Research

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

Change font size:   

Base Metals

6 February 2018 Issue

  • Second day of rebounds underway in the metals

    Free

    13 February 2018

    With a second day of gains getting underway in the base metals and with equities rebounding too, the shake-out from last week may have run its course. That said, further bouts of selling could emerge, so we would expect some choppy trading for a while, especially with the Lunar New Year starting on Thursday and running until February 21.

  • Metals prices rebound - expect choppy trading

    Free

    12 February 2018

    The base metals seem to have found buying interest this morning. All eyes are on whether the global sell-off last week has run its course, and with the Lunar New Year also getting underway this week, trading is likely to remain nervous and choppy.

  • Base metals hit by risk-off mood in Asia

    Free

    09 February 2018

    Base metals are under pressure again this morning after a deterioration in risk sentiment in Asia, evident in equity market losses. The present risk-off environment is unlikely to persist for too long considering that macro data releases continue to show improving global growth momentum. Base metals are likely to enjoy renewed strength after this wave of selling.

  • Aluminium: Consolidation continues for now

    06 February 2018

    Aluminium prices appear comfortable consolidating around the $2,200 per tonne level for the moment, despite the relentless rise in SHFE stocks. With signs of profit-taking beginning to emerge in other risk markets, aluminium could be vulnerable to further stale liquidation in the short-to-medium term.

  • Base metals investment analysis: Vulnerable if risk aversion spreads

    06 February 2018

    The base metals may continue to face some fund profit-taking in light of weaker risk sentiment, and especially during spells of dollar strength. But unless the current sell-off in equities is prolonged and hits the real economy, the pressure on the metals should prove contained, since their own fundamentals are tightening.

  • Copper: Forecasting accuracy tested

    06 February 2018

    MBR was the most accurate copper price forecaster in 2017 according to MB’s Apex poll of analysts. Our current base case price forecast for Q1 ($7,185 per tonne) is looking a little rich given the quarter-to-date average of $7,064 per tonne, as lead, nickel, tin and zinc have outshone copper this quarter so far. In fact, copper’s current Q1 average is more in line with our low-case scenario. There is still time for prices to realign with our base case, especially given the persistent dip buying interest amid expectations of tighter fundamentals ahead.

  • Demand Indicators: February 6 2018

    06 February 2018

    Demand indicators for the base metals market

  • Downloadable Base Metals Weekly Data February 6 2018

    06 February 2018

    Downloadable data for week February 6 2018

  • Lead: Closing in our $2,700-2,900 target

    06 February 2018

    Lead prices set fresh multi-year highs on Friday and the upward trend seems set to continue. LME stock inflows have petered out and outflows now dominate both the LME and SHFE. With cash prices moving above $2,650 per tonne, option delta hedging may well have helped fuel the rally. Our next upside price objectives remain in the $2,700-2,900 per tonne range – a target area we have been flagging up for a few months now.

  • Market Summary: On the defensive

    06 February 2018

    The base metals are more on the defensive as global risk aversion has picked up and the US dollar has strengthened. Tight underlying fundamentals should maintain dip-buying interest.

  • Nickel: History repeating itself

    06 February 2018

    Buying momentum has faded again and nickel prices have retreated from the $14,000 per tonne level to the mid-to-low $13,000s. This is reminiscent of the pull-backs that followed the September and November highs last year. It is also in line with our forecasts. Although there is room for a deeper price pull-back in the short term given the technical set-up, broad risk aversion and heavily long funds, dip-buying is also likely to be robust. We think nickel’s overall uptrend will remain intact.

  • Technical analysis: Consolidation

    06 February 2018

    The base metals are consolidating below their recent highs and, for the time being at least, continue to look well supported.

  • Tin: All eyes on Indonesia

    06 February 2018

    The run higher in tin prices this year has a lot to do with a lack of Indonesian exports recently. And when LME stocks are so low, prices are naturally very sensitive to such disruptions. But we believe Indonesian exports will normalise from later in February. This should move prices back from their current path tracking our high-case scenario (Q1 average of $22,000 per tonne, rising to $23,000 per tonne in Q2), to our base case ($20,500 per tonne in Q1 and $21,000 per tonne in Q2).

  • Zinc: Room on the downside

    06 February 2018

    Current guidance relating to the 70% of zinc mine production outside China that we track closely points to an output increase of as much as 8.8% in 2018. This should ensure higher smelter production and a more balanced refined market. Zinc is already looking somewhat overbought and with signs of a broader correction in risk sentiment emerging, there may be more room on the downside for zinc prices in the short term.