Base Metals

Demand Indicators May 21 2013

Tue, 21 May 2013 00:00:00 GMT

Demand indicators for the base metals market

Disruptions and Chinese demand supportive: Copper - Market Analysis

Tue, 21 May 2013 00:00:00 GMT

Range-trading could be the order of the day in copper for a while longer too, but in a relatively more buoyant band between $7,000/tonne and $7,700/tonne, as supply disruptions and Chinese demand signals continue to be supportive factors, both to prices and spot premiums.

Downloadable Base Metals Weekly Data May 21 2013

Tue, 21 May 2013 00:00:00 GMT

Downloadable data for week May 21 2013

Nearby tightness returns: Lead - Market Analysis

Tue, 21 May 2013 00:00:00 GMT

Prices are well supported and scrap tightness may well give the bulls the upper hand. Nearby tightness has re-emerged, which is damaging financing returns.

Prices look the strongest of all the metals: Tin - Market Analysis

Tue, 21 May 2013 00:00:00 GMT

Although demand is fairly poor, the supply side is struggling, which is keeping availability in check. We remain bullish for tin overall, especially as inverse head-and-shoulders formation has been triggered which should attract technical buyers in the short term.

Rallies are selling opportunities: Nickel - Market Analysis

Tue, 21 May 2013 00:00:00 GMT

The market continues to find underlying support below $15,000/tonne, for now. The fundamentals are weak, but with prices down here we believe that NPI production cutbacks are going on under the radar. Attempts to rally are likely to be sold into.

Room for further gains in the short term: Technical analysis

Tue, 21 May 2013 00:00:00 GMT

Range-trading has been common across the complex, with last week seeing bottoms tested. Prices are rising again and we would look for tests of the top of the ranges now.

Short covering and long liquidation: Base metals investment analysis

Tue, 21 May 2013 00:00:00 GMT

Speculative longs and shorts are being closed out, indicative of a general, indiscriminate exodus, which we have seen across many commodities this year, as managed money looks for safer returns in other asset classes.

Tighter, apparently: Zinc - Market Analysis

Tue, 21 May 2013 00:00:00 GMT

Latest supply-demand data suggests a tighter global market balance than we have been used to, but we sense that this is partly an illusion created by off-market stock financing. Nevertheless, prices are holding up relatively well. Expect range-trading to continue as a base is built, following the pattern seen last summer.

We don’t expect much more than range-trading: Aluminium - Market anlaysis

Tue, 21 May 2013 00:00:00 GMT

Prices remain under pressure, but generally trading seems lacklustre, with the stronger dollar weighing on prices and production cuts to date insufficient to make any real difference. We wait to see of the effervescence in the equity markets flows into industrial metals. Otherwise, aluminium prices seem range-bound between about $1,800/tonne and $1,950/tonne in the short term.

Well placed to try higher again: Market Summary

Tue, 21 May 2013 00:00:00 GMT

Considering the strength of the US dollar and the weakness in gold prices, the base metals are now holding up well, which lends support to the view that a floor has finally be found. We expect price to rise from here, but they may take a rather choppy path and not make too much progress overall until after the summer.

April saw record outflows from commodity ETPs: Base metals investment analysis

Tue, 14 May 2013 00:00:00 GMT

There has been a rotation out of commodities since the start of the year in favour of safer, higher-yielding equities and bonds, a trend which accelerated in April led by the sell-off in gold.

Base-building under way: Lead - Market Analysis

Tue, 14 May 2013 00:00:00 GMT

Given that this is a seasonally quiet period for lead demand, we do not expect much on the upside in the short term, though the LME stock fall is supportive to sentiment and the health of the Chinese market seems to be improving, as evidenced by falling SHFE stocks. We would look for further range trading in the $1,980-2,100/tonne zone now.

Demand Indicators May 14 2013

Tue, 14 May 2013 00:00:00 GMT

Demand indicators for the base metals market

Downloadable Base Metals Weekly Data May 14 2013

Tue, 14 May 2013 00:00:00 GMT

Downloadable data for week May 14 2013

Gradual price recovery expected, but from a low base: Zinc - Market Analysis

Tue, 14 May 2013 00:00:00 GMT

Our best performance in MB’s Apex price forecast surveys for Q1 2013 was in zinc, where we were ranked third out of 21 forecasters. Although the fundamentals remain weak, prices are widely expected to continue a gradual recovery. We are more bearish than consensus for prices in Q2, which seems prudent so far.

NPI cutbacks growing: Nickel - Market Analysis

Tue, 14 May 2013 00:00:00 GMT

NPI production losses are mounting, but not enough to make a big difference yet. The LME stock build has flattened out as well, but we have seen this sort of pause before and are not reading anything into it yet. Although there may be more in the way of short covering rallies in the near term, the substantial excesses in capacity and inventory cannot fail to dampen any attempted improvements in prices or sentiment.

Price behavior mirrors summer 2012: Aluminium - Market anlaysis

Tue, 14 May 2013 00:00:00 GMT

The market saw some short-covering last week, but there was a lack of follow-through buying. Furthermore, it would appear that there was sufficient overhead selling to turn prices lower once the short-covering had run its course.

Prices are bottoming out: Market Summary

Tue, 14 May 2013 00:00:00 GMT

Short covering and bargain hunting are becoming more prominent, but sentiment is still no better than cautious.

Prices to zigzag higher: Copper - Market Analysis

Tue, 14 May 2013 00:00:00 GMT

Prices held on to their gains as the market starts to sit up and notice the numerous positive demand signals coming out of China now. There is still a major overhang of short positions in copper and more short covering will lead to higher prices. We believe that if speculative positioning were to return from net short to neutral, prices would be in the high $7,900s.

Supply side continues to struggle: Tin - Market Analysis

Tue, 14 May 2013 00:00:00 GMT

As expected, the price dips in tin continue to attract buying. With supply struggling, we remain bullish on tin and expect a strong performance when demand improves.

The recovery is trying to get started: Technical analysis

Tue, 14 May 2013 00:00:00 GMT

The technical indicators have largely turned upwards and some markets are now putting in higher highs and higher lows.

Scorecard for our Q1 2013 base metal price forecasts

Mon, 13 May 2013 00:00:00 GMT

MBR maintained its strong track record in MB’s Apex surveys of analyst price predictions, featuring in the top five leaderboards for Q1 2013 in aluminium, nickel tin and zinc.

An equilibrium of sorts has been found: Zinc - Market Analysis

Wed, 08 May 2013 00:00:00 GMT

Prices are holding up well considering the fundamentals. Expect range trading either side of the $1,900/tonne area.

Another rebound is underway: Market Summary

Wed, 08 May 2013 00:00:00 GMT

The base metals have become quite erratic and at a potential extreme in prices, this often signals a turning point. There is room for further gains in the short term, but we expect more of a sideways-to-higher grind over the summer.

Demand Indicators May 8 2013

Wed, 08 May 2013 00:00:00 GMT

Demand indicators for the base metals market

Downloadable Base Metals Weekly Data May 8 2013

Wed, 08 May 2013 00:00:00 GMT

Downloadable data for week May 8 2013

Downside still seen limited: Tin - Market Analysis

Wed, 08 May 2013 00:00:00 GMT

Prices extended lower below $20,000/tonne, but did not hold down for long. We remain bullish for tin overall and expect dips to continue to attract buying.

Expect consolidation around $1,850-1,980/tonne: Aluminium - Market anlaysis

Wed, 08 May 2013 00:00:00 GMT

Prices tested support and, although it was breached, there was an aggressive bounce off the lows, which suggests good underlying buying interest. More noise of production cutbacks may help to underpin prices.

Further weakness cannot be ruled out: Lead - Market Analysis

Wed, 08 May 2013 00:00:00 GMT

The sell-off to fresh multi-month lows attracted good buying and another rebound is underway. Scrap shortages persist, but a recovery in prices might start to alleviate that.

More production cuts needed: Nickel - Market Analysis

Wed, 08 May 2013 00:00:00 GMT

The dip below $15,000/tonne was short lived, but that is not surprising as it is deep into the NPI cost curve. We feel prices will return to trade either side of the $16,000/tonne level.

More supply cutbacks help to offset demand disappointment: Copper - Market Analysis

Wed, 08 May 2013 00:00:00 GMT

An extra strong rebound on Friday after another heavy sell-off mid-week suggests that there was a lot of short-covering being done. The market is still very short, so more covering is possible, but in the current environment we believe that rallies will be seen as fresh selling opportunities. Overall, the theme in the near term should be consolidation, though the trading range is likely to be wide, as we saw in the summer of 2012.

Much more short-covering still to be done: Base metals investment analysis

Wed, 08 May 2013 00:00:00 GMT

Speculative commodity traders have not lost their appetite for shorting copper and the industrial metals in general. While this remains the case – and it may be so until deep into the second half of the year – we should expect any price rallies to be sold into.

Technical indicators have turned higher: Technical analysis

Wed, 08 May 2013 00:00:00 GMT

The sharp rallies late last week turned the technical indicators higher. We would prefer to wait for a pull-back and buy into a rebound.

A swing to less downbeat sentiment could trigger larger short covering rallies: Technical analysis

Tue, 30 Apr 2013 00:00:00 GMT

Short covering on the SHFE and in Comex copper was pretty clear cut last week, but LME open interest on the whole continued to rise, even during the bounce in prices (seen most clearly in copper and aluminium). If short covering was the main driver, we would expect the price rise to be accompanied by falling open interest. Instead, prices and open interest rising in tandem suggests that the addition of new long positions was the dominant trend.

Aluminium prices have now built a base: Aluminium - Market anlaysis

Tue, 30 Apr 2013 00:00:00 GMT

Aluminium prices attempted to break higher, but the move faltered, yet the pull back to test support may well provide another stronger buying opportunity

Copper price got a sharp rebound as short covering took hold: Copper - Market Analysis

Tue, 30 Apr 2013 00:00:00 GMT

Given how short the copper futures market had become across the LME, Comex and SHFE, it was no surprise that we got a sharp rebound in prices as short covering took hold. Intraday prices went from below $6,800/tonne to above $7,200/tonne over the middle part of last week.

Demand Indicators April 30 2013

Tue, 30 Apr 2013 00:00:00 GMT

Demand indicators for the base metals market

Downloadable Base Metals Weekly Data April 30 2013

Tue, 30 Apr 2013 00:00:00 GMT

Downloadable data for week April 30 2013

Lead prices are consolidating in this seasonally quiet time: Lead - Market Analysis

Tue, 30 Apr 2013 00:00:00 GMT

Lead prices have retreated 20% from their January high at $2,499/tonne and have breached support at $2,000/tonne with the recent drop to $1,980/tonne. However in recent weeks, prices have turned sideways and have been within a $1,980-$2,113.25/tonne range.

Metals had become oversold: Market Summary

Tue, 30 Apr 2013 00:00:00 GMT

Modest rebounds in base metals were seen last week, though much of the gains were given back on Friday

Nickel prices up amid a first wave of short covering: Nickel - Market Analysis

Tue, 30 Apr 2013 00:00:00 GMT

The sell-off to $15,075/tonne has taken prices well into the NPI cost curve so we felt support would be found before too long and that seems to be the case. We would look for a return to trade either side of the $16,000/tonne level

Short covering and bargain hunting seen last week: Base metals investment analysis

Tue, 30 Apr 2013 00:00:00 GMT

In general the relentless decline in base metal prices was arrested last week and modest rebounds were seen, though much of the gains were given back on Friday. The futures markets have become exceptionally short and we have been expecting short covering rallies, so the bounce was not a surprise, especially given how technically oversold most markets were.

Tin prices consolidating and looking to move higher next: Tin - Market Analysis

Tue, 30 Apr 2013 00:00:00 GMT

Prices seem to have found support and are now consolidating. We remain bullish for tin overall and expect dips to continue to attract buying

Zinc prices have held up relatively well: Zinc - Market Analysis

Tue, 30 Apr 2013 00:00:00 GMT

Prices are holding up well, the fundamentals are not that strong in our view so we would not expect too much on the upside, but the high level of cancelled warrants may well be providing enough support to underpin the complex

Falling orders for mining equipment – bearish or bullish?

Wed, 24 Apr 2013 00:00:00 GMT

Reduced capital spending by the mining industry has contributed to Caterpillar recording a 45% drop in Q1 earnings. Is this another negative story pointing to the end of the so-called commodities supercycle? Not necessarily.

Balanced market: Lead - Market Analysis

Tue, 23 Apr 2013 00:00:00 GMT

Despite weaker prices and recent changes to LME load out rates, activity on physical lead has been quiet. We believe that the market is finely balance. The apparent resilience in lead pricing is a sign of strength, and our strategy would be to buy this dip, using technical indicators to time our entry.

Demand Indicators April 23 2013

Tue, 23 Apr 2013 00:00:00 GMT

Demand indicators for the base metals market

Downloadable Base Metals Weekly Data April 23 2013

Tue, 23 Apr 2013 00:00:00 GMT

Downloadable data for week April 23 2013

Downside risks are limited: Zinc - Market Analysis

Tue, 23 Apr 2013 00:00:00 GMT

Prices are consolidating relatively well, at least compared to copper.

New financing profitability analysis: Base metals investment analysis

Tue, 23 Apr 2013 00:00:00 GMT

This week we expand and rename our old Funds Focus section to include detailed profitability analysis for stock financing deals on all the base metals. Zinc and aluminium continue to provide the best returns, with lead in third place.

Price forecast downgrades fine-tuned this week: Market Summary

Tue, 23 Apr 2013 00:00:00 GMT

Price weakness persists among the base metals and elsewhere in the commodities complex. However, the metals appear increasingly oversold, especially copper. We continue to look for buying opportunities.

Prices down, but more resilient than most: Aluminium - Market anlaysis

Tue, 23 Apr 2013 00:00:00 GMT

Although aluminium breached support last week, it generally recovered well and avoided following copper deeper into oversold territory. The $1,800/tonne level is seen as being below the marginal cost of production, so we are not surprised support is evident here.

Scale-down buying: Tin - Market Analysis

Tue, 23 Apr 2013 00:00:00 GMT

Recent price dips have ended up attracting buying, but up until now there has not been enough follow-through interest to form a base.

The lower prices go, the higher the short covering rally: Copper - Market Analysis

Tue, 23 Apr 2013 00:00:00 GMT

Prices continued to head lower, but we would be wary of getting too bearish. The market is extremely short now and the risk of short covering rallies is high, especially as Chinese copper-specific demand indicators are perking up. Output of semi-fabricated products, for example, was at a record high in March and up 18.4% year-on-year during Q1.

Waiting for signs of NPI cutbacks: Nickel - Market Analysis

Tue, 23 Apr 2013 00:00:00 GMT

The sell-off has probably triggered a supply response, but since this is likely to be among nickel pig iron producers any cutbacks will not hit the headlines, so will take time to be felt and to be priced in. However, the nickel market is now extremely short and we should not underestimate the power of short covering.

Waiting to ride the short covering rallies: Technical analysis

Tue, 23 Apr 2013 00:00:00 GMT

Although some charts look vulnerable and warn that further price falls cannot be ruled out, in most cases the base metals are extremely oversold now. We would not chase prices lower and instead look for buying opportunities and rise the short-covering rallies when they come.