By William Adams / January 19, 2018 / www.metalbulletin.com /
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Base metals prices on the London Metal Exchange are stronger across the board this morning, Friday January 19, with the complex up by an average of 0.6%.
Aluminium prices ($2,262 per tonne) saw the biggest increases with a 0.8% gain and lead is the laggard with a 0.4% gain ($2,616 per tonne), while copper prices, at $7,125 per tonne, are up 0.7%.
Volume has been high with 11,182 lots traded as of 7.58am London time.
The precious metals complex is also slightly firmer this morning with prices up by an average of 0.1%, led by a 0.2% rise in platinum prices ($999.50 per oz) while gold prices are up by 0.1% at $1,329.16 per oz - silver and palladium prices are unchanged.
On the Shanghai Futures Exchange today, base metals prices are for the most part stronger with lead prices leading the way with a gain of 1.8%, followed by tin prices that are up by 1.1% and aluminium prices that are up by 1.0%; copper prices are up by just 0.1% at 53,710 yuan ($8,368) per tonne. Zinc prices are 0.3% firmer and nickel prices are off by 0.2%. Spot copper prices in Changjiang are up by 0.2% at 53,550-53,700 yuan per tonne. The LME/Shanghai copper arbitrage ratio has dropped to 7.53 down from 7.65 a week ago.
In other metals in China, iron ore prices are up by 1.6% at 543.50 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices are up by 2.2%, while gold and silver prices are down by 0.5% and 0.8% respectively.
In wider markets, spot Brent crude oil prices remain strong at $69.10 per barrel, the yield on US 10-year treasuries continues to climb - it was recently quoted at 2.63% - and the German 10-year bund yield is at 0.51%.
Equities in Asia are mainly positive today: Kospi (0.18%), Nikkei (0.0.19%), CSI 300 (0.33%), Hang Seng (0.18%), while the ASX 200 is down 0.15%. This follows a mixed performance in western markets on Thursday, where in the United States the Dow Jones closed down by 0.37% at 26,017.81, and in Europe where the Euro Stoxx 50 closed up by 0.23% at 3,620.91.
The dollar index at 92.60 is under downward pressure again. The low in September was at 91.01 and Wednesday's low was at 90.11. So the 2017 downward trend is continuing into 2018. On the back of dollar weakness, the other currencies are stronger: euro (1.2275), sterling (1.3924), yen (110.64) and the Australian dollar (0.8024). The yuan has broken through resistance at 6.4345, it has been as high as 6.4149 this morning, the strongest it has been since December 2015. Most of the emerging currencies we follow are stronger too, which shows a degree of risk-on and confidence.
Data already out this morning shows German PPI rising 0.25, up from 0.15 previously, later there is data on the EU current account UK retail sales, with US data including preliminary University of Michigan consumer sentiment and inflation expectations. In addition, US Federal Open Market Committee member, Randal Quarles is speaking.
The base metals have had to absorb some selling this week, some more than others, but the dips are being bought and follow-through buying is being seen this morning. With prices in high ground there is bound to be more selling around, especially when prices break into new high ground, but the fact prices are generally holding up well suggests underlying sentiment remains bullish.
The precious metals prices are generally strong. Platinum's rally seems to be the strongest of the lot, but it is the one coming off a low base, while palladium's uptrend looks robust, but it is already in high ground. Gold's rally has also been strong and some profit-taking seems to be emerging ahead of the September highs, which were at $1,357.55 per oz. Likewise silver prices have also run into some resistance around the highs seen in October last year. The weaker dollar, firm oil and base metals prices, all suggest hard commodities are in vogue.
| Overnight Performance |
| GMT | 07:58 | +/- | +/- % | Lots |
| Cu | 7,125 | 50.0 | 0.7% | 3,805 |
| Al | 2,262 | 17.5 | 0.8% | 3,292 |
| Ni | 12,530 | 65.0 | 0.5% | 1,775 |
| Zn | 3,396 | 20.5 | 0.6% | 1,426 |
| Pb | 2,616 | 11.5 | 0.4% | 788 |
| Sn | 20,540 | 150.0 | 0.7% | 96 |
| | Average | | 0.6% | 11,182 |
| Gold | 1,329.16 | 1.46 | 0.1% | |
| Silver | 16.91 | 0.00 | 0.0% | |
| Platinum | 999.50 | 1.50 | 0.2% | |
| Palladium | 1,099.00 | 0.00 | 0.0% | |
| | Average PM | | 0.1% | |
| SHFE Prices 08:13 GMT | RMB | Change | % Change |
| Cu | 53,710 | 30 | 0.1% |
| AL | 14,765 | 145 | 1.0% |
| Zn | 26,100 | 90 | 0.3% |
| Pb | 19,570 | 350 | 1.8% |
| Ni | 96,830 | - 190 | -0.2% |
| Sn | 146,050 | 1,630 | 1.1% |
| Average change (base metals) | | | 0.7% |
| Rebar | 3,926.00 | 83.00 | 2.2% |
| Au | 278.35 | - 1.30 | -0.5% |
| Ag | 3,834.00 | - 29.00 | -0.8% |
| Iron Ore (DCE) May'18 | 543.5 | 8.5 | 1.6% |
| Economic calendar |
| GMT | Country | Data | Actual | Expected | Previous |
| 7:00am | Germany | German PPI m/m | 0.2% | 0.2% | 0.1% |
| 9:00am | EU | Current Account | | 31.3B | 30.8B |
| 9:30am | UK | Retail Sales m/m | | -0.8% | 1.1% |
| 3:00pm | US | Prelim UoM Consumer Sentiment | | 97.0 | 95.9 |
| 3:00pm | US | Prelim UoM Inflation Expectations | | | 2.7% |
| 5:15pm | US | FOMC Member Quarles Speaks | | | |