Research

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

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Base Metals

11 February 2020 Issue

  • Base metals prices mixed, but broader markets have second thoughts about coronavirus impact

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    18 February 2020

    Broader markets, mainly equity indices, have been fairly complacent about the potential negative economic impacts of the coronavirus (2019-nCov). But this morning, Tuesday February 18, that may be changing with Asian equities down across the board as more companies and countries get jittery.

  • Metals prices generally buoyant after China adds further financial stimulus

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    17 February 2020

    China’s race to contain the coronavirus (2019-nCov), combined with its financial stimulus, are providing the markets with more than enough hope, with risk-on being seen across most of the metals and many equity indices, especially in western markets, this morning, Monday February 17.

  • Markets weaker as changes in coronavirus data cause more uncertainty

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    13 February 2020

    A spike in the reported death toll from the novel coronavirus (2019-nCov) in China led to a pullback in risk asset prices in early trading this morning, Thursday February 13, but the spike is not all what it seems.

  • Base metals prices consolidate, market waiting to gauge fallout from coronavirus epidemic

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    12 February 2020

    While equity markets remain buoyant on optimism that the spread of the novel coronavirus (2019-nCoV) may be slowing, the base metals seemed more circumspect on Wednesday February 12 as they wait to see what the fallout from the virus will be in terms of how much disruption the manufacturing sector is suffering.

  • Aluminium: Trying to build a base

    11 February 2020

    Given the macro uncertainties and judging by the technical configuration, we envisage another retest of the base of aluminium’s well-established downtrending channel before there is any real scope for a meaningful rebound attempt. As such, we envisage prices ‘muddling through’ for a while, similar to October-November 2019 when they built a base from where they ultimately started to climb toward the upper boundary of the channel.

  • Base metals investment analysis: Higher prices will come when spec positioning normalizes

    11 February 2020

    Speculative positioning may have got overly short in response to the coronavirus uncertainty. At some point, positioning will normalize and recalibrate with the underlying macro and fundamental narratives for the base metals. That should bring higher prices.

  • Copper: More room for short-covering

    11 February 2020

    Copper has experienced a small bout of short-covering over the past week, after January’s sell-off. Refined market conditions have clearly deteriorated since the start of the year, especially in China due to the coronavirus outbreak. However, we expect the rebound in copper prices could extend further into the end of Q1 if macro fears continue to ease and amid loosening financial conditions across the globe. Our near-term bullish view is macro- and tactically-driven.

  • Demand Indicators: 11 February 2020

    11 February 2020

    Demand indicators for the base metals market

  • Downloadable Base Metals Weekly Data February 11 2020

    11 February 2020

    Downloadable data for week February 11 2020.

  • Lead: Prices still heavy

    11 February 2020

    Lead prices struggled to rebound last week and closed Monday this week at a seven-month low. There are three good reasons for the weakness, including (1) the Wuhan coronavirus is likely to deal a further blow to already weak Chinese vehicle sales, (2) China’s exports of lead are minimal so there is little threat from supply disruptions, and (3) the end of the high-demand season associated with the northern hemisphere winter is approaching. Prices will remain under pressure until it looks like China’s factories and logistics are getting back to normal.

  • Market Summary: All about the coronavirus

    11 February 2020

    Base metal price direction is still all about the coronavirus and its potential impacts. More often than not in recent days, the metals have worked higher rather than lower, taking confidence from buoyant equity markets, the Chinese authorities’ steps to support the economy, and more news about virus-related disruptions on the supply side not just the demand side. But we still expect more choppy trading in the days and weeks ahead until there is more clarity on the impacts and on the timetable for returning to normality.

  • Nickel: Q1 price, NPI forecasts revised

    11 February 2020

    We have nudged lower our Q1 2020 nickel price forecasts again this week and have reviewed our assumptions for NPI production in China in light of virus-related logistical lockdowns likely to be choking off ore supply to smelters. But ore not converted into NPI in China in Q1 will relieve the tightness otherwise set to emerge in H2 due to the expected effect of Indonesia’s ore export ban.

  • Technical analysis: Higher prices will come when spec positioning normalizes

    11 February 2020

    Speculative positioning may have got overly short in response to the coronavirus uncertainty. At some point, positioning will normalize and recalibrate with the underlying macro and fundamental narratives for the base metals. That should bring higher prices.

  • Tin: Fragile stabilization

    11 February 2020

    The LME tin price has experienced a fragile stabilization since the start of the month after a weak performance in January alongside the other base metals. While we concur that refined market conditions have softened this year, especially in China where destocking activity is taking place, we expect some short-covering in LME tin in the near term, providing macro fears over the coronavirus continue to abate and the dovish response from major central banks is maintained.

  • Zinc: Inflows compound virus worries

    11 February 2020

    The recent build in exchange stocks is compounding a weak demand outlook created by uncertainty over the fallout from the coronavirus outbreak.