METALS MORNING VIEW 13/11: Most base metals prices firmer, nickel leads the way

Base metals traded on the London Metal Exchange are up across the board by an average of 0.7% this morning, Monday November 13. Nickel prices are leading the way with a 2.3% gain, with tin prices up by 0.7% and three-month copper prices up by 0.5% at $6,828 per tonne, while the rest are up by 0.2%.

Volume has been average with 6,215 lots traded as of 07:00 GMT.

Precious metals prices are up by 0.4% this morning, with spot gold prices up by 0.1% at $1,276.64 per oz, while silver, platinum and palladium prices are up between 0.5-0.6%.

On the Shanghai Futures Exchange today, the base metals complex is broadly higher with gains averaging 0.4%, led by 1% rises in lead and zinc prices. Tin prices are up by 0.4%, copper prices are up by 0.2% at 53,580 yuan ($8,068) per tonne and aluminium and nickel prices are little changed. Spot copper prices in Changjiang are off by 0.2% at 53,340-53,540 yuan per tonne and the LME/Shanghai copper arb ratio stands little changed at 7.85.

In other metals in China, iron ore prices are up by 1.1% to 465 yuan per tonne on the Dalian Commodity Exchange, steel rebar prices on the SHFE are up by 0.5%, while gold and silver prices on the SHFE are both down by 0.5%.

In international markets, spot Brent crude oil prices are down by 0.13% at $63.55 per barrel. The yield on US ten-year treasuries are firmer at 2.39% and the German ten-year bund yield is easier at 0.40%.

Equities in Asia are mixed this morning. While the Hong Kong Hang Seng Index (+0.40%) and the CSI 300 Index (+0.39%) are pushing higher, the Nikkei (-1.32%) is correcting last week’s strength, and the Kospi (-0.5%) and the ASX200 (-0.13%) are both weaker. This follows a weaker tone in the Western markets on Friday where in the United States, the Dow Jones closed down by 0.17% at 23,422.21 and in Europe, where the Euro Stoxx 50 closed down by 0.52% at 3,593.76.

The dollar index is firmer at 94.53 this morning, having dipped to a low of 94.26 on Friday, but the overall trend seems to be a rising one. The euro at 1.1651 is drifting within an overall downward trend, sterling is weaker at 1.3102 on political concerns, as is the Australian dollar at 0.7659, while the yen at 113.41 is firmer.

The economic calendar is relatively quiet today. Japan’s producer price index climbed 3.4% after a reading of 3.1% previously and the country’s machine tool orders continue to trend higher, climbing 49.9% after a previous reading of 45%. Germany’s wholesale price index was flat, after a 0.6% rise previously. Later there is data on the US federal budget balance.

The base metals are on divergent paths: tin is the weakest of the complex; aluminium showed weakness last week, so we should get insight into how bullish underlying support is; the same, albeit it to a lesser extent, is true for nickel; while lead and zinc are working higher again and copper is drifting lower. Overall we expect prices to generally hold up well and we remain bullish of the fundamentals, but prices may have already discounted the present bullishness.

The precious metals are split into two camps: palladium is trading its own bullish fundamentals, while gold, silver and platinum are trading sideways – which suggests good underlying support, but not a particularly bullish environment for gold, given the reduced tension over North Korea and mildly hawkish US Federal Reserve.

Metal Bulletin publishes live futures reports throughout the day, covering major metals exchanges news and prices.

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