Commodity Trade Mantra

All posts under ‘Base Metal Trading’

Zinc Prices Soar Over 45% YtD, Amid Supply Crunch

MMG’s CEO Andrew Michelmore told an investor conference that his management team thinks now is the time to be betting on zinc. A sentiment that he summed up by saying, “The crunch has finally come.” The recent price action supports this bullish sentiment, with zinc prices having risen nearly 45% so far in 2016, largely driven by a number of big mine closures globally.

JPMorgan Corners LME Aluminum Market, Leading To Strange "Price Anomalies"

For some months now there have been large holdings of aluminum warrants, which are a claim to metal stored in warehouses approved by the LME. Currently there is a dominant position holding 50-79% of warrants. “JPMorgan have been doing this on-and-off for a long time. The backwardation (or premium) doesn’t accurately reflect oversupply,” a Reuters source at a commodity trading firm said.

Copper, Nickel and Zinc Won't Be Cheap for Long

A big driver for nickel is the steel market, and this has been relatively bearish. Nickel ore stockpiles in China and elsewhere are still high, but are now being drawn down toward potentially critical levels. There is a bullish argument that we could see the nickel market slip into deficit by as early as mid-2015.

Copper and Aluminum Rally on Supply Deficit

Copper prices have been rebounding as demand for copper expands to a record in China & use in the U.S. climbs to the highest since 2009. Global copper inventories have fallen by almost half this year & are near the lowest since 2008. Aluminum rose to the highest in 18 months as global production trails consumption.

Chinese Headwinds May Diminish LME Zinc Rally

While LME zinc prices have outperformed copper & aluminum this year, do not expect Chinese market for zinc to tighten up in the near term. Domestic zinc supply is set to rise as smelters ramp up production & galvanizers are still sitting on growing stockpiles while demand from construction remains muted.

Zinc or Swim: Do Base Metals Have a Future?

There are several long-term issues that impacted zinc, copper and the other base metals in 2013, and those long-term issues will persist for the foreseeable future – How are the fundamental challenges facing the global base metals markets likely to play out in 2014?

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