Research

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

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Base Metals

6 August 2019 Issue

  • Deteriorating geopolitical-economic backdrop boosts gold to new multi-year high; base metals consolidate

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    13 August 2019

    The economic and geopolitical clouds are getting more widespread and darker with unrest in Hong Kong and debt default concerns in Argentina adding to market concerns about the continuing US-China trade dispute, poor global economic data, stalemate over Iran and the potential for a hard Brexit. Gold has pushed up to another fresh multi-year high on Tuesday August 13, but somewhat ironically the base metals are higher too, even though equity markets were under pressure on Monday and have been weaker in Asia this morning.

  • Metals mixed as cross currents hit sentiment

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    12 August 2019

    Under the cloud of the continuing US-China trade dispute, which has no end in sight and is weighing on global economic activity, market sentiment remains subdued overall and prices had a mixed start to the new week this morning, August 12.

  • Relief rally underway prompted by better-than-expected Chinese trade data, but markets still face many headwinds

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    08 August 2019

    A 3.3% year-on-year rise in China’s exports in US dollar terms, which was above expectations, has provide some relief to markets, with Asian equities, base metals and precious metals up across the board.

  • No stopping gold while investors take safety in havens; copper ignores cutback news

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    07 August 2019

    LME base metals prices were for the most part weaker on Wednesday morning, August 7, with even copper lower despite new of Glencore's production cut for 2020. The gold price reached a fresh high of $1,491.30 per oz.

  • Aluminium: New lows more likely now

    06 August 2019

    LME aluminium's challenging demand outlook amid the prospect of rising primary supply continues to favor sellers. Its deteriorating micro-dynamics are discouraging dip-buying activity too, with more metal returning to global exchange sheds while speculative fund positioning remains net bearish. As such, a new 2019 low for LME aluminium prices in the coming weeks would perhaps be unsurprising.

  • Base metals investment analysis: Speculative short-selling has dominated the base metals

    06 August 2019

    The latest COT reports from the CFTC and LME show that speculative short-selling has become the dominant force in the base metals in the past week.

  • Copper: Unlikely to be sub-$6,000 for long

    06 August 2019

    Copper seems to have borne the brunt of the disappointed selling that was triggered by dollar strength and another breakdown in US-China trade relations last week. Long liquidation plunged copper prices to $5,640 per tonne as of August 5, their lowest point since June 2017 and down 4% on the month already. Since we believe that the market is already pricing in a sharply negative macro backdrop, the room for additional selling pressure looks limited from here, especially given copper’s supply constraints and our expectations of a pick-up in Chinese grid spending in H2.

  • Demand Indicators: August 6 2019

    06 August 2019

    Demand indicators for the base metals market

  • Downloadable Base Metals Weekly Data August 6 2019

    06 August 2019

    Downloadable data for week August 6 2019

  • Lead: Timeout after stock rise surprise

    06 August 2019

    Last week was not a bullish one for the base metals given the fresh deterioration in key macro themes. But for lead, these negatives were compounded by the delivery of 31,925 tonnes into LME-registered warehouses within a four day period. This lifted stocks by 54% during the week and significantly dampened sentiment. On the charts though, the uptrend in prices since May has not been damaged by the sell-off, so we can see prices consolidating and recovering again, though gains will be capped until macro data improves.

  • Market Summary: Low case price forecast scenarios coming into view

    06 August 2019

    A few weeks ago we thought the lows for base metal prices were in place, but the disappointment the market suffered last week from the Fed and from the deterioration in US-China trade talks again suggests prices may remain under pressure for longer. The fresh downshift is putting our low-case price forecasts for Q3 into play.

  • Nickel: Out on its own, for now

    06 August 2019

    Despite weakness elsewhere in the base metals complex, nickel prices have begun this week strongly, still benefitting from multiple supply disruption concerns and by technical momentum after July’s rally. But nickel’s independent strength is unlikely to last if the rest of the complex remains depressed by pessimism over the macro outlook.

  • Technical analysis: Except nickel, many base metals getting oversold

    06 August 2019

    Apart from nickel, base metals prices have been looking technically weaker with many probing new lows for the year. However, some, like zinc and tin, are looking oversold and could follow copper and lead in attempting to rebound next.

  • Tin: Still in a downward spiral

    06 August 2019

    While tin prices have fallen further and are at their lowest since June 2016, we believe that selling pressure is nearly exhausted. Increased technology tensions have led tin prices to underperform meaningfully the broader base metals complex this year, although we think that the low of the year will be reached sooner rather than later. While we remain cautious in August due to extremely negative price momentum and low seasonal demand, we expect a solid rebound from next month. But we have replaced our Q3 base case forecast with our previous low case.

  • Zinc: Bears back in charge

    06 August 2019

    Zinc prices have come under fresh pressure, extending to their lowest since mid-September last year and the current chart set-up suggests bearish sentiment is likely to dominate in the short term. The quarter-to-date average of $2,436 per tonne is starting to fall short of our base case forecast of $2,500 per tonne.