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What's Moving the Market?
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20, -Ju-y
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A gradual price shift south characterised early morning trade on the London
Metal Exchange base metal complex, with the bulk of the complex making
perceptible losses. An LME ring trader spoke to Platts and said that he
expects a day of fairly thin trade ahead of the weekend given the fact that
the US is not at work today due to July 4 celebrations. "Lots of people in the
US will be closed today and I expect we won't see that much activity," he
said. "There has been a bit of a drift down this morning but very small
volumes have been traded." The trader also said that all metals in the complex
continue to have high stock levels and, as such, were unlikely to feel much of
an effect from fundamental news such as the ongoing miners strikes in Peru.
Union leaders in Peru have said that the strike, which began on Monday over
earnings from retirement plans and has been reported to involve around 30,000
workers, is likely to carry on for 15 days.
Basemetals.com analyst William Adams said that copper's recent rapid increase
in price had had an inverse effect on the laggers of the complex. "The spike
higher in copper on Wednesday seems to have had an equal and opposite reaction
in some of the other metals with lead, zinc and nickel all breaking recent
support levels to extend their down trends," he said. "It almost looked as
though shorts in those metals took pre-emptive action to deter bargain hunters
from buying the laggards which could have prompted short covering rallies.
However, these metals now look increasingly oversold and unless stocks start
to fall by meaningful amounts there is probably little to trigger a rebound.
That said, the strikes in Peru are not just about copper, Peru is also a large
producer of zinc, lead and tin." Copper slid down from yesterday's spike in
early trade, losing $100 to be seen at $8,555/mt at 0853 GMT. Fellow
bellwether aluminium came off by $15 bid at $3,169/mt.
The trader added that the beginning of the new quarter had not seen any great
influx of fund money entering the market. "There's not been so much cash
coming into the market at the beginning of the quarter from the indicies. Lead
and zinc have been falling but otherwise there has been a bit of fund money
going into copper and aluminium," he said. "The people who are in the indexes
are holding their money there but there are some funds who are looking at
metals individually." Elsewhere on the complex lead lost $59 from the end of
Thursday's session, bid at $1,551/mt and tin also followed the downward trend,
dipping $350 to be seen at $22,500/mt. Zinc lost $22, bid at $1,763/mt and
nickel held steady from Thursday's close at $20,850/mt. Standard alloy was
down $10 at $2,660/mt and North American alloy, untraded at Thursday's close,
was bid down $10 at $2,770/mt. The trader concluded: "It looks like things
will drift down. If there is a massive increase on the oil side that might
pick things up but I doubt it will happen."
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.
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| 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. |
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