Base Metals

A weak end to the year in store: Copper - Market Analysis

Tue, 10 Nov 2009 00:00:00 GMT

We remain wary of a pullback in copper prices in the short term, but maintain our bullish medium to longer term view.

Attempts to rally now lacking conviction: Market Summary

Tue, 10 Nov 2009 00:00:00 GMT

The base metals are struggling to make headway on the upside, as stocks are generally rising and all-important Chinese demand is soft. The complex looks like it will end the year sideways to lower.

Consolidation mode: Zinc- Market Analysis

Tue, 10 Nov 2009 00:00:00 GMT

It has been a quiet week for zinc and the focus is on stock flows on the LME and SHFE which are providing an indication of the current level of tightness in the physical market.

Demand Indicators November 10 2009

Tue, 10 Nov 2009 00:00:00 GMT

Demand indicators for the base metals market

Dominant long cutting back as demand improves: Tin - Market Analysis

Tue, 10 Nov 2009 00:00:00 GMT

The main focus of the tin market has returned to the actions of the hedge fund which has been squeezing availability this year. It now appears, however, that it is finally unwinding its dominant long position.

Price forecasts raised: Aluminium - Market Analysis

Tue, 10 Nov 2009 00:00:00 GMT

The LME-week consensus price forecast for Q4 of $1,700/tonne for the 3-month price is failing to materialise. Due to both fund activity and the existence of a fundamental floor based on smelter costs, prices have so far averaged $1,915/tonne for the quarter. As such, MBR is revising its Q4 3-month forecast upwards to $1,842/tonne and assuming a $40 cash to 3-month contango.

Seasonal demand improving: Lead - Market Analysis

Tue, 10 Nov 2009 00:00:00 GMT

The lead market seems to be tightening up in Europe and North America, but is weak in China.

Sideways trading: Technical analysis

Tue, 10 Nov 2009 00:00:00 GMT

Prices are largely stuck in sideways trading ranges, looking for direction, but the technical indicators are inconclusive at the moment.

Vale Inco strikes remain supportive: Nickel - Market Analysis

Tue, 10 Nov 2009 00:00:00 GMT

Nickel prices are largely able to shrug off continuing stock rises on the LME as technical signals, dollar weakness and the strike at Vale Inco in Canada offer support.

$2,000/tonne beyond reach : Aluminium - Market Analysis

Tue, 03 Nov 2009 00:00:00 GMT

After another rally attempt fizzled towards the end of last week, 3-month aluminium descended to $1,900/tonne. This is approximately where it had been prior to US dollar driven rally that saw it peak at just above $2,000/tonne last week.

Breakouts hit resistance: Technical analysis

Tue, 03 Nov 2009 00:00:00 GMT

For most base metals recent rallies faltered last week as they ran into overhead resistance. They are now pulling back to test underlying support.

Demand Indicators November 03 2009

Tue, 03 Nov 2009 00:00:00 GMT

Demand indicators for the base metals market

Perhaps not as tight as it seems: Zinc- Market Analysis

Tue, 03 Nov 2009 00:00:00 GMT

Stock trends – and the implication of these – are the main focus of our zinc market analysis this week after SHFE stocks soared to an unprecedented high.

Seasonal demand signals not encouraging: Lead - Market Analysis

Tue, 03 Nov 2009 00:00:00 GMT

As we approach the high demand North Hemisphere winter replacement auto battery season, demand for lead seems ominously subdued.

Short term price direction uncertain: Market Summary

Tue, 03 Nov 2009 00:00:00 GMT

After a failed break higher last week, the base metals have move lower to retest their breakout levels and now seem uncertain about which way to turn in the short term.

Still cautiously bullish: Copper - Market Analysis

Tue, 03 Nov 2009 00:00:00 GMT

Sentiment and prices were very volatile last week, but overall we think sentiment remains positive, and copper prices should continue to reflect this. Our Q4 2009 price forecasts may be in line for another upgrade.

Supply disruptions continuing: Tin - Market Analysis

Tue, 03 Nov 2009 00:00:00 GMT

Disruptions to supply in Indonesia remain an important focus of the tin market. They are continuing, which should remain supportive to prices. It is also interesting to note that the backwardation is starting to ease. But is this the start of the spreads realigning with the fundamentals or games by the dominant position holder?

US market getting tighter: Nickel - Market Analysis

Tue, 03 Nov 2009 00:00:00 GMT

The nickel market is starting to see clearer regional variations, with the greatest tightness being in North America. Asia is starting to look well supplied now and Europe has a glut of material still arriving from Norilsk and now we are starting to hear that some stainless mills are planning cutbacks.

Fundamentals are still the main drivers of LME prices

Mon, 02 Nov 2009 00:00:00 GMT

With very little variations in the fundamental picture for most LME metals, recent price strength has been attributed to external factors, including weakness in the US dollar, performance of equity, other commodities, and more importantly, funds’ activity. Although all these factors have definitely played a role in determining prices on the LME lately, does this means that fundamentals are not longer an important factor for price formation?

Breakouts are stalling: Technical analysis

Tue, 27 Oct 2009 00:00:00 GMT

More metals have followed zinc and broken higher. However, the breakouts are struggling and stalling. Consolidation may be required if the rallies are to continue

Chinese output resilient to clampdown: Lead - Market Analysis

Tue, 27 Oct 2009 00:00:00 GMT

It seems that we were tight to be cautious about the effectiveness of the Chinese government’s pollution crackdown to significantly rein in domestic refined lead production.

Demand Indicators October 27 2009

Tue, 27 Oct 2009 00:00:00 GMT

Demand indicators for the base metals market

Dollar and oil help price break higher : Aluminium - Market Analysis

Tue, 27 Oct 2009 00:00:00 GMT

After a false rally on Tuesday, the LME three-month aluminium price saw one of its biggest surges in recent months to gain $82/tonne in a day on Thursday to $1,984/tonne. Prices subsequently pushed above $2,000/tonne, but whether they can stay depends on the direction of oil and the US dollar.

Latest rallies look vulnerable on dollar fluctuations: Market Summary

Tue, 27 Oct 2009 00:00:00 GMT

Although we have seen some prices breaking higher recently, we would be surprised if they can be sustained if the dollar does not resume a downtrend. Separately, we have raised some price forecasts this week.

Problems at Spence and Olympic Dam support the rally: Copper - Market Analysis

Tue, 27 Oct 2009 00:00:00 GMT

The confirmation of output losses from Olympic Dam was one of many bullish factors last week.

Short-covering boosts prices: Tin - Market Analysis

Tue, 27 Oct 2009 00:00:00 GMT

The main focus of our tin analysis this week is on supply developments in Indonesia and China.

The market is in deficit : Nickel - Market Analysis

Tue, 27 Oct 2009 00:00:00 GMT

With little change in the underlying market trends and data this week - LME stocks continue to edge higher, the spreads remain within recent ranges, and prices have moved in line with expectations - we focus on the implications of some supply-side news that has emerged regarding the Avebury and Goro mines this week.

Time to consolidate recent gains: Zinc- Market Analysis

Tue, 27 Oct 2009 00:00:00 GMT

Zinc prices continued to rally last week, and are now challenging the $2,400/tonne level. In this week’s analysis we assess whether there is any fundamental support behind the higher prices.

Anglo American dumps zinc

Fri, 23 Oct 2009 00:00:00 GMT

Anglo American’s recently-announced restructuring will result in its zinc business being cast aside. This raises two obvious questions. First, does this move reflect a bearish industry view on the outlook for the zinc market in general? And second, which companies are likely to be the front runners to snap up Anglo’s zinc assets?

Demand Indicators October 20 2009

Tue, 20 Oct 2009 00:00:00 GMT

Demand indicators for the base metals market

Dollar dictating direction: Copper - Market Analysis

Tue, 20 Oct 2009 00:00:00 GMT

It was another busy week for copper, with a strike in Chile, bullish Chinese trade data, a weak dollar, and an upbeat LME week generally helping prices move higher.

New longs keep coming: Zinc- Market Analysis

Tue, 20 Oct 2009 00:00:00 GMT

Zinc’s bullish run continues, apparently driven by both physical and investor demand.

New twist in China’s poisoning crisis: Lead - Market Analysis

Tue, 20 Oct 2009 00:00:00 GMT

China’s lead pollution crisis continues to make headlines. And although we do not see it as a reason to get bullish on lead prices, we think some traders and speculators are using it as an excuse to buy.

Resistance being tested: Technical analysis

Tue, 20 Oct 2009 00:00:00 GMT

Having tested lower and found support, many of the base metals are now testing higher. Zinc has already broken out and others look poised to follow

Support from a weak dollar and strong oil: Aluminium - Market Analysis

Tue, 20 Oct 2009 00:00:00 GMT

Over the last week strong oil prices and a weak dollar have been supporting aluminium spot and forward prices in an inactive market. Indeed, there has been little trading activity as shown by thin volumes and low volatility. The uptick in open interest is most likely down to the creation of both short and long positions as there was uncertainty on market direction, this morning’s jump suggests the longs took the lead, but prices may still fall as ringside trading has been thin.

Time for another break higher?: Market Summary

Tue, 20 Oct 2009 00:00:00 GMT

Post-LME Week, many of the base metals seem to be gearing up for another break higher. Although a weaker dollar and supply concerns are supportively bullish, stocks are rising and demand is weak, so we have doubts about whether higher prices are justified yet.

Upward momentum maintained: Nickel - Market Analysis

Tue, 20 Oct 2009 00:00:00 GMT

Nickel prices continue to rally, even though stocks are still rising too. As we note in this week’s analysis, however, we think demand is stronger than it may appear.

Worst of Indonesian disruptions passed:Tin - Market Analysis

Tue, 20 Oct 2009 00:00:00 GMT

The large backwardation and dominant warrant holder remain in place in the tin market. Prices are still consolidating and the well-established uptrend in LME stocks continues. However, supply from Indonesia now seems to be getting back to normal.

Century suspended as prices jump:Zinc- Market Analysis

Tue, 13 Oct 2009 00:00:00 GMT

LME zinc price broke out to new highs last week above $2,000/tonne as stops were triggered during a technical rally. The temporary suspension of Century is not justification for move in prices.

Demand Indicators October 13 2009

Tue, 13 Oct 2009 00:00:00 GMT

Demand indicators for the base metals market

Dip buyers return as suspected: Market Summary

Tue, 13 Oct 2009 00:00:00 GMT

Short-term price trends were looking bearish in the base metals up until the middle of last week, when a softer dollar triggered some rebounds. Whether the base metals can hold onto this strength remains to be seen.

Glencore-Credit Suisse ETF could lock up metal: Aluminium - Market Analysis

Tue, 13 Oct 2009 00:00:00 GMT

The surprise announcement by Alcoa that it had returned to profitability in Q3 helped the price move upwards, but most of the strength came from continued dollar weakness.

Rallying again: Technical analysis

Tue, 13 Oct 2009 00:00:00 GMT

There were some rallies among the base metals last week, with nickel the biggest gainer and zinc running up to new highs for the year. However, the rallies look vulnerable.

Still rangebound:Tin - Market Analysis

Tue, 13 Oct 2009 00:00:00 GMT

This week in our tin market analysis we review recent trends in LME open interest and trading volumes, both of which have been in decline lately.

Stock rise slowing: Lead - Market Analysis

Tue, 13 Oct 2009 00:00:00 GMT

With smelter closures continuing in China, the dollar weaker and the LME stock rise slowing, LME lead prices are looking well supported.

Supply disruptions turning sentiment bullish again: Copper - Market Analysis

Tue, 13 Oct 2009 00:00:00 GMT

The copper market has been full of news this week, with production problems at a number of operations – not least Olympic Dam – making headlines, a flood of analysts forecasts coming out in time for LME Week, and labour contract negotiations in Chile starting to hot up.

Top performer last week: Nickel - Market Analysis

Tue, 13 Oct 2009 00:00:00 GMT

In this week’s nickel analysis we focus on views from the INSG and others regarding the outlook for this market in the coming year.