LME Metals Report - metalquote
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LME Metals Report
Written by Edward Meir – Commodity Research Group
Tel: 1-203-656-1143 • emeir@edfmancapital.com
WWW.EDFMANCAPITAL.COM
=================================================================================
This commentary was written at 9:30 a.m. on
June 18, 2021 US EST.
Base metals prices continue to decline, although the
trajectory of the selling seems to be leveling off
compared to what we saw earlier in the week and
some complexes (like nickel and lead) are even in
the green. But copper is making fresh lows, not
helped by a 25,000 ton stock uptick on the LME. The
complex is on track to close out its worst weekly
showing since March 2020. We are seeing better
conditions in precious metals. Gold was up by about
$20/ounce earlier and although it has sold off to
unchanged in the last hour, it has nevertheless
received several buy recommendations from leading
banks. Commerzbank reiterated a year-end target of
$2000 on gold and Goldman is also friendly (as are
we). For its part, silver is up $.60 at $26.44, while
platinum and palladium are each up by about
$15/ounce and $40/ounce respectively, after getting
pummeled on Thursday.
In the currency markets, the general dollar index has perked up over the last hour and is headed for its best
week in nearly nine months. The Euro is currently at 1.1870 and on course for its worse week since October
as a dovish ECB remains reluctant to follow the Fed's lead. The yen is just about flat at 110.30 on news that
the Bank of Japan made no changes to its accommodative policy stance at its policy meeting. Sterling is
trading at $1.3850 and headed for a weekly loss of 1.5%, not helped by the most recent COVID figures
showing 11,007 new infections versus 9,055 a day earlier -- the biggest daily rise since February.
Separately, UK May retail sales fell 1.4% m/m (expected 1.6) although they are up 24.6% yr/yr.
Oil prices are down by about $.20/barrel at $70.85 basis WTI, but the complex has been spared the sharp
corrections we have been seeing in base metals. Prices fell slightly on Thursday on remarks from Iran's top
negotiator saying that talks have come closer than ever to an agreement. Meanwhile, Iranian “elections”
take place today, with a hardline candidate (sanctioned by the US no less) expected to assume the
Presidency in what could be a record low turnout.
We think that this week’s selloff in base metals has a lot to do with other variables besides the Fed. Given
the severity and rapidity of the decline, fund liquidation is almost certainly at work. In fact, Reuters cites
Marex research as saying that the net spec long position in LME copper has fallen to 15% of open interest
as of Monday (before the current selloff picked up) compared to 62% in February. CFTC data out later today
should show a significant paring in copper length as well.
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Edward Meir/Commodity Research Group (“CRG) is an independent consultant to E D & F Man Capital Markets Inc. (“MCM ”) focusing on metals commentary. Neither Edward Meir or CRG have a
personal futures trading accounts. The information contained in this material should be construed as market commentary, merely observing economic, political and/or market conditions, and not
intended to refer to any particular trading strategy, or specific trade recommendation, promotional element or quality of services provided by MCM Inc. or E D & F Man Derivatives Products Inc.
(“MDP”). Trading ranges given are not a reason to buy, sell or hold any commodity mentioned. MCM and MDP are not responsible for any redistribution of this material by third parties, or any
trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable but is not guaranteed as to its accuracy.
These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and any trading strategy employed by MCM or MDP. This is not an offer to buy or
sell any derivative. The information and data provided is not tradable and is for indication-only purposes. All references to and discussion of OTC products or swaps are made solely on behalf of
MDP, a member of the NFA and provisionally registered with the CFTC as a Swap Dealer. MDP’s products are designed only for individuals or firms who qualify under CFTC rules as an ECP and
who have been accepted as customers of MDP. The trading of derivatives such as futures, options and OTC products or swaps may not be suitable for all investors. Derivative trading involves
substantial risk of loss, and you should fully understand those risks prior to trading.================================================================================
Two other US micro releases came out on Thursday, but were taken in stride. The Conference Board's
leading economic index increased 1.3% in May (consensus 1.2%) after rising by a revised 1.3% (from 1.6%)
in April. The Philadelphia Fed Survey for June also fell to 30.7 (consensus 30.0) from 31.5 in May.
There are no releases out today.
Out of China, we learned on Thursday that new home prices rose in May at the same pace as in April;
average new home prices in 70 major cities grew by .6% in May, while on a year-over-year basis, new home
prices were up nearly 5%.
In freight developments, the sector is watching developments in the recently reopened southern port of
Yantian in Shenzhen following a temporary closure due to COVID restrictions. Some 160,000 containers are
currently waiting to be cleared for export and delays of up to 16 days are being reported for some vessels.
Companies that have their goods tied up are thought to include Tesla, Home Depot, Walmart, Amazon,
IKEA, Walgreens and Hasbro, among others.
We think we could see some buying set in over the metals group next week as the bottom end of trading
ranges comes within reach in most metals. Copper itself approaches key trend line support at around
$9,000 and so we may have a little more room to run there. We would be wary about tin, as given its thin
liquidity it could be in for further selling. More broadly, it is interesting to see that at least some in the
analyst community are starting to cool off on the metals sector, with one prominent bank saying today that
copper may have indeed peaked for 2021, a far cry from the giddier targets rolled out earlier in the year.
-----------------------------------------
COPPER -- SUPPORT: $9,000 / RESISTANCE: $10,050
We are at $9,169, down $147 and close to our lows for the day. We are trading between $9,150–$9,299.
* Reuters reports that China's copper exports edged up for a third straight month in May to their highest
level since March last year; arb activity is encouraging traders to ship metal overseas, as is weaker
domestic demand. Exports came in at just over 79,000 tons, up 3.4% from April levels and up nearly 70%
y-o-y. For the first 5 months of 2021, China exported 369,403 tons of copper, up 10.5% from a year earlier.
* Copper in Shanghai bonded warehouses rose by 10,300 tons from the previous week to 429,300 tons
on Friday, this according to SMM, the highest level since July 2019. Regular Shanghai inventories show
weekly declines across the board: copper was off by 8,440 tons, zinc was down 6,165 tons, while aluminum
stocks dropped by 1,061 tons
* Fastmarkets reports that copper premiums traded as high as 8.5 cents per lb. in the US, but there is
continued weakness in China and a leveling off in European premiums ahead of an expected summer
slowdown. CIF Shanghai copper premiums were assessed at roughly $20/ton, while cathode premiums
delivered into Germany was indicated at $90/ton. CIF Rotterdam premiums were pegged at about $50/ton.
=========================================================================================================================================
Edward Meir/Commodity Research Group (“CRG) is an independent consultant to E D & F Man Capital Markets Inc. (“MCM ”) focusing on metals commentary. Neither Edward Meir
nor CRG have a personal futures trading accounts. The information contained in this material should be construed as market commentary, merely observing economic, political
and/or market conditions, and not intended to refer to any particular trading strategy, or specific trade recommendation, promotional element or quality of services provided by MCM
Inc. or E D & F Man Derivatives Products Inc. (“MDP”). Trading ranges given are not a reason to buy, sell or hold any commodity mentioned. MCM and MDP are not responsible for
any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from
sources believed to be reliable but is not guaranteed as to its accuracy. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the
viewpoints and any trading strategy employed by MCM or MDP. This is not an offer to buy or sell any derivative. The information and data provided is not tradable and is for
indication-only purposes. All references to and discussion of OTC products or swaps are made solely on behalf of MDP, a member of the NFA and provisionally registered with the
CFTC as a Swap Dealer. MDP’s products are designed only for individuals or firms who qualify under CFTC rules as an ECP and who have been accepted as counterparties of MDP.
The trading of derivatives such as futures, options and OTC products or swaps may not be suitable for all investors. Derivative trading involves substantial risk of loss, and you should
fully understand those risks prior to trading.================================================================================
------------------------------------------
ALUMINUM -- SUPPORT: $2350 / RESISTANCE: $2517
We are at $2375, down $24. We have been trading between $2369–$2409. The backwardation between
cash and July eased from Thursday’s levels and last traded at $10 /ton.
------------------------------------------
ZINC -- SUPPORT: $2750 / RESISTANCE: $3075
We are at $2848, down $63. We have been trading between $2857–$2928; the bottom end of the range on
zinc is #2750, which needs to hold.
------------------------------------------
LEAD -- SUPPORT: $2114 / RESISTANCE: $2235
We are at $2150, up $20. We have been trading between $2121–$2156.
------------------------------------------
NICKEL -- SUPPORT: $16,995 / RESISTANCE: $18,495
We are at $17,215, up $41. We have been trading between $17,180–$17,445.
* Fastmarkets reports that the US government will fund strategies for lithium-ion battery manufacturing
which would eliminate the need for cobalt and nickel from the cathode by the end of the current decade. The
game plan is being developed by the Federal Consortium for Advanced Batteries and includes many other
organizations across the government. “The goal is to reduce US battery manufacturing dependence on
scarce materials, or those controlled by unreliable partners, in order to develop a stronger and more secure
supply chain”, the document notes.
* Meanwhile, production of China’s lithium iron phosphate (LFP) batteries surpassed that of nickel-cobalt-
manganese (NCM) lithium-ion batteries in May for the first time in three years, this according to data from
the China Association of Automobile Manufacturers cited by Fastmarkets. “The increasing market share for
LFP batteries has weighed on cobalt prices of late, while demand for lithium carbonate, a key raw material
in the production of LFP batteries, has surged” Fastmarkets notes.
------------------------------------------
TIN -- SUPPORT: $28,200 / RESISTANCE: $31,850
We are at $29,900, down $700 and on our lows. We have been trading between $29,900–$30,605.
* MSC said that its tin smelting operations will remain suspended until June 28. However, the smelter noted
that “It is not known if further phases of the lockdown will be implemented or whether other measures may
be undertaken by the government [that] may cause further disruption to our operations". Based on the
company's 60,000-ton-per-year production capacity, some 4,600 tons of metal would be lost over a four-
week suspension, Fastmarkets reports.
=========================================================================================================================================
Edward Meir/Commodity Research Group (“CRG) is an independent consultant to E D & F Man Capital Markets Inc. (“MCM ”) focusing on metals commentary. Neither Edward Meir
nor CRG have a personal futures trading accounts. The information contained in this material should be construed as market commentary, merely observing economic, political
and/or market conditions, and not intended to refer to any particular trading strategy, or specific trade recommendation, promotional element or quality of services provided by MCM
Inc. or E D & F Man Derivatives Products Inc. (“MDP”). Trading ranges given are not a reason to buy, sell or hold any commodity mentioned. MCM and MDP are not responsible for
any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from
sources believed to be reliable but is not guaranteed as to its accuracy. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the
viewpoints and any trading strategy employed by MCM or MDP. This is not an offer to buy or sell any derivative. The information and data provided is not tradable and is for
indication-only purposes. All references to and discussion of OTC products or swaps are made solely on behalf of MDP, a member of the NFA and provisionally registered with the
CFTC as a Swap Dealer. MDP’s products are designed only for individuals or firms who qualify under CFTC rules as an ECP and who have been accepted as counterparties of MDP.
The trading of derivatives such as futures, options and OTC products or swaps may not be suitable for all investors. Derivative trading involves substantial risk of loss, and you should
fully understand those risks prior to trading.Base Metals Prices and Forward Curve Snapshot
LME Cash 18-Jun-21 Prev Day Month ago 3M Trend 12M Trend
CU ($/MT) 9,289 9,638 10,376
AL ($/MT) 2,410 2,473 2,448
PB ($/MT) 2,113 2,186 2,221
ZN ($/MT) 2,898 3,013 3,037
NI ($/MT) 17,143 17,619 17,942
SN ($/MT) 32,000 32,660 32,930
LME Frwrds Cash 3-month 15-month 27-month 63-month Curve's shape
CU ($/MT) 9,289 9,256 9,325 9,265 9,004
AL ($/MT) 2,410 2,394 2,401 2,380 2,360
PB ($/MT) 2,113 2,137 2,161 2,184 2,217
ZN ($/MT) 2,898 2,883 2,922 2,883 2,846
NI ($/MT) 17,143 17,310 17,280 17,391 17,770
SN ($/MT) 32,000 30,280 26,855
SHFE Front 1 month 3 month 6 month 9 month 12 month Curve's shape
CU (CNY/T) 67,830 68,140 68,460 68,680 69,050
AL (CNY/T) 18,470 18,435 18,335 18,210 18,365
PB (CNY/T) 15,140 15,275 15,505 15,540 15,730
ZN (CNY/T) 22,105 22,050 21,905 21,765 21,850
NI (CNY/T) 127,970 127,600 126,870 127,580
SN (CNY/T) 203,830 201,870 197,180 199,340 197,030
Base Metals Inventories
Copper Today 1 day ∆ 1 month 6 month Yr Ago 12M Trend
LME (MT) 168,675 24,925 119,025 123,400 243,250
SHFE (MT) 172,527 229,179 74,222 128,131
COMEX (MT) 48,634 -428 56,798 70,547 68,528
GLOBAL(MT) 389,836 24,497 405,002 268,169 439,909
Aluminum Today 1 day ∆ 1 month 6 month Yr Ago 12M Trend
LME (MT) 1,621,325 -7,475 1,765,525 1,367,025 1,610,300
SHFE (MT) 293,074 341,097 212,745 248,462
COMEX (MT) 27,221 0 27,905 41,825 28,477
GLOBAL(MT) 1,941,620 -7,475 2,134,527 1,621,595 1,887,239
Lead Today 1 day ∆ 1 month 6 month Yr Ago 12M Trend
LME (MT) 87,650 -200 104,125 131,950 75,125
SHFE (MT) 116,569 77,220 52,173 19,716
GLOBAL(MT) 204,219 -200 181,345 184,123 94,841
Zinc Today 1 day ∆ 1 month 6 month Yr Ago 12M Trend
LME (MT) 261,325 -2,125 286,375 209,950 124,300
SHFE (MT) 50,417 91,614 41,216 102,253
COMEX (MT) 2,699 0 2,699 448 182
GLOBAL(MT) 314,441 -2,125 380,688 251,614 226,735
Nickel Today 1 day ∆ 1 month 6 month Yr Ago 12M Trend
LME (MT) 238,410 -192 253,368 244,212 233,274
SHFE (MT) 7,751 8,504 19,906 27,869
GLOBAL(MT) 246,161 -192 261,872 264,118 261,143
Source: EDF Man Capital Markets/ BloombergTechnical Profile
18-Jun-21 1 day 1 month ago 3 month ago Yr ago
Volume (3-Mnth/lots)
CU 42,410 37,707 42,175 52,317 36,757
AL 51,261 28,798 40,235 37,260 55,387
PB 12,917 5,943 11,643 10,887 11,038
ZN 30,520 23,908 17,698 23,218 18,935
NI 19,259 17,367 23,061 17,929 18,614
SN 901 436 1,123 292 633
Open Int (3-Mnth/lots)
CU 313,200 312,364 306,358 286,964 310,473
AL 683,353 680,684 698,865 790,983 667,276
PB 112,623 112,136 112,610 105,662 108,520
ZN 255,810 256,409 269,241 191,756 229,431
NI 213,330 212,779 219,810 201,811 277,215
SN 11,127 11,148 11,028 16,173 16,093
Moving Averages & Implied Price Direction
Cash 10 MAV 40 MAV 100 MAV 200 MAV
CU ↓ 9,289 9,795 9,971 9,233 8,217
AL ↔ 2,410 2,460 2,430 2,264 2,079
PB ↔ 2,113 2,165 2,156 2,065 1,988
ZN ↔ 2,898 2,991 2,957 2,840 2,723
NI ↔ 17,143 17,925 17,544 17,363 16,680
SN ↑ 32,000 32,529 31,872 28,767 23,919
Support & Resistance
S1 S2 R1 R2 RSI
CU 9,000 NA 10,050 10,350 31
AL 2,350 2,300 2,517 2,547 42
PB 2,114 2,067 2,235 2,335 44
ZN 2,750 NA 3,075 3,108 35
NI 16,620 NA 18,495 18,750 42
SN 29,100 28,200 31,850 33,600 48
Market Round-up (Data as on 9:30 am GMT)
Today 1 day 1 month 6 month Yr Ago
Gold 1,792 1,860 1,868 1,886 1,725
Silver 26.45 27.81 28.31 25.95 17.51
Platinum 1,076 1,142 1,225 1,043 812
Palladium 2,520 2,834 2,903 2,361 1,888
WTI 70.66 72.15 65.49 49.10 38.84
Brent 72.56 74.39 68.71 52.26 41.51
WTI Inv (mbbl) 467 467 484 500 541
Sterling 1.3894 1.3988 1.4189 1.3523 1.2424
Euro 1.1918 1.1995 1.2222 1.2257 1.1205
CNY 6.44 6.40 6.43 6.54 7.09
Dollar Index 91.94 91.13 89.75 90.02 97.42
Physical Premiums (Aluminium)
Today 1 day 1 month 6 month Yr Ago
US ($/lb) 0.273 0.273 0.263 0.142 0.085
Source: EDF Man Capital Markets/ Bloomberg
JP ($/MT) 170.18 170.18 162.56 119.25 75.55
EU ($/MT) 245.50 245.50 233.00 139.08 107.50You can also read
