Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of MRW, please enable cookies in your browser

We'll assume we have your consent to use cookies, so you won't need to log in each time you visit our site.
Learn more

LME METALS round-up: 5 October

The final version of purchasing managers’ index for manufacturing in the eurozone, prepared by Markit Economics, improved to 46.1 from a provisional (flash) figure of 46.0.  There were still a lot of things wrong with this figure, notably the indicator was below the critical 50.0 mark for the fourteenth month in a row, but the markets chose to ignore that.

Slightly better than expected European indicators gave metals enough support for prices to hold steady.

Also, the euro was stronger (which tends to entail higher dollar prices) at the beginning of this week after European Commissioner Olli Rehn suggested that Spain was on course to receive support funds for it ailing banks by November.

There was some good news from the US.  The PMI for manufacturing prepared by the Institute for Supply Management rose by 1.9% from August levels to 51.5% in September and so stood above 50% for the first time since May.  But earlier, the Census Bureau reported that new orders for manufactured durable goods fell by 13.2% in August; this had followed three monthly increases, including one of 3.3% in July.

The official PMI for manufacturing in China, published by the National Bureau of Statistics, increased to 49.8 in September from 49.2 in August, but that disappointed the markets.  Earlier the rival manufacturing PMI prepared by the bank HSBC, which focuses more on smaller companies, had risen to 47.9 in September from 47.6 in August.

Earlier Chinese prime minister Wen Jiabao had been reported to be expecting his country’s economy to improve in the coming months, but suggesting that the government would take policy measures if needed.  So perhaps it was the lack of measures before China went off on its holiday this week that disappointed.

Japanese data was mixed.  The official Tankan survey showed business confidence still negative in October, though slightly less so than expected, but suggested that capital expenditure would nevertheless increase by 6.4% this year, more than the 5.5% that had been expected.  Earlier Japanese data noted a 1.3% drop in industrial production in August after a 1% decline in July, with manufacturers expecting the number to slide by 2.9% in September.

In the UK, the British Chamber of Commerce reported that manufacturing sales rose by 3% in the third quarter, after a rise of 9% in the second quarter.

 

Market details

On the London Metal Exchange, copper for delivery in three months was holding at around $8,330 per tonne earlier this week, little changed from $8,238 a week earlier.  Holdings of copper in warehouses approved by the exchange rose to 224,150 tonnes earlier this week from 220,300 tonnes a week earlier.  There were reports of tightness in the nearby positions, especially the first week of October.

Three month aluminium was trading at around $2,130 per tonne earlier this week, against $2,096 a week earlier.  LME stocks stood at 5,059,100 tonnes earlier this week, compared with 5,080,725 tonnes a week earlier.

Three month aluminium alloy eased to around $1,975 per tonne earlier this week, from $1,980 a week earlier; LME stocks eased to 77,780 tonnes from 78,500 tonnes a week earlier.

Three month nickel was trading at around $18,857 per tonne, up from $18,274 a week earlier.  LME stocks rose to 123,858 tonnes, from 122,442 tonnes a week earlier.

Three month zinc was quoted at around $2,122 per tonne earlier this week, unchanged from a week earlier.  LME stocks rose to 995,625 tonnes earlier this week, compared with 976,125 tonnes a week earlier.

Three month lead stood around $2,319 per tonne earlier this week, up from $2,287 a week earlier.  LME stocks stood at 261,975 tonnes earlier this week, down from 277,600 tonnes a week earlier.

Three month tin had risen to around $21,950 per tonne earlier this week, from $21,150 a week earlier.  LME stocks eased to 11,965 tonnes earlier this week from 12,055 tonnes a week earlier.

Steel billet was trading with the three month position at around $365 per tonne earlier this week, down from $370 a week earlier.  LME stocks rose to 52,650 tonnes earlier this week from 49,985 tonnes a week earlier.

Precious metals were still firm. Spot gold bullion traded up to around $1,781.50 per ounce earlier this week, from $1,766.60 a week earlier.  Spot silver rose to $34.96 per ounce from $34.17, while spot platinum rose to $1,674 per ounce from $1,625.

 

Chartists, who plot the prices of various commodities (and securities) on graphs, seek to observe patterns which will help them predict how the various markets are going to behave.  One may have more or less faith in the value of this type of analysis, but it is undeniable that significant numbers of traders follow what the numerous chartists are saying, and frequently act on their opinions.

The following are more or less representative of what the charts are forecasting for the main metals:

  • Copper:support is likely around $8,190 per tonne, while resistance is likely above $8,425.
  • Aluminium: support is likely around $2,075, while resistance was likely above 2,150.
  • Aluminium alloy: support is likely around $1,675, and resistance above $2,330.
  • Nickel: support is likely around $18,200, while resistance is likely above $19,500.
  • Zinc:support is likely around $2,090, while resistance is likely around $2,150.
  • Lead: support is likely around $2,230, while resistance is likely above $2,500.
  • Tin: support is likely around $20,950, while resistance is probable above $22,200.
  • Steel billet: support is likely around $350 per tonne, while resistance is likely above $400.
  • Gold: support is likely around $1,760, while resistance is likely around $1,790.
  • Silver: support is likely around $34.20, while resistance is likely above $34.80.
  • Platinum: support is likely around $1,650, while resistance is likely above $1,690.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.