The base metals were mixed yesterday, copper and lead climbed 0.5 and 0.7 percent respectively, with copper supported by some significant cutback news from Glencore, while the rest were lower between 0.4 percent for tin and 1.9 percent for nickel. This morning the metals remain mixed, with average losses of 0.2 percent, with tin off 0.7 percent, lead off 0.3 percent, while the rest are little changed. Copper is at $5,140 and aluminium is at $1,600.
Precious metals were for the most part drifting lower yesterday as they continued to consolidate and that remains the case this morning with the precious metals complex up an average of 0.2 percent with gold at $1,120.90.
The main news out this morning is the drop in Chinese trade data where imports fell 14.3 percent in August in yuan-denominated terms and exports fell 6.1 percent. China’s copper imports totalled 350,000 tonnes in August, up just 2.9 percent from July, which was disappointing given the arbitrage window was open, but the open arb window did encourage a pick-up in imports for copper concentrate that climbed 18.6 percent. So although at face value the refined number is not great, the pick-up in concentrates is bullish, as with disruptions to mine supply on the up, a tighter concentrate market will feed through to the refined end of market. Exports of aluminium have dropped slightly, off 5.6 percent, to 340,000 tonnes.
In Shanghai, copper and aluminium are up around 0.3 percent, the rest are lower with zinc, lead and nickel off around 1.3 percent and tin is down 0.2 percent. Spot copper in Changjiang is up 0.4 percent at Rmb 39,500-39,620, the backwardation with the futures is at an equivalent of $37 per tonne and the LME/Shanghai copper arb window remains open with the ratio at 7.66.
In other metals in China, gold is off 0.1 percent, silver is off 0.5 percent, steel rebar is down 0.1 percent and iron ore remains firm at around $56.90.
Equities – the Euro Stoxx 50 climbed 0.6 percent yesterday, this morning Asian markets are mixed with the Nikkei off 2.3 percent, not helped by the stronger yen, the Hang Seng is up 0.7 percent, the CSI 300 is off 0.3 percent, the ASX 200 is up 1.3 percent and the Kospi is down 0.2 percent.
Currencies – the dollar index is dipping, last at 95.83, the euro is recovering at 1.1213, the yen is firm at 119.38, the aussie is trying to get some lift, last at 0.6962, as is sterling at 1.5352 and the rouble is weak at 68.54, as are the yuan at 6.4640, the real, rupiah and rand.
The economic agenda is busy, data already out showed Japan continues to struggle, China’s trade data remained cause for concern, but somewhat supportive for copper and aluminium, later we get German and French trade balances, EU revised GDP and US data includes the NFIB small business index, labor market conditions index and consumer credit – see table below for more details.
The base metals have struggled to extend last week’s rebounds and prices are either drifting lower, or consolidating. Sentiment remains poor and in that environment consumers seem in no hurry to restock and investors seem to be giving the metals a wide berth. As such, we would not be surprised to see prices edge lower, although a weaker dollar may provide a cushion.
The precious metals are also struggling to build on the August rallies with prices drifting lower as support is tested. Although we feel the precious metals are oversold, especially the industrial precious metals, investors’ appetite for the metals remains weak. Gold is in the same boat, but it may be thrown a life-line if investors start to get more concerned about the contagion from China and the impact that has on emerging market economies and currencies.
| BST | 06:35 | +/- | +/- % | Lots |
| Cu | 5,140 | 4.5 | 0.1% | 1339 |
| Al | 1600 | 2 | 0.1% | 455 |
| Ni | 9695 | -10 | -0.1% | 438 |
| Zn | 1767.5 | -2.5 | -0.1% | 800 |
| Pb | 1670 | -5 | -0.3% | 77 |
| Sn | 14840 | -110 | -0.7% | 3 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | -0.2% | 3,112 | ||
| Gold | 1120.9 | 0.9 | 0.1% | |
| Silver | 14.49 | -0.02 | -0.1% | |
| Platinum | 989.7 | 4.7 | 0.5% | |
| Palladium | 581.5 | 2.5 | 0.4% | |
| Average PM | 0.2% | |||
| SHFE Prices 7:00 BST | Change | % Change | |
| Cu | 39380 | 120 | 0.3% |
| AL | 11890 | 25 | 0.2% |
| Zn | 14590 | -165 | -1.1% |
| Pb | 13140 | -200 | -1.5% |
| Ni | 75840 | -1020 | -1.3% |
| Sn | 101390 | -220 | -0.2% |
| Average change (base metals) | 236.5 | -0.6% | |
| Rebar | 1923 | -2 | -0.1% |
| Au | 232.5 | -0.3 | -0.1% |
| Ag | 3312 | -15 | -0.5% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:01am | GBP | BRC Retail Sales Monitor y/y | -1.0% | 1.2% | |
| 12:50am | JPY | Current Account | 1.32T | 1.25T | 1.30T |
| 12:50am | JPY | Final GDP q/q | -0.3% | -0.4% | -0.4% |
| 12:50am | JPY | Bank Lending y/y | 2.7% | 2.6% | |
| 12:50am | JPY | Final GDP Price Index y/y | 1.5% | 1.6% | 1.6% |
| 4:04am | CNY | Trade Balance | 60.2B | 48.6B | 43.0B |
| 4:45am | JPY | 30-y Bond Auction | 1.41|3.1 | 1.44|3.3 | |
| 6:00am | JPY | Economy Watchers Sentiment | 49.3 | 52.1 | 51.6 |
| 7:00am | EUR | German Trade Balance | 21.8B | 22.0B | |
| 7:45am | EUR | French Gov Budget Balance | -58.5B | ||
| 7:45am | EUR | French Trade Balance | -3.2B | -2.7B | |
| 10:00am | EUR | Revised GDP q/q | 0.3% | 0.3% | |
| Tentative | GBP | 30-y Bond Auction | 2.73|1.9 | ||
| 11:00am | USD | NFIB Small Business Index | 96 | 95.4 | |
| 3:00pm | USD | Labor Market Conditions Index m/m | 1.1 | ||
| 8:00pm | USD | Consumer Credit m/m | 18.4B | 20.7B | |
The post Markets wince at Chinese trade data but data supportive for copper and aluminium appeared first on The Bullion Desk.
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