April 4, 2017
Base metals were little changed in overnight trading amid quiet conditions, absent were Chinese markets which were closed for day two of Tomb Sweeping Festival. Chinese markets will resume on Wednesday April 5th. Declines in copper yesterday followed mixed economic data and disappointing U.S. auto sales.
The three-month copper price recently traded at $5,758 per ton, up $5 inventories declined for the 14th day in a row, down a net 4,025 tons to 279,875 tons. Cancelled warrants were down 2,625 tons to 115,450 tons.
Comex May copper 2.6020 down .0015 May/July .0160-.0165
Three-month aluminum price at $1,945.00 was down $7.00. Stocks fell 14,250 tons to 1,863,050 tons and cancelled warrants were down 18,400 tons to 854,925 tons.
Three-month nickel price at $9,910 was $60 higher. Stocks fell 1,512 tons to 374,964 tons.
Three-month zinc price at $2,719.50 was up $11.50. Inventories were down 475 tons to 370,475 tons.
Three-month lead price at $2,295 $9 higher. Stocks fell 2,850 tons to 181,425 tons.
Three-month tin price was last at $19,945, down $105. Stocks were unchanged.
In addition, tomorrow is the date for April options declarations.
Stock markets around the world are lower. Japan's Nikkei (-0.9%) lagged in Asia, and Spain's IBEX (-1.3%) trails in Europe. The S&P 500 is set to open down 0.2% near 2,358.
US economic data picks up. The trade balance will be released at 8:30 a.m. ET before factory orders and durable-goods orders cross the wires at 10 a.m. ET. The US 10-year yield is higher by 1 basis point at 2.33%.
Gold is at its best level since November. The precious metal trades up 0.4% at $1,259 an ounce, its highest since November 10, two days after President Donald Trump won the election.
DAILY COPPER COMMENT
GENERAL: May copper came under extensive pressure yesterday and extended the slide
overnight which puts May copper down to the lowest price level since March 27th.
In addition to pressure from strength in the dollar and noted weakness in equities,
the copper market is also undermined as a result of news that Indonesia was
allowing exports from Freeport to resume. However, that potentially negative supply
side news is countervailed by predictions of an April 10th strike in Peru. We
also attribute some of the weakness in copper prices this week to softer than
expected US construction spending results as well as the weaker than expected
March new US auto sales results. Apparently an ongoing pattern of noted LME copper
exchange stock declines are being discounted despite the fact that the daily
extractions are becoming significant.
MARKET IDEAS:
As we indicated in the prior day's research output, copper prices look to be
locked into the last month's consolidation range that is bound by $2.5585 and $2.70
but that could also leave the market vulnerable to some additional near term
declines. While some traders viewed US and global economic data on Monday as
indicative of ongoing growth, seeing US new auto sales figures dip should leave
would-be buyers on a back foot. At least in the near term, we can't rule out a
probe down to $2.5875 and perhaps even to $2.5665 in the event of a broad risk-off
event in equities.
TECHNICAL OUTLOOK:
COMEX COPPER (MAY) 04/04/2017: A bearish signal was triggered on a crossover down
in the daily stochastics. Momentum studies trending lower at mid-range could
accelerate a price break if support levels are broken. The close under the 18-day
moving average indicates the intermediate-term trend could be turning down. The
swing indicator gave a moderately negative reading with the close below the 1st
support number. The next downside objective is 2.56. The next area of resistance
is around 2.63 and 2.67, while 1st support hits today at 2.58 and below there at
2.56.
Lme officials
04 Apr 2017
Cash Ask
3M Ask
Cash Bid
3M Bid
Copper
5724.50
5750.00
5724.00
5749.50
Aluminum
1938.00
1949.00
1937.00
1948.00
Nickel
9865.00
9965.00
9860.00
9960.00
Zinc
2704.00
2729.00
2702.00
2728.50
Lead
2275.00
2289.00
2273.00
2288.00
Tin
20035.00
20075.00
20030.00
20050.00
Of Interest:
The Reserve Bank of Australia sounds the alarm. The Reserve Bank of Australia held its key rate at 1.50%, as expected, but warned, "Growth in household borrowing, largely to purchase housing, continues to outpace growth in household income."
Global debt hits an eye-watering $215 trillion. Global debt held by households, governments, financials, and nonfinancial corporates soared by more than $70 trillion over the past decade to a record $215 trillion, or 325% of global gross domestic product, according to data released by the Institute of International Finance.
Britain's former business and trade minister believes trade on a global scale will "deteriorate" rather than improve after Brexit. Sir Vince Cable said the idea that Brexit will free the UK from the shackles of EU trade agreements and allow Britain to trade more with nations around the world are a fallacy.
News Source: Reuters, Bloomberg News, Hightower Report, Base Metals, Barchart
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