What's Moving the Market?
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20y -Ja-ua
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Copper prices moved higher in active London Metal Exchange premarket trade
Tuesday, building on overnight strength in Asia and anticipation of index
reweighting in the coming days. Three-months metal was bid at $3,381/mt at
0950 GMT, up $191 from Monday's evening kerb close, on a turnover of over
4,000 lots on LMEselect. "The index reweighting is about to happen and there's
a bit of positioning ahead of that," said a trader with one LME brokerage. But
with market fundamentals still looking poor, the push higher is likely to be
unsustainable in the longer term, he suggested. "Yes, there's money coming in,
but it's just a short-term thing. The market will turn down again," he said.
"The people who want to sell because they don't believe in the move are
holding back for now to see if they can get a bit more out of it, so it could
get up to $3,500-3,600 before it turns. But then we could see it move a few
hundred dollars rather briskly."
Copper futures prices settled limit up on the Shanghai Futures Exchange for
the second successive day Tuesday, supported by active buying, but local
traders were equally skeptical about the prospects for a lengthy rally. "The
price rise is mostly to do with active speculative buying but I personally
think the price rise is likely to be short-lived as market fundamentals are
still weak," said one, adding that copper consumption in China was likely to
remain slow ahead of the Lunar New Year holiday later this month. The rest of
the complex also moved higher in early trade, with three-months aluminium up
$22.50 at $1,570.50/mt at 0950 GMT. LME stocks continued to move higher,
registering a net 11,875 mt increase to 2,357,100 mt according to Tuesday's
exchange data. Nickel moved back above $13,000/mt, up $375 at $13,225/mt,
while lead was up $31 at $1,151/mt and zinc rose $20 from the previous close
to $1,320/mt.
Tin was bid at $11,650/mt at 0950 GMT, up $150. In industry news, refiner
Singapore Tin Industries looks poised to close after two years of operation,
with all its assets to be offered for sale by tender on January 15, an
official from receiver Ferrier Hodgson told Platts Tuesday. Output at STI was
suspended in the fourth quarter of last year. Whether STI will be sold as a
whole or in parts will depend on the buyers, the official said. Local
consultants Robert Khan, which has been hired to act for the receiver, has
circulated a notice offering a complete 36,000 mt/year capacity tin refinery
"with two melting and crystallization lines, one ingot continuous casting
line, one packing line and ancillary equipment and office furniture and
equipment." North American alloy was bid up $15 at $1,090/mt, while there were
no bids for standard alloy on LMEselect as of 0950 GMT.
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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