Research

Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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Base Metals

19 March 2019 Issue

  • Mixed start to trading today while metals await further direction

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    26 March 2019

    Base metals had a mixed start to trading on Tuesday March 26. But that is an improvement on recent weaker trends, as risk sentiment across global financial markets appears to have picked up somewhat.

  • Metals prices start week poorly amid risk-off sentiment

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    25 March 2019

    LME base metal prices ran into follow-through selling on the morning of Monday March 25 after weak economic data points released at the end of last week continued to undermine the demand outlook.

  • Dollar rebound pressures metals prices

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    22 March 2019

    With LME base metals prices having come off their weekly highs, most have remained under selling pressure this morning, Friday March 22nd, compounded by a stronger US dollar. Overall, however, the base metals complex remains in consolidation mode.

  • Aluminium prices edge up further this morning, others tread water anticipating direction

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    20 March 2019

    Aluminium was the strongest LME metal this morning, setting fresh highs for the year. The others are generally consolidating. Overall, the complex seems to be waiting for fresh direction from US-China trade talks and for the most part are well placed to extend this year’s rallies. But that could mean they are also setting themselves up for a fall, should disappointing news emerge.

  • Aluminium: Time to play catch-up

    19 March 2019

    Aluminium has been the laggard of the base metals complex this year, but we wonder whether the risks are shifting to the upside. It has some catching up to do relative to its peers. We would look more to the technical picture than aluminium’s fundamentals to trigger that correction, with fund short-covering being the driver given how this market is unique in still carrying a net speculative short position. So there is potential for upside surprises for aluminium prices in the short term.

  • Base metals investment analysis: Funds favouring bets on spreads rather than outright prices

    19 March 2019

    Base metal fund strategies are shifting due to diminishing volatility in copper’s outright price, and better visibility over market fundamentals ahead of an unpredictable macroeconomic environment.

  • Copper: Weak demand-side fundamentals

    19 March 2019

    Copper prices have consolidated somewhat since late February, with LME stock inflows and rewarrantings in the past week dampening further upside potential for the moment. While we see further consolidation into the month-end, we believe that a new uptrend will emerge in Q2 on the back of stronger copper demand from China. In this week’s analysis, we highlight the main takeaways from Fastmarkets’ International Copper Conference in Amsterdam, which we attended last week.

  • Demand Indicators: March 19 2019

    19 March 2019

    Demand indicators for the base metals market

  • Downloadable Base Metals Weekly Data March 19 2019

    19 March 2019

    Downloadable data for week March 19 2019

  • Lead: Looking the weakest of the LME metals

    19 March 2019

    After reaching a seven month high at $2,179.50 per tonne on February 28, lead prices now around $2,030 per tonne look set to test technical support from the mid-February low at $2,011 per tonne. The main change last week was the re-warranting of cancelled warrants, which sent the signal to the market that LME lead stocks are not about to accelerate lower anytime soon.

  • Market Summary: Waiting for brighter demand signals

    19 March 2019

    Base metals have generally had a strong run so far this year, on optimism about an improving macro outlook, and on low stocks and supply disruptions. However, this month the price recoveries are pausing, which is understandable given that current demand conditions remain subdued. We remain quite neutral on the complex at the moment until demand indicators start to improve.

  • Nickel: Remaining bullish

    19 March 2019

    Supported by steady LME stock outflows, nickel prices remain robust and may be completing a second ‘higher-low’ in the uptrend off the early-January bottom. The technical indicators should confirm this in the coming days. On the fundamentals, we have raised our Q1 Chinese production forecast, which, all other things being equal, has reduced the global annual deficit for 2019 by 21,000 tonnes to 63,000 tonnes.

  • Technical analysis: Mostly consolidation

    19 March 2019

    From a technical perspective, base metal prices remain in consolidation mode, though nickel and potentially aluminium look best placed to break out of those holding patterns to the upside.

  • Tin: All about Indonesia

    19 March 2019

    Tin has weakened the most among the base metals complex since the start of March, which is primarily because of the recent developments in Indonesia that are set to ease supply tightness in the next month or so. Our analysis suggests that the downside potential for tin prices is great over the next two months, yet, represents a buying opportunity because the long-term fundamental picture remains tight.

  • Zinc: Supply/demand revisions raise 2019 deficit

    19 March 2019

    We have cut our outlook for Chinese refined zinc output in H1 as a result of the sharp drop in production in January-February. At the same time, the continued rise in SHFE stocks suggest demand has underwhelmed, and our H1 consumption forecast has been downgraded also. Nevertheless the net effect will be to delay the expected fundamental rebalancing, increasing our expectations for the full-year deficit in 2019 to 206,000 tonnes from ~150,000 tonnes previously.