Expected Previous

2:35am JPY Flash Manufacturing PMI 51.9 52.10 51.20

2:45am CNY Caixin Flash Manufacturing PMI 47.1 48.10 47.80

 7:00am EUR GfK German Consumer Climate 10.20 10.10

8:00am EUR French Flash Manufacturing PMI 49.8 49.6

8:00am EUR French Flash Services PMI 52.1 52

8:30am EUR German Flash Manufacturing PMI 51.7 51.8

8:30am EUR German Flash Services PMI 53.7 53.8

9:00am EUR Flash Manufacturing PMI 52.3 52.4

9:00am EUR Flash Services PMI 54.10 54.00

9:30am GBP Public Sector Net Borrowing -2.3B 8.6B

2:45pm USD Flash Manufacturing PMI 53.9 53.8

3:00pm EUR Consumer Confidence -7 -7



Edited by SHMET