Research

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

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Base Metals

30 April 2019 Issue

  • Metal price weakness attracts dip-buying

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    08 May 2019

    With US-China trade talks appearing to have soured, it is somewhat surprising that the metals markets are not weaker. But, confirmation that Chinese vice premier Liu He’s trip to Washington on Thursday May 9 is to go ahead, suggests there may still be a chance of a trade deal and that seems to be encouraging some dip-buying in the metals

  • Aluminium: Oversold

    30 April 2019

    With speculative positioning remaining heavily net short, the main risk to LME aluminium prices in the near term is to the upside. And we believe that uptrend momentum is likely to continue in the near term for SHFE prices due to falling stocks in China and improving demand there. But we are still more cautious towards the price outlook over the medium to long term.

  • Base metals investment analysis: Impending good macro news not yet priced in

    30 April 2019

    Speculative positioning across the base metals is largely neutral or net short. This tells us that recent improvements in macro data and progress in US-China trade talks are not already priced in. Such a wait-and-see strategy means there is room for length to be added – and for prices to rally – when the good news comes.

  • Copper: Dialling back our short-term bullishness

    30 April 2019

    Despite an improvement in economic growth momentum, especially in China, the current fundamentals of the copper market have remained somewhat weak, evidence by stock builds and soft premiums. This is in notable contrast with the solid rebound in prices in Q1. There is a risk therefore of more profit-taking in near term until the fundamental picture tightens again later this year.

  • Demand Indicators: April 29 2019

    30 April 2019

    Demand indicators for the base metals market

  • Downloadable Base Metals Weekly Data April 29 2019

    30 April 2019

    Downloadable data for week April 29 2019

  • Lead: Prices have run into dip buying

    30 April 2019

    The weakness in LME lead prices since early March looks more justified now that the ILZSG reports the lead market as having swung back to balance, from a supply deficit previously. That said, there are some oddities in the data that are likely to be revised, and may ultimately tell a different story. Prices have once again found support at the level they found it in Q4 last year. We expect more range trading, with the risk now lying to the upside.

  • Market Summary: Price weakness contained for now

    30 April 2019

    Base metal prices have been slipping in recent weeks. Given that the whole group is suffering, the drivers are likely to be broad and macro-related rather than metal-specific. Since speculative positioning is neutral and recent price weakness has not irreversibly damaged the technical picture, the complex could turn higher again on the back of dollar weakness, further improvements in macro data, or news of a US-China trade deal.

  • Nickel: Fundamentals looking less bullish

    30 April 2019

    There are some less-than-bullish signs starting to emerge in the nickel market that may be contributing to the pressure on prices lately. Demand looks weaker and supply stronger, although at the moment the market continues to run a deficit, albeit more modest in size than at the same time last year. These fundamental themes are not unexpected, however, and are already factored into our forecasts. Our Q2 base case is $13,300 per tonne, which is not asking much considering where prices have been in March and April. We remain more bullish for Q3 and Q4.

  • Technical analysis: Mostly consolidation

    30 April 2019

    The main theme of our technical analysis at the moment is consolidation. Some metals such as aluminium and lead even look oversold and may have more room on the upside in the short term.

  • Tin: Worse before it gets better

    30 April 2019

    Tin prices have finally come under heavy pressure since the start of April after being extremely resilient in March despite the announcement of the end of a suspension of key smelter inspector PT Surveyor Indonesia. While we believe that the recent acceleration in the sell-off is temporary, we think that it was triggered by weak demand rather than strong supply. Further, we think that downward pressure will continue in the weeks ahead because tin’s speculative positioning is still inflated.

  • Zinc: Price is base-building

    30 April 2019

    A wide backwardation has prompted LME stock inflows, which in turn have dampened outright prices. China remains tight, however with stocks there low and still falling. It is likely that this market will need the units recently delivered to the LME. For the moment, zinc seems to be consolidating comfortably around $2,750 per tonne.