Research

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

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Base Metals

20 August 2019 Issue

  • China’s attempts to boost domestic demand may provide relief from trade gloom

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    28 August 2019

    With gold prices up at near six-year highs, markets remain nervous on Wednesday August 28 about just how much damage the US-China trade war is doing and whether it will be reversible before it leads to a global recession.

  • Markets mainly rangebound, but tin continues to sink – will weak US manufacturing data change US policy?

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    23 August 2019

    With little changed in the depressed markets, focus will now turn to what ideas central bankers come up with when they meet at the Economic Policy Symposium on Friday August 23. Thursday’s flash PMIs showed US manufacturing moving into contraction for the first time since 2009, while Japan and Europe remained in contraction mode.

  • Markets quiet while they consolidate, wait for pointers from central bankers' symposium at Jackson Hole

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    21 August 2019

    The drone sound from the markets has not changed - no progress on US-China trade talks, continued economic headwinds and various simmering geopolitical concerns. The fact there is more central bank and government talk about monetary easing and the need for stimulus highlights the far from bullish situation the global economy is in and that is reflected in market sentiment.

  • Aluminium: Modest rebound, but hard to be bullish

    20 August 2019

    Given the current macro backdrop and aluminium’s own micro-dynamics, we remain cautiously bearish in the very short-term, even though LME prices have edged back up to the $1,800 per tonne area. This modest rebound may have only succeeded in creating a bear flag formation, and the recent double-bottom and falling exchange stocks may not be enough to prevent prices from breaking down again.

  • Base metals investment analysis: Bearish bias remains

    20 August 2019

    While bearish positioning has become the default for base metal investors and speculators in light of macro, trade and geopolitical headwinds, we argue that copper looks increasingly vulnerable to short-covering.

  • Copper: Likely to stabilize

    20 August 2019

    Copper has rebounded modestly from its August 5 low. While we do not expect much more for the rest of the month due to soft seasonal demand, we continue to see a solid price rebound from September. That said, a weak Chilean peso represents a key downside risk to our constructive copper view.

  • Demand Indicators: August 20 2019

    20 August 2019

    Demand indicators for the base metals market

  • Downloadable Base Metals Weekly Data August 20 2019

    20 August 2019

    Downloadable data for week August 20 2019

  • Lead: Looking fundamentally robust

    20 August 2019

    Thanks to supply concerns, lead and nickel are the two metals shrugging off the overall gloom in the broader markets that saw equities and other industrial commodities remain under pressure last week. Concerns about the global economy, trade, unrest in Hong Kong and debt default in Argentina, are all undermining confidence. But for lead, the extended production outage at Nyrstar’s Port Pirie smelter in Australia seems to be trumping the macro and geopolitical negatives at the moment.

  • Market Summary: Caution prevails

    20 August 2019

    Base metal prices have been undermined by an overall risk-off environment on growing recession fears following the inversion of the US yield curve last week, despite a slight de-escalation of US-China trade tensions.

  • Nickel: Consolidation and correction

    20 August 2019

    Nickel bulls have had plenty to get excited about in recent weeks, particularly on the supply side where disruption concerns have been making so many headlines. But the risk to nickel prices lies to the downside now with LME availability improving for a change and Chinese EV sales dropping in July for the first time in five years.

  • Technical analysis: Mixed technical picture

    20 August 2019

    Nickel is consolidating recent gains, tin and zinc are still in downtrends, while the other base metals are threatening to go higher.

  • Tin: Prices sitting on major support

    20 August 2019

    Tin prices have continued their slide, reaching a new low point since June 2016, and undermined last week by a substantial increase in LME inventories. While LME tin has performed the worst in the year to date among the rest of the base metals complex, we continue to forecast a deficit in the refined market this year, essentially owing to meaningful concentrate supply tightness. As tin prices are sitting on a major zone of support, we expect a solid appreciation from here.

  • Zinc: 2019 price forecast lowered

    20 August 2019

    We still believe that zinc’s price decline is running ahead of the rebalancing of the fundamentals. But given the weak performance of prices so far this quarter and the fact that the window for a rebound is closing, we have cut our Q3 base case price forecast to $2,390 per tonne, from $2,500 per tonne.