суббота, 31 декабря 2016 г.
пятница, 30 декабря 2016 г.
четверг, 29 декабря 2016 г.
Metals consolidate into year-end
The base metals are consolidating this morning with average gains of 0.3% and volume of 4,908 lots, as of 06:32 GMT. Nickel and tin prices are off 0.2% and 0.6% respectively, while the rest are rebounding after recent weakness, led by a 1.1% rise in zinc prices, while aluminium prices are up 0.8% and copper prices are up 0.5% at $5,525 per tonne. Precious metals are slightly firmer with gains averaging 0.2%, with gold prices at $1,161.20 per oz.
Base metals were for the most part weaker yesterday, December 29, with prices down an average of 0.8%, led by a 2.2% fall in zinc prices, with lead prices off 1.5% and aluminium prices down 1.2% – copper prices were off 0.4% at $5,495 per tonne. Conversely, precious metals are firmer yesterday with prices up an average of 1% with gold prices up 1.6% at $1,160.30 per tonne.
In Shanghai, the metals are mixed this morning December 30, the main gainer is aluminium with prices up 1.3%, copper prices are little changed at Rmb 45,560 per tonne and lead prices are off 0.8%, while the rest are down between 0.3% and 0.5%. Spot copper in Changjiang is off 0.1% at Rmb 44,940-45,140 per tonne, the spread is at an equivalent of $60 per tonne contango, while the LME/Shanghai copper arb ratio is at 8.25.
In other metals in China, May iron ore prices are down 2.9%, steel rebar prices are off 1.8%, while gold and silver prices are both up 1.2%.
Equities were mixed yesterday, December 29, with the Euro Stoxx 50 closing up 0.4%, while the Dow closed down 0.1% – the 20,000 level on the Dow remains elusive, the high this year being 19,987.63. In Asia this morning, the Nikkei is off 0.2%, the Hang Seng is up 1%, the CSI 300 is up 0.1%, the ASX 200 is down 0.6% and the Kospi is up 0.1%.
In FX, the dollar index is consolidating yesterday’s losses with the index recently quoted at 102.38, the euro at 1.0530 is consolidating yesterday’s gains, sterling is at 1.2278, the yen is rebounding at 116.77, as is the aussie at 0.7230. The yuan seems to be building a base, it was recently quoted at 6.9316 and most emerging market currencies we follow are consolidating, most with a slightly firmer bias.
Economic data out today includes Spanish flash CPI, UK housing equity withdrawals and US Chicago PMI – see table below for more details.
The corrections in the base metals that have unfolded in December have continued in recent days to varying degrees, with lead prices retreating the most while copper prices have managed to trade sideways. For now, we see the corrections as profit-taking ahead of year-end, key now will be whether buying returns early next year to see the overall up trends resume, or whether the consolidation continues, in which case the market may start to worry that any buying may be put off until after the Chinese Lunar New Year. If that happens then further long liquidation could unfold. With prices under pressure in recent weeks, the buying we are seeing this morning, may well be some short-covering by those that have ridden the short-term down wave.
Precious metals have seen some short-covering/buying into year-end, gold, silver and palladium prices have led the way, while platinum prices have at best turned flat. Given the extent of the sell-off in gold prices in the second half of 2016, the metal has considerable downward momentum, so the recent buying may well be short-covering ahead of year-end. With equities buoyant the opportunity cost of holding gold remains high – we wait to see if the approach of president-elect Donald Trump taking the helm leads to a pick-up in safe-haven buying.
| Overnight Performance | ||||
| GMT | 06:32 | +/- | +/- % | Lots |
| Cu | 5525 | 29.5 | 0.5% | 1435 |
| Al | 1697.5 | 13.5 | 0.8% | 1208 |
| Ni | 10125 | -25 | -0.2% | 854 |
| Zn | 2550 | 26.5 | 1.1% | 1142 |
| Pb | 1992.5 | 2 | 0.1% | 189 |
| Sn | 20825 | -125 | -0.6% | 80 |
| Average | 0.3% | 4,908 | ||
| Gold | 1161.2 | 0.9 | 0.1% | |
| Silver | 16.2 | 0 | 0.0% | |
| Platinum | 905 | 2 | 0.2% | |
| Palladium | 672.3 | 2.3 | 0.3% | |
| Average PM | 0.2% | |||
| SHFE Prices 06:34 GMT | RMB | Change | % Change |
| Cu | 45560 | -10 | 0.0% |
| AL | 12810 | 165 | 1.3% |
| Zn | 20880 | -55 | -0.3% |
| Pb | 17540 | -145 | -0.8% |
| Ni | 85520 | -370 | -0.4% |
| Sn | 146060 | -750 | -0.5% |
| Average change (base metals) | 0 | -0.1% | |
| Rebar | 2898 | -53 | -1.8% |
| Au | 270.95 | 3.25 | 1.2% |
| Ag | 4115 | 47 | 1.2% |
| Economic Agenda | |||||
| GMT | Country | Data | Actual | Expected | Previous |
| 8:00am | spain |
Spanish Flash CPI y/y
|
0.9% | 0.7% | |
| 9:30am | UK |
Housing Equity Withdrawal q/q
|
-11.1B | -12.6B | |
| 2:45pm | US |
Chicago PMI
|
56.5 | 57.6 | |
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Gold tops $1,160/oz after US dollar slides
The spot gold price topped $1,160 per oz during Asian trading hours on Friday December 30 after the US dollar weakened on Thursday.
The spot gold price was recently quoted at $1,161.30/1,161.70 per oz, up $1.20 on the previous close. Trade has ranged from $1,157.90 to $1,163.28 so far, the higher end being the highest since December 14.
The US dollar has eased amid quiet trading during year-end holidays, providing a boost for gold and silver prices, China’s Zhengjin Precious Metals said on Friday morning. The broker sees short-term support for the yellow metal at $1,150 per oz and resistance at $1,190.
The US dollar index had dipped as low as 101.53 on Thursday, the lowest since December 14. The index has since rebounded 0.23% to 102.30 recently on Friday.
In US data released on Thursday, weekly unemployment claims beat expectations at 265,000, but the November goods trade balance undershot at -65.3 billion, while preliminary wholesale inventories for November disappointed at 0.9%.
It is a light day for data with mainly the Spanish flash CPI and US Chicago PMI of note later today.
In other commodities, the Brent crude oil spot price recently fell 0.32% to $56.76 per barrel.
In equities, the Shanghai Composite has risen 0.16% to 3,101.10 so far today.
In the other precious metals, the spot silver price increased $0.033 to $16.220/16.245 per oz. Platinum gained $3 to $902/907 per oz, and palladium rose $3 to $670/675 per oz.
On the Shanghai Futures Exchange, gold for June delivery was recently at 270.75 yuan ($39) per gram, and the June silver was at 4,115 yuan per kg.
(Editing by Kyle Docherty)
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среда, 28 декабря 2016 г.
Base metals vulnerable to renewed worries over China
- Global risk sentiment deteriorates as investor fears over China mount – most risk asset classes are vulnerable to further selling pressure.
- Base metals stabilise thanks to a weaker dollar so far this morning, while precious metals rebound strongly on increased safe-haven bids.
- The economic agenda is busy today – we expect risk aversion to continue in the days ahead, leading us to favour precious metals relative to base metals.
This morning, Thursday December 29, base metals on the LME are stabilising somewhat, posting an average gain of 0.3%, after witnessing broad-based downward pressure yesterday as a result of profit-taking, reflected in the loosening of nearby spreads, on the back of a resurgence of risk aversion. Copper and nickel are the strongest performers, rising 0.6% each. Tin, down 0.3%, is the only base metal on the LME to post a loss.
In Shanghai, base metals on the SHFE are broadly stable, posting an average gain of 0.2%. While zinc is the strongest performer, climbing 2.3%, aluminium, down 1.3%, is falling the most. At the same time, spot copper in Changjiang has edged 0.9% lower to 44,970-45,170 yuan, while the contango with the futures is at $96 per tonne, and the LME/Shanghai copper arb ratio is unchanged from yesterday at 1:8.2.
This morning, precious metals continue their rebound, with the complex showing an average gain of 0.9%, after a strong session yesterday, in which silver and palladium managed to outperform gold and palladium in spite of a lower level of risk appetite.
The US government bond market strengthened yesterday, driving yields lower, in part in response to an increase in risk aversion amid disappointing domestic pending home sales in November and renewed investor fears over China’s capital outflows. The 10-year US bond yield closed at 2.51%, down from its recent peak of 2.60% from December 15.
Broad equities lost ground yesterday amid thin trading volumes. In Europe, the Euro Stoxx 50 was little changed to close at 3,279 amid a muted data flow. In the USA, weaker-than-expected data prompted investors to take some profits – the Dow Jones retreated 0.56% to close 19,834 while the S&P 500 moved 0.80% lower to finish the trading day at 2,251. In Asia this morning, equities are witnessed selling pressure. Apart from the CSI 300 (+0.24%), the Nikkei 225 (-1.49%), the Hang Seng (-0.10%) and the Kospi (-0.04%) are trending lower early in the trading session.
The US dollar is consolidating strongly this morning, with the DXY trading at 102.87 at the time of writing, after strengthening against most other currencies yesterday, especially the euro as a result of increased political tensions and the yuan driven by capital outflows from China. But the dollar weakened slightly against the yen, in part reflecting the unwinding of carry trades amid the pick-up in risk aversion. We believe that the long dollar trade has become somewhat crowded so we would not be surprised to see a weaker dollar in the days ahead, especially if risk aversion continues, which may give a boost to base and precious metals.
The economic agenda is busy today. In Europe, investors will pay attention to the release of M3 money supply and private loans for November to better assess whether economic conditions are improving in the area. In the US, investors will particularly focus on the release of the latest weekly unemployment claims to see whether the labor market continues to tighten and changes in US crude oil inventories, which could have a direct impact on oil prices and thus indirect implications of metals pricing. Volatility across the metals markets may therefore surge, especially when taking into account the poor liquidity conditions during the year-end quasi-holiday.
Base metals may remain vulnerable to additional profit-taking in the coming days because investors seem to express renewed fears over the capability of the Chinese government to prevent accelerating capital outflows from destabilising the economy. Due to poor liquidity conditions, we think that tin may be the most vulnerable base metal to downside in case of a more pronounced wave of risk aversion.
Precious metals may continue to strengthen in the coming days amid renewed turbulence across risky assets as we witnessed early this year. Indeed, we expect investors to turn increasingly risk-off amid renewed investor fears over China’s FX reserves, which should prompt renewed buying interest across the complex. In this environment, we may continue to overweight gold and platinum over silver and palladium.
| Overnight Performance | ||||
| GMT | 04:31 | +/- | +/- % | Lots |
| Cu | 5546 | 30.5 | 0.6% | 619 |
| Al | 1705 | 1 | 0.1% | 475 |
| Ni | 10180 | 65 | 0.6% | 635 |
| Zn | 2585 | 4 | 0.2% | 637 |
| Pb | 2028.5 | 8.5 | 0.4% | 115 |
| Sn | 20875 | -65 | -0.3% | 17 |
| Average | 0.3% | 2,498 | ||
| Gold | 1149.63 | 7.13 | 0.6% | |
| Silver | 16.176 | 0.171 | 1.1% | |
| Platinum | 907.4 | 9.4 | 1.0% | |
| Palladium | 673 | 7 | 1.1% | |
| Average PM | 0.9% | |||
| SHFE Prices 04:31 GMT | RMB | Change | % Change |
| Cu | 45640 | 110 | 0.2% |
| AL | 12635 | -170 | -1.3% |
| Zn | 21110 | 480 | 2.3% |
| Pb | 17655 | -130 | -0.7% |
| Ni | 86210 | -150 | -0.2% |
| Sn | 147740 | 1560 | 1.1% |
| Average change (base metals) | 0 | 0.2% | |
| Rebar | 2976 | -39 | -1.3% |
| Au | 268.55 | 2 | 0.8% |
| Ag | 4092 | 49 | 1.2% |
| Economic Agenda | |||||
| GMT | Country | Data | Actual | Expected | Previous |
| 9:00am | EU | M3 Money Supply y/y | 4.4% | 4.4% | |
| 9:00am | EU | Private Loans y/y | 1.9% | 1.8% | |
| 1:30pm | US | Unemployment Claims | 277K | 275K | |
| 1:30pm | US | Goods Trade Balance | -61.5B | -61.9B | |
| 1:30pm | US | Prelim Wholesale Inventories m/m | 0.1% | -0.4% | |
| 4:00pm | US | Crude Oil Inventories | 2.3M | ||
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Base metals underperform precious metals despite positive global risk sentiment
- The London Metal Exchange (LME) reopens today after being closed for holidays earlier this week.
- The poor liquidity conditions stemming from the year-end holiday season is likely to intensify the sell-off in base metals and the rebound in precious metals.
- Global risk sentiment remains positive amid a muted global data flow.
This morning, base metals on the LME are moving lower, posting an average loss of 0.6%. Nickel is the worst performer, falling 2.2%, followed closely by lead, weakening by 1.8%. Copper and aluminium are the only metals in positive territory, showing gains of 1.3% and 0.6% respectively. But precious metals are enjoying strong gains, with the complex rising 1.7%.
In Shanghai, base metals on the SHFE are trading much stronger, posting an average gain of 1.7%. Tin is the strongest performer, climbing 3.3%, followed by copper, appreciating by 2.7%. Aluminium, down 0.5%, is the only metal to post a loss. At the same time, spot copper in Changjiang is climbing 3.0% at 45,360-45,560 yuan, while the contango with the futures is at $37 per tonne, and the LME/Shanghai copper arb ratio is at 1:8.2.
Bonds – The US government bond market weakened slightly yesterday, with the 10-year US bond yield closing up at 2.56%, slightly below its recent peak of 2.60% reached in mid-December. Investors continued to expect stronger economic growth and higher inflation thanks to pro-growth policies implemented by the Trump’s incoming administration.
Stocks – Broad equities ended stronger yesterday amid thin trading volumes. In Europe, the Euro Stoxx 50 closed up 0.1% at 3,279. In the US, the Dow Jones edged 0.06% higher to 19,945 while the S&P 500 moved 0.22% higher to close at 2,269. In Asia this morning, equities are trading mixed. While the Kospi is down 0.87% and the CSI 300 down 0.44%, the Hang Send is up 1.0% while the Nikkei 225 is about flat.
FX – The dollar is about flat this morning, with the DXY trading at 102.8, broadly unchanged since the middle of December. The dollar has enjoyed a significant appreciation since the victory of Trump in the US elections on expectations of stronger global growth dynamics and a faster monetary policy tightening cycle. The horizontal consolidation in the dollar may continue early next year before another powerful rally emerge. This should remove temporarily a strong headwind for base and precious metals.
The economic agenda is very light today. Investors will focus to the release of US pending home sales for November this afternoon and the Bank of Japan (BoJ) summary of opinions. Despite a muted data flow, volatility across the metals may pick up considering the poor liquidity conditions during the year-end holiday.
Base metals may continue to trade lower in the days ahead as investors will continue to deleverage during this holiday season rather than taking tactical bets. Excessive bullishness seen in some metals, most notably copper, seems to have paused for now, the latest CFTC statistics showed. Due to poor liquidity conditions, the fluctuations across the complex could be intensified.
Precious metals may continue to rebound in the coming days, principally because the dollar rally seems to have paused while US real rates appear to have peaked temporarily. Because global risk sentiment remains presently positive, we expect gold and platinum to underperform silver and palladium.
| Overnight Performance | ||||
| GMT | 07:52 | +/- | +/- % | Lots |
| Cu | 5540 | 70.5 | 1.3% | 3923 |
| Al | 1725 | 10 | 0.6% | 1871 |
| Ni | 10200 | -230 | -2.2% | 4357 |
| Zn | 2538 | -39 | -1.5% | 3914 |
| Pb | 2030 | -37 | -1.8% | 657 |
| Sn | 21000 | -25 | -0.1% | 28 |
| Average | -0.6% | 14,750 | ||
| Gold | 1142.3 | 8.35 | 0.7% | |
| Silver | 15.925 | 0.205 | 1.3% | |
| Platinum | 903.5 | 12.5 | 1.4% | |
| Palladium | 677.2 | 21.2 | 3.2% | |
| Average PM | 1.7% | |||
| SHFE Prices 07:55 GMT | RMB | Change | % Change |
| Cu | 45620 | 1180 | 2.7% |
| AL | 12650 | -60 | -0.5% |
| Zn | 20600 | 615 | 3.1% |
| Pb | 17590 | 120 | 0.7% |
| Ni | 85820 | 1060 | 1.3% |
| Sn | 146980 | 4690 | 3.3% |
| Average change (base metals) | 0 | 1.7% | |
| Rebar | 2989 | 58 | 2.0% |
| Au | 267.3 | 1.95 | 0.7% |
| Ag | 4042 | 30 | 0.7% |
| Economic Agenda | |||||
| GMT | Country | Data | Actual | Expected | Previous |
| 3:00pm | US | Pending Home Sales m/m | 0.6% | 0.1% | |
| 11:50pm | Japan | BOJ Summary of Opinions | |||
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вторник, 27 декабря 2016 г.
Gold rebounds amid bargain hunting
The spot gold price rose during Asian trading hours on Wednesday December 28 amid bargain hunting and stronger crude oil prices.
The spot gold price was recently quoted at $1,141.15/1,141.55 per oz, up $7.40 on the previous close. Trade has ranged from $1,138.45 to $1,142.30 so far.
The spot gold price had rallied to as high as $1,150.15 per oz on Tuesday, the highest since December 14, amid bargain hunting, though this was later sold down during US trading hours following a strong stock market performance.
Some support also came from a stronger crude oil price with the Brent crude oil spot price rising as high as $56.24 per barrel on Tuesday, the highest since December 13. It was recently at $55.94 on Wednesday, up 1.66% from the previous day’s close.
The US dollar index is also expected to come under pressure over concerns of a slower US economy in the fourth quarter, hence providing support to precious metals prices, China’s Zhengjin Precious Metals said on Wednesday morning. The broker sees near-term support for the spot gold price at $1,130 per oz and resistance at $1,170.
Last week, economists at the New York Federal Reserve estimated US GDP growth of 1.8% in the fourth quarter of this year and first quarter of next year, while the Atlanta Federal Reserve Bank’s latest forecast for fourth quarter’s GDP growth was at 2.5%.
The forecast growths slow from the US final third quarter GDP growth of 3.5%.
In currencies, the US dollar index was recently at 102.99, down 0.02%.
In equities, the Shanghai Composite fell 0.07% to 3,112.34 so far on Wednesday.
In the other precious metals, the spot silver price increased $0.26 to $15.95/16.01 per oz. Platinum gained $16 to $904/909 per oz, and palladium jumped $21 to $674/679 per oz.
On the Shanghai Futures Exchange, gold for June delivery was recently at 266.85 yuan ($38) per gram, and the June silver was at 4,056 yuan per kg.
(Editing by Kyle Docherty)
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понедельник, 26 декабря 2016 г.
Gold supported by expectations of slower US growth in Q4
The spot gold price posted slight gains during Asian trading hours on Tuesday December 27 amid expectations of a slowdown in the US economy during the fourth quarter of this year.
The spot gold price was recently quoted at $1,137.10/1,137.40 per oz, up $3.30 on the previous close. Trade has ranged from $1,131.70 to $1,138.20 so far.
More economic forecasts are showing that the US economy could slow down in the fourth quarter which could lead to downward pressure on the US dollar, China’s Zhengjin Precious Metals said on Tuesday morning.
The broker is positive on the spot gold price in the near-term, with short-term support seen at $1,120 per oz and resistance at $1,150.
The US’ final third quarter GDP growth was last week revised upwards to 3.5% from 3.2%, but latest forecasts show that the growth is slowing in the fourth quarter of the year.
Last week, economists at the New York Federal Reserve estimated growth of 1.8% in the fourth quarter of this year and first quarter of next year, while the Atlanta Federal Reserve Bank’s latest forecast for fourth quarter GDP growth was at 2.5%.
In data released today, Chinese industrial profits rose 9.4% year-on-year to 6.03 trillion yuan in January-November, which is up 0.8 percentage points from January-October, according to data released by the country’s National Bureau of Statistics on Tuesday.
US data due later today includes the S&P/CS composite-20 HPI, CB consumer confidence and Richmond manufacturing index.
In currencies, the US dollar index rose 0.11% to 103.12 so far on Tuesday.
In other commodities, the Brent crude oil spot price gained 0.25% to $55.16 per barrel recently.
In equities, the Shanghai Composite eased 0.13% to 3,118.61 so far today.
In the other precious metals, the spot silver price increased $0.10 to $15.810/15.830 per oz. Platinum gained $11 to $899/904 per oz, and palladium rose $10 to $664/669 per oz.
On the Shanghai Futures Exchange, gold for June delivery was recently at 265.40 yuan ($38) per gram, and the June silver was at 4,005 yuan per kg.
(Editing by Kyle Docherty)
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воскресенье, 25 декабря 2016 г.
пятница, 23 декабря 2016 г.
Copper price holds steady ahead of holiday weekend
Comex copper prices were little changed on Friday December 23 amid soft volumes and a general winding down of the market ahead of Christmas.
Copper for March delivery on the Comex division of the New York Mercantile Exchange rose 0.2 cents or 0.1% to $2.5015 per pound. Yesterday the contract hit its lowest since mid-November.
Comex gold for February settlement gained $1.60 or 0.1% to $1,132.30 per oz. Trade has ranged from $1,129.50 to $1,133.60. Comex silver for March settlement was recently at $15.850 per oz, down 2.1 cents.
Despite losing ground over the past few weeks, copper has risen roughly 17% this year on hopes of further Chinese stimulus measures and a possible US infrastructure spending bill that would boost demand for metals.
But with the Christmas holiday approaching, profit-taking and a lack of liquidity have resulted in listless trading conditions across commodities. Market participants will return on December 27.
“Right now, we are seeing a mixed tone, but trading conditions are very quiet ahead of the Christmas weekend,” INTL FCStone analyst Edward Meir said.
The global copper market has been roughly balanced this year, according to the International Copper Study Group (ICSG). Copper usage increased 3% or 565,000 tonnes over January-September, putting the market in an 84,000-tonne deficit, the ICSG estimates.
In stocks, LME copper inventories fell for the fourth day in a row on Friday, dropping a net 1,275 tonnes to 334,525 tonnes. But inventories are still up by nearly 100,000 tonnes so far this month following a run of large deliveries from December 12.
On the data side, US new home sales, revised University of Michigan (UoM) consumer sentiment and revised UoM inflation expectations are due later today.
In Europe, Germany’s DAX and France’s CAC-40 were down 0.2% and unchanged respectively, while the dollar softened by 0.1% to 1.0439 against the euro.
In other commodities, light sweet crude (WTI) oil futures on the Nymex dipped by 59 cents or 1.1% to $52.36 per barrel.
(Editing by Mark Shaw)
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Higher US interest rates won’t affect metal markets just yet
Modestly higher interest rates in the USA are not expected to have much of an impact on metal markets, according to industry sources.
And while higher rates could cause issues if they are raised too quickly or too high, this is not an immediate threat, they added.
The Federal Open Market Committee (FOMC) on Wednesday December 14 raised interest rates to a range of 0.5-0.75% from 0.25-0.5%, which was widely anticipated and was largely priced in by commodities and equities.
The metals complex won’t really feel the effects until rates reach at least 2%, Edward Meir, an analyst at New York-based INTL FCStone, said.
“[We have] a long way to go,” he said. “We’ve gone up [0.5 percentage points] in nine years. I may be dead by the time we reach 2%.”
Base metals prices do not seem to have been too fazed by the interest rate decision and, in the weeks leading up to it, didn’t seem to have been affected, Metal Bulletin’s head of research Will Adams said.
“The base metals prices do not seem to have been too focused on the US interest rate decisions. The market has been following its own agenda in recent months. In recent weeks, prices have tended to consolidate and given the gains since late October that is not a surprise,” Adams said in a December 15 report.
“The prices of some industrial metals trended higher after the FOMC meeting, perhaps taking heart from the fact that Fed tightening reflects a stronger US economy,” Capital Economics said in a December 16 report.
But Dane Davis, a commodities research analyst at London-based Barclays Investment Bank, said that there is some risk and that a stronger dollar could be a headwind.
“In the short term, particularly for copper, higher rates will have a negative effect on prices via the stronger US dollar,” Davis said.
The metals’ fundamentals are likely to reassert themselves as time goes on and become the dominant factor in prices, he added.
Unless the Federal Reserve lifts rates too quickly, Davis doesn’t think higher rates will have much of an impact on demand for metals.
“If they came too fast and too strongly, that could cause a contraction in the economy and would affect metal consumption in that way. But it’s a low risk,” Davis said.
But once rates reach 2-3%, Meir said, the entire economy and not just metals will feel the pinch.
“Then it could be serious. Housing will slow down, consumer borrowing will slow down and the dollar will get stronger. As the economy slows, it’ll impact metals demand,” he said.
Higher rates could also cause some struggling companies to default because of an inability to handle more expensive money, according to Central Wire’s president and chief executive, Paul From.
Along with the rising cost of labour and of metals, higher interest rates will simply be another burden that ailing firms will have to bear, he said.
“There are lots of companies now that are just hanging on and, if they face increased costs for anything, it’s going to have an effect,” From said.
But From doesn’t think it’s necessarily a bad thing if vulnerable firms are taken out of the equation.
“Firms that are just hanging on hurts everyone. The weakest are always performing to the lowest levels. We might need to have some bankruptcies on the metal distribution side,” he said.
But an increase of just 0.25 percentage points will have little impact for now, From added.
“Firms will be able to manage. It’s how much further down the road and how much further interest rates have to go before it has a big effect,” he said.
(Editing by Mark Shaw)
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Gold price consolidates above $1,130/oz on year-end bargain-hunting
The gold price was a touch higher on the morning of Friday December 23 in London, finding some support from bargain hunting before the year-end holidays but lacking sufficient momentum for a marked breakthrough.
The dollar index was recently unchanged at 103.08, having recovered from yesterday’s dip to 102.59 after the release of disappointing US data.
The spot gold price was recently indicated at $1,131/1,131.40 per oz, up $2.85 on Thursday’s close.
“The book-squaring nature of moves appears to be the order of the day in pre-Christmas trading,” a trader said.
In the other precious metals, the spot silver price at $15.80/15.830 per oz was up $0.005. Spot platinum was up $2 at $905/910 per oz and spot palladium nudged $5 higher to $656/661 per oz.
“Precious metals remain on a back footing although downward momentum has slowed. Still, there is simply a lack of buying around while broader markets remain buoyant and optimism for 2017 remains high,” Metal Bulletin analyst Will Adams said.
Precious metal prices have come under pressure since the US Federal Reserve announced it would raise interest rates this month.
In data, US new home sales, revised University of Michigan (UoM) consumer sentiment and revised UoM inflation expectations are due later today.
December 26 and 27 are public holidays in the UK for the Christmas celebrations.
(Editing by Mark Shaw)
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Metals prices consolidate in choppy trading
Base metals prices are consolidating after a yesterday’s early weakness attracted buying. This morning, December 23, prices are off an average of 0.4%, nickel prices are down 1%, tin prices are down 0.7% and zinc prices are down 0.5%, while the rest are little changed with three-month copper prices up 0.1% at $5,534 per tonne. Volume has been average with 5,953 lots traded as of 07:10 GMT. Precious metals are little changed this morning with prices ranged between silver prices being off 0.1% and the rest being up 0.2% with spot gold prices at $1,130.90 per oz.
Yesterday, December 22, three-month base metals prices spiked lower but dip buying led to prices closing back up near the opening levels, with lead the only metal holding on to a high degree of its losses, it closed down 1.7%. Copper prices closed up 0.4% at $5,529 per tonne having been down to a low of $5,419.50 per tonne. Precious metals remained under pressure, with prices closing down an average of 0.5%.
This morning in Shanghai, aluminium and nickel are both down 1.1%, the rest of the base metals are up with gains of between 0.1% for tin and 0.9% for zinc, February copper prices are up 0.6% at Rmb 45,080 per tonne. Spot copper in Changjiang is little changed at Rmb 44,760-44,960 per tonne, the spread with the February contract is at an equivalent of $17 per tonne contango and the LME/Shanghai copper arb ratio is at 8.15.
In other metals in China, steel rebar prices are down 3.9%, gold prices are little changed and silver prices are off 0.2%. In international markets, spot crude oil prices are off 0.1% at $54.77 per barrel.
Equities consolidated yesterday with the Euro Stoxx 50 little changed and the Dow closed off 0.1% at 19,919 – the 20,000 level remains elusive, with the high so far being 19,987.63. Italy’s bailout of Monte dei Paschi should provide some relief for markets. In Asia this morning, the Hang Seng is off 0.3%, the CSI 300 is off 0.8%, the ASX 200 is down 0.3% and the Kospi is little changed.
In FX, the dollar index is consolidating in high ground, yesterday’s dip to 102.59 on disappointing US data, attracted buying with the index recently quoted at 103.03. The euro at 1.0441 is up from recent lows, sterling is drifting lower at 1.2288, the yen is consolidating at 117.46, as is the aussie at 0.7215. The yuan at 6.9314 and other emerging market currencies are for the most part consolidating.
Economic data already out shows a slight improvement in Germany’s GfK consumer climate and a 0.4% rise in French consumer spending – data out later includes UK current account, final GDP reading, index of services and revised business inventories, while US data includes new home sales and University of Michigan consumer sentiment and inflation expectations – see table below for more details.
Base metals prices seem to be consolidating as profit-taking and bargain hunting are leading to choppy trading. The overall underlying trends seem to remain bullish, but short term profit-taking ahead of year-end seems to be weighing on prices. The metals holding up the best are aluminium and tin. With the Christmas and New Year holidays ahead we would expect more choppy trading, especially as liquidity is likely to shrink too. Overall, sentiment seem to be bullish for 2017.
Precious metals remain on a back footing although downward momentum has slowed, but there is just a lack of buying around while other broader markets remain buoyant and optimism for 2017 remains high.
| Overnight Performance | ||||
| GMT | 07:11 | +/- | +/- % | Lots |
| Cu | 5534 | 5 | 0.1% | 2765 |
| Al | 1719.5 | -4.5 | -0.3% | 609 |
| Ni | 10680 | -105 | -1.0% | 594 |
| Zn | 2622 | -12 | -0.5% | 1781 |
| Pb | 2138 | 4.5 | 0.2% | 185 |
| Sn | 20845 | -155 | -0.7% | 19 |
| Average | -0.4% | 5,953 | ||
| Gold | 1130.9 | 2.5 | 0.2% | |
| Silver | 15.802 | -0.008 | -0.1% | |
| Platinum | 906.8 | 1.8 | 0.2% | |
| Palladium | 655.6 | 1.6 | 0.2% | |
| Average PM | 0.2% | |||
| SHFE Prices 07:11 GMT | RMB | Change | % Change |
| Cu | 45080 | 270 | 0.6% |
| AL | 12710 | -145 | -1.1% |
| Zn | 21265 | 190 | 0.9% |
| Pb | 18265 | 85 | 0.5% |
| Ni | 90420 | -1000 | -1.1% |
| Sn | 144090 | 200 | 0.1% |
| Average change (base metals) | 0 | 0.0% | |
| Rebar | 2989 | -121 | -3.9% |
| Au | 263.9 | 0.05 | 0.0% |
| Ag | 4006 | -7 | -0.2% |
| Economic Agenda | |||||
| GMT | Country | Data | Actual | Expected | Previous |
| All Day | Japan |
Bank Holiday
|
|||
| 7:00am | Germany |
GfK German Consumer Climate
|
9.90 | 9.80 | 9.80 |
| 7:45am | France |
French Consumer Spending m/m
|
0.4% | 0.1% | 0.8% |
| 9:30am | UK |
Current Account
|
-28.3B | -28.7B | |
| 9:30am | UK |
Final GDP q/q
|
0.5% | 0.5% | |
| 9:30am | UK |
Index of Services 3m/3m
|
0.9% | 0.8% | |
| 9:30am | UK |
Revised Business Investment q/q
|
0.9% | 0.9% | |
| 3:00pm | US |
New Home Sales
|
575K | 563K | |
| 3:00pm | US |
Revised UoM Consumer Sentiment
|
98.20 | 98.00 | |
| 3:00pm | US |
Revised UoM Inflation Expectations
|
2.3% | ||
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четверг, 22 декабря 2016 г.
Gold price finds support from varied US data
The spot gold price managed slight gains during Asian trading hours on Friday December 23 following the release of a range of US data on Thursday.
The spot gold price was recently quoted at $1,130.60/1,130.95 per oz, up $2.42 on the previous close. Trade has ranged from $1,128.40 to $1,131.65 so far.
On Thursday, the US final third quarter GDP growth was revised upwards to 3.5% from 3.2% and core durable goods orders increased 0.5% month-on-month in November, which was better than the forecast of 0.2%. Durable goods orders fell 4.6% month-on-month in November, still better than expectations of a 4.9% drop.
Weekly unemployment claims, however, came in at 275,000 above consensus of 255,000. The November core PCE price index was flat against the forecast of 0.1% and personal spending was at 0.2% below expectations of 0.4%.
CB leading index and personal income were both unchanged in November, and below their forecast of 0.2% and 0.3%, respectively.
“The latest [US] data which has both positive and negative reflects the state of the current US economy. Taking into consideration the outlook for the US economy, future US economic data should trend towards improvement. This could provide some downward pressure for gold and silver,” China’s Zhengjin Precious Metals said late on Thursday.
Recent strong US macroeconomic data and optimism over president-elect Donald Trump’s potential infrastructure spending plans have raised expectations of more interest rate increases in the USA next year. This has also boosted the US dollar and increased appeal of risk assets like equities, while decreasing the attractiveness of haven assets like gold.
In currencies, the US dollar index fell 0.04% to 103.04 so far on Friday.
In other commodities, the Brent crude oil spot price slipped 0.26% to $54.70 per barrel recently.
In equities, the Shanghai Composite eased 0.39% to 3,127.29 so far today.
In the other precious metals, the spot silver price increased $0.03 to $15.830/15.850 per oz. Platinum gained $3 to $906/911 per oz, and palladium rose $5 to $657/662 per oz.
On the Shanghai Futures Exchange, gold for June delivery was recently at 263.80 yuan ($38) per gram, and the June silver was at 4,008 yuan per kg.
(Editing by Kyle Docherty)
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China imports of Philippine laterite ore hit in year of DENR audit
By Ellie Wang
Shanghai 22/12/2016 – The Philippine mining audit, adverse weather conditions and low nickel prices have all led to reduced laterite ore exports to China and encouraged Chinese nickel producers to seek other ways to replenish nickel ore stocks this year.
China produced about 290,000 tonnes of nickel metal in 2016 from laterite ore imported from the Philippines compared with an estimated 355,000 tonnes of nickel metal in 2015, Yang qin, vp of Beijing Dinghejintong Economy and Trade Co, one of China’s top nickel ore trading companies, said at a nickel and stainless steel forum in Beijing in mid-December.
Chinese nickel ore market participants agree with Yan’s data, which equates to an 18% year-on-year fall in nickel metal output from Philippine laterite ore. Chinese nickel ore importers and shipment agencies resident in the Philippines’ nickel ore export ports count shipments independently to verify nickel ore export data.
The Philippines is estimated to export 42.24 million tonnes of nickel ore to China in 2016, according to statistics by Bejing Dinghejintong Economy and Trade Co.
High-grade nickel ore (nickel content above 1.8%) is estimated to account for 1.34 million tonnes, making up 3.17% of total exports, according to Dinghejintong’s data.
China received an estimated 22.14 million tonnes of middle-grade nickel ore (1.3-1.7% nickel content), accounting for 52.14% of total Philippine exports, according to the data.
Meanwhile, low-grade nickel ore (0.6-1.2% nickel content) to China is estimated to account for 18.76 million tonnes, or 44.41% of exports, according to the data.
High-grade laterite ore exports from the Philippines to China have fallen by 6 million tonnes on an annual comparison; middle-grade laterite ore is almost level with 2015’s level for low-grade, Yan said.
Impact factors
Rainy weather, a low nickel price and the Philippines’ mining audit in 2016 are the three main reasons for the lower exports to China.
The Philippines saw the worst weather this year since China started importing laterite ore in 2006, according to laterite ore importers.
Consistent rainy weather means it takes much longer to dig up laterite ore, and makes it harder to load ores at ports in the Philippines as well as to deliver cargoes to China, a major laterite ore importer told Metal Bulletin.
“After at least a month’s delay in nickel ore loading, we were still trying to complete the task in July which should have finished in the first half of 2016,” the importer added.
Besides the bad weather, underperforming nickel prices in the first half of 2016 also weighed on the Philippines’ nickel ore exports.
The London Metal Exchange three-month nickel price touched multi-years low of $7,550 per tonne on Tuesday February 9, and prices continued to be depressed by high global nickel inventory in the first half of 2016.
Laterite ore with 1.5% nickel content, cif China, was assessed at $23-24 per tonne on March 22, 2016, the lowest since Metal Bulletin began recording 1.5% nickel content laterite ore prices.
When the 1.5% nickel content laterite ore price was below $25 per tonne, miners were not willing to dig material out to sell, another laterite ore importer said.
Another driver of reduced Philippine ore exports in 2016 is the Philippines’ mining audit which started on July 8.
In early July 2016, the Philippine president officially ordered an audit of all operating mines and a suspension on new mining projects through a statement made by the department of environment and natural resources (DENR), which was planned to last for one month.
Some bans have been imposed by the DENR, headed by populist President Duterte’s hardline minister of the environment, Regina Lopez.
Then on Tuesday December 13, Lopez said a separate review from an environmental audit of the country’s 41 mines was completed in August and the full results of it would be released in January.
The pending audit results on laterite ore mines and stricter environmental protection requirements by the Philippines’ government will unquestionably continue to put pressure on Philippine laterite ore exports.
The Palawan and the Zambales districts of the Philippines are hubs of nickel ore exports between October and March, when Surigao district is affected by the rainy season, a source familiar with the Philippines said.
However, Palawan and Zambales districts will face strict environmental audits, which will cast shadows on nickel ore exports in the first quarter of 2017, the source added.
Laterite ore prices pushed higher
Already tight laterite ore supply from the Philippines will not ease until April next year, pushing up prices of the nickel raw material, Shi Zhendong, chairman of Global Ferronickel Holding Inc, said at a nickel and chrome forum in China’s Tongxiang city on November 11.
The prices of 1.5% and 1.8% nickel-content nickel ore have continued to rise on very tight supply in the seaborne market, due to the Philippines’ rainy season, as well as low inventory in Chinese ports, Metal Bulletin has learned.
Metal Bulletin assessed laterite ore 1.5% nickel content cif China at $48-52 per tonne on Tuesday December 13, its highest price in 2016, and more than double its lowest price on March 22.
The 1.8% nickel-content laterite ore price cif China was assessed at $64-66 per tonne on the same day, also at its highest in the year and much higher than $39-43 per tonne on March 22.
Chinese nickel pig iron producers as well as laterite ore traders have started seek other channels to replenish the shortage of laterite ore.
Background: Chinese laterite ore customs data
In the January-October 2016 period, China imported a total of 27.12 million tonnes of nickel ore, down 11.95% year-on-year according to Chinese customs data.
China’s nickel ore imports from the Philippines came to 26.19 million tonnes in the first ten months of the year, down 12.58% year-on-year.
After Indonesia implemented a ban on nickel ore exports, the Philippines has become the main source of Chinese nickel ore – Chinese imports of ores from the Philippines accounted for 97% of total imports in 2015 and 2016.
But Chinese customs data has been known to confuse wet tonnes with dry tonnes when counting laterite ore imports, causing frequent delays in customs clearance, which affects how markets participants observe nickel ore import volumes. This has prompted some Chinese laterite ore importers and shipping agencies to calculate import statistics themselves to monitor the laterite ore market more clearly and closely.
See also:
IN DEPTH: What do the Philippines’ mine suspensions mean for nickel prices?
Nickel prices soar as Philippine president tells miners to ‘follow rules or shut down’
CHINA LATERITE ORE SNAPSHOT: Prices rise again on tight availability in seaborne, spot markets
Middle-grade laterite nickel ore price continues to surge on tight supply
Philippines’ rainy season pushes up laterite ore price
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Spot gold price trades flat in holiday-thinned conditions
Gold was treading water in thin trading conditions in London on Thursday December 22 – prices are stuck around $1,130 per oz while many investors are sidelined as the end of the year approaches.
The spot gold price was recently indicated at $1,130.25/1,130.45 per oz, down $0.60 on Wednesday’s close.
“With Christmas only a few days away we expect business and liquidity to further dry up into today and tomorrow and remain quiet through to the New Year,” MKS said in a note.
The market may pick up in the first quarter of 2017, however, Metal Bulletin analyst Boris Mikanikrezai said.
“Investors may continue to remove their bullish bets to take advantage of positive global risk sentiment and lower volatility across risk asset classes. But the level of complacency in financial markets may take some participants by surprise early next year, which may trigger a strong rebound,” he said.
In data, core durable goods orders, the final GDP, unemployment claims, the core PCE price index, personal spending, the CB leading index and personal income are due from the USA later today.
The dollar index was last at 103.01, down 0.03%.
The spot silver price at $15.855/15.875 per oz was little changed, while platinum at $910/915 per oz was $1 higher and palladium was unchanged at $653/658 per oz.
(Editing by Mark Shaw)
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среда, 21 декабря 2016 г.
Metals unlikely to shine as profit-taking remains the driving force
- Base metals continue their consolidation while precious metals prove more resilient on stronger risk aversion.
- Selling pressure across base metals may continue in coming days on further profit-taking amid a muted data flow.
- Precious metals may not be ready to rally yet but a resurgence of risk aversion early next year could prompt some investors to re-engage on the long side.
This morning, base metals on the LME are showing marked losses amid stronger volumes, with zinc, selling off 2%, being the weakest performer. Long liquidation continues across the complex on the back of dollar strength and stronger risk aversion. Precious metals are generally flat, reflecting an unwillingness from investors to rebuild long positioning as a result of strong downward momentum in preceding trading sessions.
This follows on from a generally negative day, yesterday, December 21, when base metals weakened by an average of 0.5%, with nickel (-1.1%) being the worst performer, and precious metals dropped an average of 0.6, with palladium (-1.1%) falling the most in its complex.
This morning, base metals on the SHFE are trading on a weaker foot, with the complex down 1.3% on average. Zinc (-2.3%) performs the weakest while aluminium (+0.3%) is the only metal in positive territory.
Bonds – The US government bond market strengthened slightly on Wednesday, with the 10-year US bond yield closing to 2.53%, down from a recent peak of 2.60% established last week. This reflected a moderate decrease in risk appetite on the back of growing political tensions between the US and China after President-elect Trump decided to choose Navarro, a China hawk, to run the National Trade Council.
Stocks – Looking at equities this morning, Asian equities are generally consolidating. Apart from the CSI 300 (+0.01%) broadly flat, the Hong Kong Sand Index (-0.78%), the Kospi (-0.11%) and the Nikkei 225 (-0.09%) are all trending lower. Broad equities were slightly weaker yesterday despite a fall in volatility. Most European equities posted losses, with the Euro Stoxx closing down 0.26 percent at 3,271. US equities consolidated a little due to a lack of sustained upward momentum after reaching record highs earlier in the week. The Dow Jones closed down 0.16% at 19,942.
FX – The dollar is little changed today, with the DXY currently trading at 102.96, after consolidating yesterday due to stronger risk aversion. The yuan is slightly weaker today after being stronger in the first half of the week. The dollar is likely to continue to be highly influenced by global risk sentiment.
In terms of the day ahead, the economic calendar is fairly busy. In Europe, economic data released earlier this morning showed a stronger-than-expected pick-up in German import prices in November. Investors will now focus on Italian retail sales for October while the ECB is due to release its Economic Bulletin. In the US, investors will pay a particular attention to the release of the final Q3 GDP reading. The data flow is likely to exacerbate volatility in the metals markets, especially given poorer liquidity conditions as the year-end nears.
Near-term outlook:
Base metals are likely to witness further selling pressure in the coming days because traders may reduce their overstretched long positioning built in previous months as the year-end approaches. Although the data flow may be muted until the end of the year, selling pressure across the complex could be exacerbated by low liquidity conditions. From a tactical perspective, we prefer nickel over tin.
Precious metals are not ready to shine until the end of the year, we feel. Investors may continue to remove their bullish bets to take advantage of positive global risk sentiment and lower volatility across risk asset classes. But the level of complacency in the financial markets may take some participants by surprise early next year, which may trigger a strong rebound across the complex.
| Overnight Performance | ||||
| GMT | 06:41 | +/- | +/- % | Lots |
| Cu | 5461 | -44.5 | -0.8% | 3834 |
| Al | 1717.5 | -9.5 | -0.6% | 594 |
| Ni | 10680 | -140 | -1.3% | 1686 |
| Zn | 2568 | -51.5 | -2.0% | 1890 |
| Pb | 2145 | -25.5 | -1.2% | 294 |
| Sn | 20910 | -35 | -0.2% | 14 |
| Average | -1.0% | 8,312 | ||
| Gold | 1130.49 | -0.36 | 0.0% | |
| Silver | 15.879 | -0.051 | -0.3% | |
| Platinum | 912.9 | 0.9 | 0.1% | |
| Palladium | 656.5 | 0.5 | 0.1% | |
| Average PM | 0.0% | |||
| SHFE Prices 06:41 GMT | RMB | Change | % Change |
| Cu | 44550 | -590 | -1.3% |
| AL | 12825 | 50 | 0.4% |
| Zn | 20870 | -425 | -2.0% |
| Pb | 18095 | -295 | -1.6% |
| Ni | 90560 | -2170 | -2.3% |
| Sn | 143550 | -940 | -0.7% |
| Average change (base metals) | -1.3% | ||
| Rebar | 3074 | -84 | -2.7% |
| Au | 263 | -0.55 | -0.2% |
| Ag | 3980 | -15 | -0.4% |
| Economic Agenda | |||||
| GMT | Country | Data | Actual | Expected | Previous |
| 7:00am | EU | German Import Prices m/m | 0.7% | 0.2% | 0.9% |
| 9:00am | EU | ECB Economic Bulletin | |||
| 10:00am | EU | Italian Retail Sales m/m | 0.4% | -0.6% | |
| 1:30pm | US | Core Durable Goods Orders m/m | 0.2% | 0.8% | |
| 1:30pm | US | Final GDP q/q | 3.3% | 3.2% | |
| 1:30pm | US | Unemployment Claims | 255K | 254K | |
| 1:30pm | US | Durable Goods Orders m/m | -4.9% | 4.6% | |
| 1:30pm | US | Final GDP Price Index q/q | 1.4% | 1.4% | |
| 2:00pm | US | HPI m/m | 0.4% | 0.6% | |
| 3:00pm | US | Core PCE Price Index m/m | 0.1% | 0.1% | |
| 3:00pm | US | Personal Spending m/m | 0.4% | 0.3% | |
| 3:00pm | US | CB Leading Index m/m | 0.2% | 0.1% | |
| 3:00pm | US | Personal Income m/m | 0.3% | 0.6% | |
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