Statistics

METALS-LME nickel extends savage selloff on weak demand, record stocks - RTRS

Date Apr 01 2015 09:25:47
Apr.01,2015(SHMET)--

(Reuters) - London nickel tumbled three percent to near six-year lows on Tuesday on the back of momentum selling and was set to end the month down nearly 10 percent, as weak stainless steel demand and record supply pummelled prices.

Nickel prices have nearly halved since hitting two-year highs above $21,000 last May, as an expected supply crunch in China failed to arise and LME stocks swelled to record peaks.

"The market last year got itself into a pretty consensus view of Indonesia's ore exports exiting the market and providing the ground work for a supply crunch in China and hence a price spike," said analyst Lachlan Shaw of UBS in Melbourne.

"It seems to me that the supply crunch and price spike thesis is getting pushed further out," he said.

Three month nickel on the London Metal Exchange extended a selloff to $12,400, its weakest since May 2009, before paring losses to $12,740 by 0200 GMT, down 9.6 percent for the month and almost 16 percent for the year to date.

LME stocks are sitting at records above 430,000 tonnes, equivalent to almost three months of global use.

Traders said selling by momentum-based funds had driven the powerful selloff. The price fall led to some brief arbitrage opportunities for LME nickel on Tuesday before prices partly recovered, a trader said.

In other metals, LME copper was flat around $6,077 a tonne after after early gains of around half a percent, following a drop of nearly 2 percent on Friday.

The most-traded June copper contract on the Shanghai Futures Exchange steadied at 43,630 yuan ($7,033) a tonne, while SHFE nickel stayed mired down 3.7 percent.

A drop off in China's property sector is hurting demand for metals such as for copper and nickel, used both in construction and in appliances to fit out new properties.

China on Monday courted home buyers with a bigger tax break as it cut down payment requirements for the second time in six months, stepping up a fight against sliding house prices that is imperilling the world's second-biggest economy.

In news, aluminum maker Alcoa Inc said on Monday it will shut its only remaining smelter in Brazil, the latest victim of a toxic mix of weak metal prices and high energy costs.

($1 = 6.2040 Chinese yuan renminbi)

 

Edited by SHMET

METALS-Ample supply sends nickel to its lowest since 2009 - RTRS

Date Apr 01 2015 09:25:30
Apr.01,2015(SHMET)--
  • Copper recovers, but Chinese demand subdued
  • LME drops proposal to stop issuing nickel warrants in Malaysia

(Reuters) - Nickel hit its lowest price in nearly six years on Monday on worries over faltering demand for stainless steel and record inventories, while copper recovered part of Friday's loss of nearly 2 percent.

London Metal Exchange (LME) nickel ended down 3.1 percent at $12,880 a tonne, extending Friday's 2.9 percent fall. The metal used widely in the manufacture of stainless steel had earlier dropped to $12,795 a tonne, its lowest level since May2009.

This was despite the LME announcing that it had withdrawn its proposal to stop issuing nickel warrants or ownership titles in Malaysia after government reassurances that its new tax reforms will not affect metal stored in the country.

Investors had been worried that the new tax might push nickel out of Malaysian warehouses and on to the market, but continued to bet the metal lower even after the LME announcement.

Malaysia stores about 210,000 tonnes of nickel, or almost half of the LME's inventories, which the latest stocks report pegged at 435,048 tonnes - a record high.

"Everything is pointing to a very soft physical market in nickel as there are no supply-side problems or issues to help it," said Robin Bhar, analyst at Societe Generale in London.

Demand for nickel pig iron in China did not pick up as strongly as expected after the Lunar New Year holidays, industry sources said last week, with stainless steel producers set for lower exports in the face of tariff barriers.

By contrast, LME copper recovered part of Friday's fall, closing 0.5 percent down at $6,082 a tonne, though buying from top consumer China has been blunted by a recent increase in prices.

"Until we see evidence of a sustained pick-up in Chinese industrial activity, we think there's very little upside," said Joel Crane, an analyst with Morgan Stanley in Melbourne.

Data due this week includes an official gauge of China's factory sector in March. Activity probably contracted for a third straight month, a Reuters poll showed, reinforcing expectations that Beijing will have to step up policy easing to support economic growth.

Friday's key U.S. jobs report will add to the seesaw debate over when the Federal Reserve will spring an interest rate increase.

In other metals, aluminium was up 0.9 percent at $1,798 a tonne, while zinc gained 1.3 percent to $2,109. Lead ended flat at $1,825 and tin fell by 0.9 percent to $17,050.

 

Edited by SHMET

METALS-London copper set for 3rd weekly gain as mine supply drops - RTRS

Date Mar 30 2015 09:07:33
Mar.30,2015(SHMET)--
  • Lead on track for 6 pct monthly gain on China demand
  • ShFE launches nickel, tin contracts
  • Coming up: Fed Chair Yellen speaks at 1945 GMT

(Reuters) - London copper fell on Friday but was set for its third straight weekly climb, supported by mine closures in key producer Chile due to heavy rains and a slow pick-up in seasonal demand from top consumer China.

"Copper has had a pretty good run over the past month, leading the complex as usual," said analyst Daniel Hynes of ANZ in Sydney.

"But if we're going to see any sustainability in this rally, we'd want some positive data following through, which we haven't really seen just yet."

Three-month copper on the London Metal Exchange was down 1.1 percent at $6,105 a tonne at 0748 GMT. That erased gains from the previous session, when prices hit their highest since Jan. 2 at $6,294.50.

LME copper was on course for a weekly gain of around 0.9 percent, its first three-week winning streak since mid-2014.

The most-traded June copper contract on the Shanghai Futures Exchange cut losses to end down 0.1 percent at 43,770 yuan ($7,045) a tonne.

Shanghai Futures Exchange launched its nickel and tin contracts on Friday. Open interest on the most active July nickel contract stood at 14,364 lots, while tin stood at 1798 lots.

"It launched smoothly," a Shanghai-based trader said.

A trader said that ShFE tin was well below LME prices, cutting the attraction of imports, however nickel prices were much more closely aligned, suggesting imports may be profitable.

"The negative arb on tin is pretty big compared to the LME. A lot of people only paid attention to nickel because it was pretty close to a positive arb," the trader said.

A positive arbitrage, or price differential, would encourage imports of nickel and may help put a floor under LME prices. LME nickel fell half a percent. LME lead is on track to rise about 6 percent in March, after nearly 100,000 tonnes of LME stocks were made ready to ship out this week, cutting off available supply.

Pollution and a lead poisoning scandal over the past couple of years in China have hit lead production, added ANZ's Hynes.

"You marry that up with what is some of the more positive data trends at the minute, being the autosector in China - it creates a ... fairly bullish scenario," he added.

China's imports of lead concentrates surged by 44 percent in February.

The dollar traded broadly higher in Asia, after an upbeat U.S. jobs report. A stronger dollar erodes the purchasing power of those paying for commodities with other currencies.

Elsewhere, a U.S. judge on Thursday refused to dismiss antitrust litigation accusing a variety of Wall Street banks and commodity merchants of conspiring to drive up aluminium prices by reducing supply.

 ($1 = 6.2103 Chinese yuan renminbi)

Edited by SHMET

METALS-London copper off 2-1/2 mth peak on slightly firmer dollar - RTRS

Date Mar 26 2015 09:28:10
Mar.26,2015(SHMET)--
  • China copper demand growth seen at 0.5 percent this year- AME
  • ShFE copper curve narrows to near flat, shows sluggish demand
  • Coming Up: U.S. Durable goods orders Feb at 1230 GMT

(Reuters) - London copper slipped on Wednesday from more than two-month highs hit the previous session as the dollar firmed, but expectations of falling mine supply supported prices.

The dollar clung to modest gains early in the session, partly after U.S. consumer prices rebounded in February keeping the Federal Reserve on course to raise interest rates this year.

A stronger dollar erodes the purchasing power of buyers paying with other currencies.

Copper demand from top consumer China is picking up only slowly after Lunar New Year.

"We see 0.5 percent demand-growth for copper this year, the lowest since 2006 ... it's not looking like there will be robust demand-growth from consumers," said analyst Matthew Fusarelli at AME Group in Sydney.

He added that AME sees a 410,000-tonne surplus this year, but said that could dwindle on supply threats.

"I think copper this year will do better than many expect."

Three-month copper on the London Metal Exchange had slipped 0.7 percent to $6,105 a tonne by 0304 GMT. It ended the previous session little changed after stretching to $6,203.50 a tonne - its highest since Jan. 05.

LME copper surged more than 10 percent trough-to-peak over the week to Tuesday and prices are entering a higher band of consolidation, underpinned by the 100-day moving average at

6,120.

The most-traded June copper contract on the Shanghai Futures Exchange also sagged 0.7 percent to 43,590 yuan ($7,020) a tonne.

Reflecting subdued demand, front-month Shanghai futures prices were trading almost level with benchmark prices, down from more than 500 yuan higher in late February.

Euro zone businesses ramped up activity in March as the European Central Bank started printing money to spur economic growth, while a slowdown among Chinese factories fuelled expectations of more monetary stimulus.

With no end in sight to a drought that has blighted Chile for the last several years, the government will invest in desalinization plants and reservoirs, the country's president said.

The drought is hampering copper output in the world's top exporter and driving energy prices higher.

Elsewhere, Malaysia plans to reach a solution with London Metal Exchange (LME) over a new goods and services tax on metals traded or stored in the country's bonded zones before an April 1 deadline, the deputy finance minister said on Tuesday.

($1 = 6.2090 Chinese yuan renminbi)

 

Edited by SHMET

METALS-London copper comes off 2-1/2 month high after China flash PMI - RTRS

Date Mar 25 2015 08:43:45
Mar.25,2015(SHMET)--
  • Copper open interest holds near record highs
  • Strong China nickel imports seen for March - Jefferies
  • Coming Up: Euro zone Markit mfg PMI flash Mar at 0900 GMT

 (Reuters) - London copper hit the highest in more than two months on Tuesday, as a weaker dollar fuelled chart-based buying, before giving back most of its gains after a weak reading on factory health in top consumer China.

Activity in China's factory sector dipped to an 11-month low in March as new orders shrank, a private survey showed, signalling persistent weakness that will likely add to calls for more policy easing.

"People are still questioning the strength in demand. But if I was a Chinese consumer, I would be trying to stockpile as much as possible at these low price levels because they are only going higher given the dollar," said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.

Three-month copper on the London Metal Exchange jumped to $6,203.50, the loftiest since Jan. 5, before easing to $6,139 a tonne by 0230 GMT, up 0.3 percent.

A break above $6,300 may trigger some panic-buying by consumers, said a broker in Hong Kong.

Also of note, LME open interest remained near record highs, reached last week.

The most-traded June copper contract on the Shanghai Futures Exchange also struck its highest since early January before easing to 43,900 yuan ($7,074) a tonne, still up 1.4 percent.

Uncertainty over the U.S. economy is also persisting. The Federal Reserve is "widely expected" to begin raising interest rates this year though the policy path remains uncertain, the central bank's second-in-command said, while data showed U.S. home resales rebounded modestly in February.

Meanwhile, the dollar dipped against the euro and yen on Tuesday, succumbing to downward pressure from lower U.S. debt yields.

Demand for nickel pig iron (NPI) in China has not picked up as strongly as expected after the Lunar New Year holidays, Chinese industry sources said, while China's refined nickel imports jumped by a third in January to more than 10,000 tonnes.

"Metals trade data has been symptomatic of the softness in manufacturing activity, with consumers keeping purchases to a minimum due to uncertainty over future demand," said Jefferies.

It expects imports to continue in March, given weaker LME prices and the Chinese market having tightened due to NPI production cuts due to low prices and environmental clampdowns.

Report by SHMET
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