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21. August 2014

ASIA METALS – Metal prices mixed, rise in political tensions dampen market sentiments

Base metals prices traded mixed in early Asian sessions on Monday, with risk rising from political tensions between Ukraine and Russia casting a cloud over investor sentiments.

Overall, investor sentiments seem to be less favourable for the commodities sector, with a string of lacklustre macro data from last week weighing.

“Taking stock of the week as a whole, however, we think global macro readings (ex-US) have clearly shifted to the negative side, particularly out of China and Europe and this will likely pressure the commodity group further heading into [this] week,” commented analyst Edward Meir from INTL FCStone.

Metals sensitive data will be out later in the week, leading by the HSBC Flash manufacturing PMI scheduled to be out Thursday morning, with manufacturing indices from the various major economies in US and Europe out later that day.

Wall Street ended mixed on Friday, with the three major US stock indexes closing mixed after news reports said that separatists shot down a Ukrainian government fighter plane after army troops entered deep inside a rebel-controlled city of Luhansk.  In Asia, stockls have opened mixed, with Hang Seng is down 0.56 percent and Nikkei 225 up 0.8 percent.

In the metals, copper has been stuck in a sideways pattern and prices are now up $16 at $6,886 per tonne from Friday’s close of $6,870.  Stock movements on Friday were routine, with 50-tonne drawdowns in both stocks and cancelled warrants to 141,300 tonnes and 21,925 tonnes respectively.

Data from China’s National Bureau of Statistics out last week showed that July output for copper reached 634,000 tonnes, up 19 percent from a year ago and just short of the record high of last October.

“However, since July saw only a moderate build-up of copper inventories in the SHFE warehouses, our conclusion is that demand in China is robust”, said analysts at Commerzbank.

Also, this Wednesday will see the August date will become prompt, so we can expect attention on spread activity. Benchmark cash/threes was $21 backwardation on Friday.

Aluminium at $2,002.25 is just $2.25 higher than Friday’s $2,000. Stocks on Friday fell a net 7,050 tonnes to 4,892,775 tonnes but cancelled warrants slumped 49,450 tonnes to 2,777,200 tonnes due to declines in Vlissingen.

Zinc gained $6 to $2,278, but lead at $2,212 is $2 lower.

Nickel rose just $5 over the weekend to $18,675, with stocks continuing to rise to a fresh record high of 322,728 tonnes, Still the metal has found support from talk that the Indonesian export ban will remain in place.  Tin fell $44 today to the current $22,406 from Friday’s kerb close of $22,450 per tonne.


Source: fastmarkets.com

 

 

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