The correction in base metals prices continues

Base metals prices have remained under pressure this morning, December 20, with prices down an average of 0.5 percent, nickel is bucking the trend with a 0.7% gain, while the rest are down between 0.2% for copper and aluminium and 1.6% for lead. Three-month copper prices are at $5,497 per tonne. Volume has been average with 6,302 lots traded as of 06:24 GMT. Precious metals are down across the board too this morning, with spot gold prices off 0.2% at $1,135.68 per oz, platinum prices are down 0.3%, silver prices are off 0.5% and palladium prices are down 0.9%.

The weakness in the base metals this morning, follows on from some hefty losses yesterday, December 19, where three-month prices were down an average of 2.1%, led by a 4.4% fall in zinc prices and 2.5% losses in nickel and lead prices, while copper prices dropped 2.4% to $5,505 per tonne. Precious metals were for the most part weaker yesterday, prices struggled to hold on to initial gains, with the complex closing down an average of 0.8%, although spot gold prices did manage to close up 0.3% at $1,138.35 per oz.

In Shanghai this morning, the base metals have played catch-up with yesterday’s weaker performance on the LME. Prices are down an average of 3.5% as of 06:34 GMT,  led by a 6.2% drop in lead prices, with zinc prices down 5.7%, 3% losses in copper, with the February contract at Rmb 44,690 per tonne, nickel and tin prices are down around 2.6% and aluminium prices are off 1.1%. Spot copper prices in Changjiang are down 2.3% at Rmb 44,640-44,840 per tonne, the spread with the February contact is at an equivalent of $21 per tonne backwardation and the LME/Shanghai copper arb ratio is at 8.14.

In other metals in China, May iron ore prices are down 1.8%, steel rebar prices are off 3.5%, gold prices are down 0.1% and silver prices are off 1.5%. In international markets, spot Brent crude prices are off 0.5% at $54.77 per barrel.

Equities generally remained upbeat yesterday with the Euro Stoxx 50 little changed, while the Dow closed up 0.2%, at 19,883 – edging ever closer to the 20,000 level. A pick-up in geopolitical tensions seems to be weighing on some markets but not all. The Nikkei is up 0.5%, the Hang Seng is down 0.7%, the CSI 300 is down 1.1%, the ASX200 is up 0.5% and the Kospi is up 0.2%.

In FX, the dollar is looking stronger again with the dollar index at 103.41, the peak on December 15 was at 103.56. Conversely the euro is weak at 1.0375, as are sterling at 1.2387, the yen at 117.89 and the aussie at 0.7251. The yuan is weaker at 6.9508, while other emerging market currencies we follow are little changed, although there is some weakness around.

On the economic agenda there is data on German PPI, the EU current account, UK realised sales and Chinese leading indicators – see table below for more details.

The correction in the base metals prices continues we see this as being driven by profit-taking ahead of year-end. Dips since mid-October have tended to be short-lived, this one may run a bit longer as there are still seven working days left in 2016, but generally we expect the bullish undertone to remain in place so expect good underlying support to be found before too long.

Gold prices are consolidating, but the downward trend dominates and it is too early to say whether support is in place. Indeed with the dollar index looking strong again, gold prices may struggle on the upside. Platinum is following gold’s performance, while silver prices have pushed lower and palladium prices continue to correct November’s gains.

 

Overnight Performance
GMT	06:24	+/-	+/- %	Lots
Cu	5497	-8.5	-0.2%	2179
Al	1706	-3	-0.2%	511
Ni	10970	75	0.7%	1846
Zn	2588.5	-23.5	-0.9%	1275
Pb	2148	-35	-1.6%	426
Sn	20950	-180	-0.9%	65
	Average		-0.5%	6,302
Gold	1135.68	-2.67	-0.2%
Silver	15.9	-0.08	-0.5%
Platinum	912.9	-3.1	-0.3%
Palladium	672	-6	-0.9%
	Average PM		-0.5%

 

SHFE Prices 06:34 GMT	RMB	Change	% Change
Cu	44690	-1400	-3.0%
AL	12605	-135	-1.1%
Zn	20920	-1275	-5.7%
Pb	17980	-1190	-6.2%
Ni	92100	-2510	-2.7%
Sn	143320	-3760	-2.6%
Average change (base metals)	0		-3.5%
Rebar	3137	-115	-3.5%
Au	265.85	-0.2	-0.1%
Ag	4060	-60	-1.5%

 

Economic Agenda
GMT	Country	Data	Actual	Expected	Previous
2:51am	JPY	BOJ Policy Rate	-0.1%	-0.1%	-0.1%
2:51am	JPY	Monetary Policy Statement
6:30am	JPY	BOJ Press Conference
7:00am	German	PPI m/m		0.1%	0.7%
9:00am	EUR	Current Account		24.2B	25.3B
11:00am	GBP	CBI Realized Sales		20	26
2:00pm	CNY	CB Leading Index m/m			0.8%

The post The correction in base metals prices continues appeared first on The Bullion Desk.

from The Bullion Desk http://ift.tt/2hUnm8D
via IFTTT