LONDON (Commodity Online): Chinese and Indian manufacturing data has helped base metals rise this week.
Major economic data this week included the ISM Manufacturing index for August which is forecast to drop to 52.8 from 55.5 in July, while the August reading for ISM prices paid is estimated at 55.3 from 57.5 in the prior month. Construction spending on a month-on-month basis for July is likely to come in at negative 0.5% after gaining 0.1% in June.
India also reported a GDP growth of 8.8 per cent this week driven by the manufacturing sector’s growth. This is also good news for base metals especially copper.
Copper accumulated gains of 2% this week to peak to four-month highs of $7,585, cheered by Chinese manufacturing data. LME Copper inventories narrowed 1,575 tonnes to 398,525 tonnes.
Sumitomo Metal Mining, Japan’s second-biggest smelter, said that its copper production will fall almost 10% below capacity as copper ore mined from Chile to Indonesia will be in short supply for almost five years.
Aluminum for three-month delivery gained 0.4% to $2,067 per tonne this week. LME stockpiles shed 3,125 tonnes to close at 4.44 million tonnes. The metal finds support at $2,028 and faces resistance at 2,070.
Chinese exporters of aluminum products are likely to face higher US tariffs on the US Commerce Department’s tough stance that Beijing provided unfair subsidies to the industry. The additional tariff would be as high as 138%.
Nickel for three-month delivery gained 2.2% to $21,160 per tonne on the LME.
Zinc for delivery within three months soared 2.4% to $2,114 per tonne on the LME. Stockpiles fell by 550 tonnes to close at 622,550 tonnes. The metal finds support at $2,053 and resistance at $2,132.
Lead climbed 1.1% to $2,092 per tonne on the LME in early trading Wednesday. Inventories reduced 650 tonnes to close at 191,500 tonnes Tuesday. The metal finds support at $2,036 and faces resistance at $2,124.
A report that Australia’s economy grew last quarter at its fastest pace in three years also contributed to a near 3 percent Copper rally in New York.
Analysts and traders also pointed to a continuous drop in copper inventories and estimates of a small deficit in the copper market by the end of the year, which they believe will keep prices supported.
The steady fall in copper inventories, which stand at 398,775 tonnes, their lowest since early November 2009, has kept copper resilient in the face of poor data.
Aluminium stocks in LME warehouses have also been falling. They stand at 4.43 million tonnes compared with a record above 4.64 million tonnes in January.
About 70 percent of LME Aluminium stocks are said to be tied up in financing deals, however, which give banks higher returns than they would get in money markets and release cash for producers.
Aluminium, used in transport and packaging, closed at a near two-week high at $2,108 a tonne from $2,058 on Tuesday. Tin ended at $21,450 versus $21,000 and Nickel at $21,050 from $20,700.
(Source: TheStreet)
