Research

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

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Base Metals

8 January 2019 Issue

  • Monday's price weakness attracts dip-buying after China stimulates its economy

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    15 January 2019

    LME base metals prices were firmer across the board this morning. Bargain hunting stepped in to take advantage of Monday’s price weakness and markets received a confidence boost after China cut some taxes.

  • Base metals prices mostly weaker following poor Chinese trade data

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    14 January 2019

    Tin was the only base metal trading in positive territory this morning after the complex was knocked by disappointing Chinese trade data. Some optimism on trade talks or more news about Chinese economic stimulus may help to restore the more bullish sentiment of last week

  • Strong start to trading day across the LME complex

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    11 January 2019

    The base metals are stronger this morning, led by zinc and nickel. Volumes have been above average and the US dollar has been weaker.

  • Metal prices bullish, but confidence still low

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    10 January 2019

    Weaker Chinese inflation data overnight has somewhat countered the recent optimism from positive US/China trade talks. While the markets are likely to remain nervous until a trade deal is done, there does seem to be some underlying strength in the commodities. With base metals, gold and oil prices all strengthening in recent days that could unsettle some of the shorts.

  • Prices buoyant on US/China trade hopes, but still vulnerable until specifics emerge

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    09 January 2019

    Base metals were stronger again this morning, led by tin. Positive noise out of the US/China trade talks are providing a boost to the complex and to broader markets too.

  • Aluminium: China the key

    08 January 2019

    We believe the main trend for aluminium prices this year should be sideways, with rally attempts sold into. While we don’t think the market will plumb the depths it did in 2015 – as a 1.2 million tonne global supply deficit will provide fundamental support – we are wary that the downtrend in prices that dominated H2 2018 may not have seen its lows yet. Overall, we expect aluminium prices to average $1,980 per tonne in 2019, down from $2,111 per tonne in 2018. China will be the key for aluminium, with stimulus to boost demand, cutbacks to trim supply and trade to adapt to barriers.

  • Base metals investment analysis: Risks moving to the upside, but when to dive back in?

    08 January 2019

    Investors have become underweight the base metals and, given their strong fundamentals, it may not take much of an improvement in the macro backdrop to trigger rounds of fund short-covering and buying.

  • Copper: Most downside risks already discounted

    08 January 2019

    After a disappointing 2018 the current copper price may have already discounted most downside risks. Since we expect the macro backdrop to turn friendlier as H1 2019 progresses – on more policy easing and stimulus in China and de-escalation in the US-China trade dispute – the healthy fundamentals of the copper market should reassert themselves.

  • Demand Indicators: January 8 2019

    08 January 2019

    Demand indicators for the base metals market

  • Downloadable Base Metals Weekly Data January 8 2019

    08 January 2019

    Downloadable data for week January 8 2019

  • Lead: Slow start, but plenty of promise

    08 January 2019

    Lead prices are stuck in low ground around the $1,950 per tonne level, some $100 per tonne below where they ended 2018. While the other base metals saw fresh strength at the end of last week, lead prices were left behind. But solid fundamentals in the lead market are expected to provide support and underpin higher prices as the year progresses.

  • Market Summary: Optimism to start the new year

    08 January 2019

    Having traded lower for most of December, the base metals ended last year quite downbeat. But a lot of the negatives are surely priced in and, looking forward, the risks are to the upside if, as we expect, the US and China continue to work towards a trade deal, the Fed keeps talking dovishly and Chinese authorities maintain stimulus efforts. Beneath the surface the base metals’ fundamentals remain tight, so any improvement in the macro backdrop should trigger buying.

  • Nickel: Bulls starting to come back

    08 January 2019

    Although nickel has recovered above the $11,000 per tonne level, market participants still seem wary about this rebound and such a cautious view has capped the upside for now. , but a bullish bias should develop during H1 as the macro situation is de-risked. The continuing supply deficit is a bullish constant for nickel, which should see prices extend their recovery as overhanging macro risks disperse.

  • Technical analysis: Trying to rebound

    08 January 2019

    Rebounds are underway after many base metals hit fresh lows in late December and early January, but there is plenty of resistance to erode and, as yet, not an abundance of buying pressure.

  • Tin: Supply tightness set to drive prices higher

    08 January 2019

    Last year was marked by a resilient performance for tin, despite a broad-based sell-off across the base metals complex. This year, we expect the macro backdrop to turn friendlier and the supply-side fundamentals of the tin market to tighten even more. In this context, we think that tin prices should perform well in 2019.

  • Zinc: Negative themes overdone

    08 January 2019

    The year 2019 is expected to mark a transition for the zinc market’s fundamentals as rising concentrate supply gradually rebalances the refined market. Capacity utilization at Chinese smelters will be key, but they are unlikely to lift production until after the Lunar New Year, and even then it may be a slow ramp-up to begin with. In the meantime, fresh LME warrant cancellations and forward-buying will draw on already low global stocks. With a price base forming around $2,400 per tonne, short-term price risks are shifting to the upside.