 |
|
|
|
|
|
Advertisement
|
|
|
Advertisement
|
|
|
Advertisement
|
|
|
|
What's Moving the Market?
| | 
20, -Ju- 0
|
| |
The London Metal Exchange base metals complex retreated during early trading
Thursday, with a lack of "fresh" fund money pouring in to bolster the
industrial metals. A trader with one LME ring dealer told Platts that
Wednesday afternoon saw some strong rallies for all the metals, "but they hit
recent resistances -- copper $5,180, ally 1,680 -- and failed again. Profit
taking took prices lower for the close." He added that overnight there was no
buying out of Asia due to a national holiday and "early London has not seen
any of the fund/commodity trader adviser buying -- the fresh money to be
allocated to commodities -- which is expected. Without that support prices
have drifted." Three-months copper was spot bid by 0925 at $5,035/mt, down $55
from Wednesday's kerb. "In our view, the whole sector will continue tracking
equities at the moment, with macro data in focus," said VTB Capital analyst
Andrey Kryuchenkov.
Kryuchenkov added: "Last night's PMI reading signals a positive reversal in
the world's largest economy and even though we are far from a complete
recovery, this data combined with a positive employment report today would
give investors another excuse not to liquidate their long positions in metals
just yet." Three-months aluminium was seen down $11 at $1,652/mt. The trader
believes that prices are too high at current levels based on fundamentals,
"but it's not just about that. Investment money is ruling these markets and
there's still a huge amount sitting around. However China has its own
fundamentals, which no one can second guess." China's Xiangguang Copper
expects to increase its refined copper output capacity to 400,000 mt/year by
2011 from the current 200,000 mt/year, the producer based in Shandong's
Liaocheng city said Thursday. As prices have rallied more and more producers
are increasing output and restarting mothballed plants.
Three-months nickel was down $230 at $16,270/mt while tin eased $200 at
$14,400/mt. Lead was off $12 at $1,727/mt while zinc eased $25 at $1,570/mt.
Again looking at the influence of hedge funds, the trader said: "If a fund
decides to put an extra 3% of its portfolio into copper that might be millions
of US dollars which in turn relates to 1000's of lots of the red metal." He
added, "I think you have to have a little cynicism and need to be open to the
possibility of conspiracy type theories in these markets. The world financial
system is being propped up -- if left to its own devices it would likely
collapse and result in untold civil breakdown. You have to think that, maybe,
things such as the price of oil are being 'controlled' -- it will not be
allowed to go higher than $75/barrel." By 0950 ICE Brent was spot bid at
$67.89/barrel. The standard alloy contract was seen at $1,440/mt, closing
untraded Wednesday, while North American received no bids in early trade.
This commentary was first published in Platts Metals Alert. If you have any feedback about this commentary or want to find out more about Platts Metals products and services, please contact webeditor@platts.com.
|
| | |
| | |
| |
| |
| This content first appears in Platts Metals
Alert. Platts Metals Alert is the metal industry's leading real-time data feed service. It provides continuous breaking Metals news from the editors of Platts Metals Week, a long-term global team of metals specialists dedicated exclusively to metals reporting, 24-hours-a-day. |
|
|  |
|
| |
|
Printer-friendly format