The three-month copper price on the London Metal Exchange fell to its cheapest since January 19 to $5,668.50 per tonne during Thursday March 9 morning trading as supply fears eased and more stocks arrived into LME sheds.
Prices of the red metal dropped $86 with strong volumes – more than 9,000 lots – changing hands on LMEselect so far.
Supply fears had helped propel the copper price above $6,200 per tonne last month, but these fears have faded this week. Freeport Indonesia aims to resume copper concentrate production on March 21, according to Reuters.
Meanwhile, there is talk that BHP Billiton is looking to use “contract workers” to resume production should the Escondida dispute continue beyond 30 days, Marex Spectron said in a note.
Adding to the downside is the influx of metal into Asian sheds. Net stocks are up 38,775 tonnes to 327,300 tonnes – the highest since December 29.
More than 130,000 tonnes have arrived since the start of the week.
Still, this was offset somewhat by 14,375 tonnes of freshly cancelled material. Net cancellations are up 8,975 tonnes to 132,475 tonnes.
In the week so far, fresh cancellations have increased by 35,550 tonnes.
Metals fall back after strong start to 2017
• All of the base metals have pared back from the highs noted at the start of the year.
• “The cracks in the commodities rally are appearing in March and forcing structural longs to exit as US dollar headwinds, combined with lack of Chinese demand, building physical stockpiles and macro uncertainty, are forcing even the diehard commodity bulls to re-assess,” Matt France at Marex said.
• Still, France advised to be mindful of any signs of short-covering as the weekend looms and to not be overly aggressive in selling fresh lows.
• The nickel price was at its cheapest since February 1 when it fell to $10,010 per tonne – it has recovered to $10,155 per tonne but is still down 0.20% on the previous close. Stocks are 288 tonnes lower at 385,830 tonnes.
• Nickel prices have come under further pressure as developments in the Philippines suggest that mine shutdowns recently ordered by the country’s Department of Environment and Natural Resources could be delayed or not occur at all.
• Aluminium is holding fairly steady, down $7 at $1,870 per tonne. Stock declines continue to be offset by re-warranting – Net inventories are down 16,750 tonnes to 2,084,800 tonnes and cancelled warrants fell 16,475 tonnes to 786,550 tonnes.
• Zinc is $53 lower at $2,657 per tonne while stocks are 1,325 tonnes lower at 382,525 tonnes. Lead slipped $33 to $2,218 per tonne and stocks increased 675 tonnes to 190,400 tonnes.
• Tin is down $250 at $19,125 per tonne and stocks fell 185 tonnes to 4,845 tonnes.
Data and currency moves
• Chinese CPI data disappointed at 0.8% against a forecast of 1.9%. PPI, however, was at 7.8%, beating expectations of 7.6%.
• The dollar index is 0.01% higher at 102.9.
• Later today, the USA will release its unemployment claims and import prices.
• On Friday, the USA will release its non-farm payroll data – the country is forecast at have added 185,000 last month, down from the previous month’s 227,000. - Fastmarkets.com