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

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Base Metals

12 November 2019 Issue

  • Metals fail to catch risk-on appetite seen in equities


    19 November 2019

    While equity markets in the United States have pushed up to and are holding near record highs, the industrial metals are by comparison weak. This suggests global industry is still unsure about whether a post-trade war rebound is on the cards, or whether a trade deal will even emerge.

  • Countertrend moves underway in base metals despite risk-on in equities


    15 November 2019

    There are cross currents flowing through broader markets, risk-on is still evident in equities, base metals are generally pulling back in countertrend moves from the stronger tone seen in October and early November and there is some nervousness around judging by the pick-up in demand for havens in recent days.

  • Base metals prices under pressure after Trump threatens higher tariffs if deal not reached


    13 November 2019

    Markets in general are under pressure following United States President Donald Trump’s speech at the Economic Club of New York on Tuesday November 12, where he failed to provide any reassurance that a trade deal had been reached with China; indeed, Trump even threatened that tariffs would be “raised very substantially” if a deal was not reached.

  • Aluminium: Consolidating after short-covering

    12 November 2019

    Following a strong week of price gains last week, aluminium has moved into consolidation mode after finding technical resistance and after optimism over a “phase one” US-China trade deal faded. To unlock more gains, prices now need additional buying pressure to overcome the nearby technical resistance levels, but that would probably need trade deal optimism to return, which may only be a tweet away. Otherwise, aluminium’s focus could swing to retesting the October low of $1,705 per tonne and extending this year’s sequence of lower highs and lows.

  • Base metals investment analysis: Copper spec positioning normalization continues

    12 November 2019

    The normalization of the summer’s excessively short copper speculative position continues. Copper bears are getting less bearish and bulls are getting more bullish.

  • Copper: Short-term bullish, medium-term cautious

    12 November 2019

    We maintain our long-held bullish view that copper prices are starting a powerful rebound that should continue in the months ahead. It is being driven by improving macro dynamics and a resulting normalization in speculative positioning. Beyond a 6-month horizon, however, there is more uncertainty and we are more cautious. Trade concerns may drag on and global growth fears could yet resurface, leaving prices vulnerable to potential sell-offs next year. So, until the outlook clears, we caution against getting too bullish too soon for 2020.

  • Demand Indicators: 12 November 2019

    12 November 2019

    Demand indicators for the base metals market

  • Downloadable Base Metals Weekly Data November 12 2019

    12 November 2019

    Downloadable data for week November 12 2019

  • Lead: Correction, not a trend change

    12 November 2019

    For now, our view is that the steep pull-back in lead prices is a correction, not a trend change. After rallying close to 28% since May, the reversal is overdue and orderly. Moreover, at $181 per tonne it is comparable to the three previous corrections that have averaged $186 per tonne. So it may now have run its course.

  • Market Summary: Still hostage to trade talk news

    12 November 2019

    News flow regarding progress, or lack thereof, in US-China trade negotiations continues to determine the mood in the base metals and remains the main source of week-to-week volatility.

  • Nickel: Consolidation continuing

    12 November 2019

    Although there is still a residual technical case for nickel’s Q3 price rally to be reignited this quarter, it looks increasingly unlikely. Instead, we stand by the view – which has been true so far – that post-peak consolidation will continue to dominate nickel for the remainder of Q4.

  • Technical analysis: Overall trend still grinding higher

    12 November 2019

    While most base metals have been working higher in recent weeks, albeit in a ‘two steps forward, one step back’ fashion, nickel and lead have been heading lower. But we see those pull-backs as counter trend moves, correcting overbought conditions.

  • Tin: Expect a steeper recovery in the months ahead

    12 November 2019

    We expect a steeper rebound in LME tin prices in the months ahead, principally because we think that refined market conditions should tighten more strongly as a result of ongoing refined production cuts and a rebound in refined tin consumption due to revival in the semiconductor sector. The notable increase in the SHFE/LME tin ratio and the abnormally low speculative positioning lead us to believe that a powerful rebound in prices is on the cards by year-end.

  • Zinc: Resilient, for now

    12 November 2019

    So far at least, zinc seems to be weathering the downturn in risk sentiment this week better than its peers. Dip buying interest below $2,500 per tonne is supportive, bolstered by bullish technical indicators and low stocks. For the moment, we remain comfortable maintaining a slightly bullish short-term outlook for zinc prices