Research

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

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Base Metals

15 May 2018 Issue

  • Metals prices consolidate after Monday's gains

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    22 May 2018

    The base metals are mostly giving back some of the gains they made on Monday, so rangebound trading continues overall. Nickel and lead seem to be the two metals with most direction, with the latter supported after the arbitrage window into China opened. The strong dollar is likely to remain a headwind.

  • Metals prices mainly firmer after US/China trade war avoided

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    21 May 2018

    The base metals generally remain rangebound, but volumes have picked up and on balance the mood is more positive this morning, helped by the easing trade tensions between China and the US. The strong dollar is likely to remain a headwind though.

  • Nickel and aluminium prices have direction, the rest are listless

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    18 May 2018

    The base metals are diverging this morning with the main movers being nickel, where prices have climbed 1%, and aluminium, where prices have dropped 0.6%. We would expect more broad-based strength within the complex if economic indicators begin to improve again and trade concerns subside.

  • Metals prices recover after Tuesday's show of weakness

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    16 May 2018

    Base metals are little changed this morning, but this follows a day of two halves on Tuesday where prices came under pressure as the morning progressed before running into buying toward the end of the day. This typifies the market at the moment - generally rangebound but nervous.

  • Aluminium: Struggling to stabilize

    15 May 2018

    Aluminium prices continue to consolidate. There are many cross-currents buffeting this market and leaving no clear bull or bear narrative at the moment. Range-trading is likely to continue for the time being, but we would not be surprised to see a downside bias set in if Chinese production and exports continue to rise. Our technical analysis also has a bearish short-term bias.

  • Base metals investment analysis: Light short-selling still holding copper back

    15 May 2018

    The latest CFTC data revealed a second consecutive week of net fund short-selling in Comex copper last week, after four weeks of short-covering. Better economic data is needed before funds react aggressively enough to drive another copper price rally.

  • Copper: Fundamentally healthy

    15 May 2018

    Copper has enjoyed a small bout of short-covering of late, as demand has improved, supply is being disrupted and exchange stocks are falling. We expect this to translate into stronger physical premiums, improved investor sentiment, and higher prices in line with our forecasts. But after a weak April, our previous Q2 base case has slipped out of reach. We have downgraded our price forecasts as a result, but remain bullish overall and still expect prices to comfortably establish themselves above $7,000 per tonne in Q3 and Q4 this year.

  • Demand Indicators: May 15 2018

    15 May 2018

    Demand indicators for the base metals market

  • Downloadable Base Metals Weekly Data May 15 2018

    15 May 2018

    Downloadable data for week May 15 2018

  • Lead: A little less bullis

    15 May 2018

    Prices seem to have found support and are rebounding. The main bullish factor is in the past week is the likelihood of US sanctions against Iran, which could restrict lead supply in Asia. This may be swamped by an acceleration in Chinese supply, however. While we remain bullish, prices have underperformed our expectations recently, we have revised down our Q2-Q4 price forecasts.

  • Market Summary: Rangebound

    15 May 2018

    The base metals generally remain rangebound with upside attempts running into selling, but underlying sentiment strong enough to support price dips. Economic data has been solid, but unspectacular, trade concerns continue and geopolitical tensions are high. It may take a positive change in these factors to improve business confidence and investor sentiment sufficiently to rekindle price rallies among the base metals with a clear bull narrative.

  • Nickel: Getting bullish again

    15 May 2018

    Nickel prices are looking stronger again having convincingly broken up through the $14,000 per tonne level this week. Sentiment seems to be getting a lift from bullish talk about the electric vehicle (EV) revolution at LME Week Asia, which is reminiscent of the EV excitement that engulfed nickel around the time of LME Week in London last October.

  • Technical analysis: Nickel and lead leading the way at the moment

    15 May 2018

    Technically, aluminium, tin and zinc are vulnerable to further weakness in the short term. Nickel, lead and copper, it that order, have been looking strongest recently and are most likely to push higher.

  • Tin: Higher supply, lower prices coming

    15 May 2018

    Tin is showing increasing signs of weakness as financial players test the strength of the psychological support at $21,000 per tonne. While investor sentiment toward the broad-based metals complex has been undermined by the strong run-up in the dollar, a growing number of signs points to weaker fundamentals in the tin market. The reduced tightness has been seen in the paper market so far in Q2. But since a pickup in Indonesian tin shipments is already on its way, it is a question of “when” and not “if” before the physical market experiences a similar fate and tin prices weaken more strongly.

  • Zinc: Bulls have stepped away, for now

    15 May 2018

    Consolidation continues ahead of overhanging resistance from the 20-day moving average, which currently stands at $3,129 per tonne. Zinc prices lack clear direction at the moment, and we should expect more volatility. They remain vulnerable to further technical weakness in the short term.