Research

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

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Base Metals

20 February 2018 Issue

  • Metals prices firmer but appear in no hurry to break higher for now

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    27 February 2018

    Base metals prices are generally holding up well, with zinc, nickel and tin all in high ground and well placed to challenge recent highs, while copper is in mid-ground and aluminium and lead prices are further from their highs.

  • Metals start the week on a firm footing

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    26 February 2018

    First impressions are that we are off to a bullish start to the week. With the Lunar New Year behind us, the markets should be able to focus on the year ahead.

  • Forecasting accuracy scorecard for 2017, bullish assumptions for 2018

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    23 February 2018

    Metal Bulletin Research (MBR) was the most accurate base metal price forecaster in Q4 2017, according to MB's Apex survey.

  • Metals prices consolidate after Thursday's rebounds

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    23 February 2018

    Thursday’s intraday price dips on the base metals were followed by strong rebounds and that implies good bargain hunting interest, even if there is not yet much interest to chase prices higher. As such, we may well see prices hold up in high ground for longer while traders adjust and get more used to these price levels, before the rallies extend further.

  • Metals sell off as China returns from holiday

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    22 February 2018

    With China back at work this morning after the Lunar New year holiday, volumes on the LME have been high and prices have fallen. The dollar index’s rebound continues and that is also a drag on the base metals. So overhead resistance may prove difficult to overcome for a while.

  • Metals prices drift as market awaits China's return

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    21 February 2018

    Two weeks ago metals prices were selling off, last week they were rebounding and this week they are consolidating. But, with China on holiday so far this week, we are not surprised prices are rudderless, with a slight weaker bias.

  • Aluminium: Knee-jerk reaction

    20 February 2018

    There was a positive knee-jerk price reaction to the Section 232 recommendations announced on Friday, but we suspect it won’t last. We present some thoughts on the subject this week. Aside from that, we remain concerned over the soon-to-expire Chinese winter production cuts in March, which raise the prospect of even higher stock levels and greater downward pressure on prices.

  • Base metals investment analysis: Funds continue to reduce exposure in copper

    20 February 2018

    The strength of the uptrend in nickel prices has exceeded our already-bullish expectations. We have this week replaced our previous base case scenario for Q1 ($12,200 per tonne) with our high-case scenario ($12,900 per tonne). In MB’s Apex survey, we were already the most bullish forecasters for nickel over Q2-Q4 2018. It looks like we were right to take this stance, but even our forecasts had begun to look too conservative and we have also raised these scenarios this week.

  • Copper: Better, but not convinced

    20 February 2018

    Short-covering helped copper reconquer the psychologically important $7,000 per tonne level last week on the back of a dollar weakness. But given the absence of real tightness in the copper market and the lack of bids from Chinese traders due to the Lunar New Year holiday, we are not convinced the latest rally attempt is sustainable in the short term. Generally, copper has underperformed this quarter and our price forecasts for the period look to have been a little too bullish. We have toned them down this week.

  • Demand Indicators: February 20 2018

    20 February 2018

    Demand indicators for the base metals market

  • Downloadable Base Metals Weekly Data February 20 2018

    20 February 2018

    Downloadable data for week February 20 2018

  • Lead: $2,700-2,900 is coming

    20 February 2018

    Lead prices rebounded strongly last week, although the rebound does seem to be attracting some scale-up selling. Given the tightening fundamentals, as seen by a pick-up in LME stock withdrawals, we expect the bull market in lead prices to continue.

  • Market Summary: Rebound confirms bullish bias

    20 February 2018

    The speed and extent of the rebounds across most of the base metals last week after the sell-offs earlier this month, suggest that broad sentiment for the group is strong. Given concerted global growth and lower investment in recent years on the next generation of mining projects, we think sentiment should remain bullish across the base metals for considerable time.

  • Nickel: Not bullish enough

    20 February 2018

    The strength of the uptrend in nickel prices has exceeded our already-bullish expectations. We have this week replaced our previous base case scenario for Q1 ($12,200 per tonne) with our high-case scenario ($12,900 per tonne). In MB’s Apex survey, we were already the most bullish forecasters for nickel over Q2-Q4 2018. It looks like we were right to take this stance, but even our forecasts had begun to look too conservative and we have also raised these scenarios this week.

  • Technical analysis: Uncertain

    20 February 2018

    Judging by the price action in the base metals, there are growing concerns that the latest rebound rally this month could prove short-lived.

  • Tin: Supply tightness to ease

    20 February 2018

    Tin has had a strong start to the year, but supply tightness is easing as more material from Indonesian is becoming available. In this regard, we maintain our Q1 average base case cash price forecast of $20,500 per tonne, compared to $21,022 per tonne in the quarter to date. Our annual 2018 base case forecast remains at $20,688 per tonne, up 2.9% from 2017.

  • Zinc: Bulls still in charge, for now

    20 February 2018

    Zinc prices have recovered strongly again. We had not expected such bullishness this year given how much supply is coming on stream. But, for now at least, the bulls remain in charge. A weak dollar, the robust macroeconomic backdrop and still-falling LME stocks continue to strengthen their resolve. Indeed, our price forecasts may need another upgrade in the coming weeks. We will see how trading resumes in China after the holidays there. The current chart picture points towards downside risks if $3,600 per tonne is not cleared.