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26 February 2019
After recent strong performances by the LME base metals, most prices started to consolidate at the beginning of the this week and are down an average of 0.3% this morning, Tuesday February 26.
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25 February 2019
Last Thursday’s brief correction in base metals prices was just a pause in what is turning into a strong rally, with the LME complex up by an average of 0.6% this morning, Monday February 25. Copper and tin are leading, extending into fresh highs for the year.
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21 February 2019
A correction is underway in the LME three-month base metals prices, which are off by an average of 0.5% on the morning of Thursday February 21, compared with Wednesday’s closing levels. This morning’s price pullbacks follow a day of strength on Wednesday when the complex closed up with gains averaging 1.2%.
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19 February 2019
Price weakness lately has been limited by support around $1,850 per tonne, but selling pressure remains. Coupled with demand concerns and the prospect of rising supplies from Rusal and China, this suggests that downside price risks remain in the short term.
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19 February 2019
CFTC data delayed by the US government shutdown is starting to reveal that Comex copper speculators were heavily net short in January. Covering those positions has likely fuelled the copper price recovery since then.
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19 February 2019
Copper rebounded well at the end of last week, which was, in our view, largely attributable to an increase in China’s economic growth expectations, itself driven by an improvement in domestic credit growth dynamics in January. We believe that the rebound in copper prices has room to run in the coming months, owing to friendly macro conditions, a forthcoming pick-up in Chinese seasonal demand, underweight speculative positioning and supply disruptions.
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19 February 2019
Demand indicators for the base metals market
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19 February 2019
Downloadable data for week February 19 2019
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19 February 2019
Following the re-warranting of 24,800 tonnes of cancelled lead warrants on February 1, the outflow of LME stocks has dropped, which has reduced the bullish undertone in the market. Combined with poor auto sales data and generally weak economic data, this means the demand outlook is not particularly bright. That said, the supply outlook is far more supportive as production remains constrained.
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19 February 2019
Tin is the only base metal that is clearly in a strong uptrend, with the others looking less directional and somewhat indecisive after their recent rallies off the January lows. Macro data releases continue to warn that the global economy has been slowing down and in that sense the climate is not overly bullish for the base metals. But there is also an undercurrent of optimism that things will change for the better if a US-China trade deal can be struck. After all, metal supply-demand balances are tight, the Chinese government is supporting its economy with stimulus measures and the Fed has turned dovish. And if the metals industry has destocked over recent quarters then any pick-up in optimism could lead to restocking. This is underpinning our cautions bullish price forecasts.
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19 February 2019
Nickel prices seem to have found support after the pull-back from their early February highs. While we cannot rule out a deeper technically-driven retreat in the short term, a fourth consecutive annual supply deficit is on the card this year, so the fundamentals will ultimately pressure prices higher during 2019.
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19 February 2019
While in general consolidation continues to dominate the base metals, resistance levels rather than support levels that look more vulnerable once consolidation runs its course in the coming days and weeks.
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19 February 2019
While the LME tin price trades comfortably above $20,000 per tonne, we caution that the market could be vulnerable to some profit-taking by Q1-end because the forward supply tightness seems to have been fully discounted by market participants. But as we document in this week’s analysis, bright long-term demand prospects from EVs could become the next market focus, potentially posing a great upside risk to our price forecasts.
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19 February 2019
While zinc prices sold off last week, support was found around $2,600 per tonne and the short-term risks appear to be shifting to the upside. The technical picture remains constructive, and recent supply-side developments could amplify structural tightness and turn prices and spreads increasingly volatile due to falling availability. In this light, our base case Q1 price forecast of $2,580 per tonne looks too cautious now. Our current high-case scenario for this quarter envisages an average of $2,700 per tonne.