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US aluminium hits one month low, copper soars-2017 CHINA(GUANGZHOU) INT'L NON-FERROUS METALS （Copper）EXHIBITION
7/28/2016 有色金属展-铜材展-non-ferrous metals expo |
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Reuters reported that aluminium hit the lowest in a month on Tuesday while zinc and nickel touched one-week lows on market uncertainty ahead of the US central bank meeting and as investors sold to book profits from a recent rally. The US Federal Reserve, which begins its two-day meeting on Tuesday, is expected to keep interest rates unchanged this week, but analysts say some policymakers are likely to argue for a rate hike in the coming months.
Analyst Carsten Menke at Julius Baer in Zurich, said that "These market worries about the Fed meeting are justified. Our economists think markets have become too complacent about the outlook for US monetary policy. After we''ve seen some positive economic data out of the United States, rate hike expectations could be brought forward, which would support the dollar and in turn weigh on metals prices."
Three month aluminium on the London Metal Exchange dropped 0.8 percent to close at $1,592 a tonne, the weakest since June 24. Zinc, the best performing metal on the LME this year, ended down 0.9 percent at $2,229 a tonne, paring losses after touching $2,212, the lowest since July 18. Zinc edged up 0.2 percent on Monday and hit a 14-month peak last week of $2,294.50.
Dee Perera at broker Marex Spectron, said that pre-set sell orders were triggered when prices broke below $2,235 for zinc, which has the most bullish investors of the LME complex.
She said that "This is the biggest speculative long seen in zinc since October 2014."
The report said that analysts were wary of rallies in zinc and nickel that have been fuelled by speculators and expect prices to retreat by the year end.
Nickel finished the day 1.2 percent weaker at $10,350 after surging by about a fifth since June 1 on signs of tighter supply from the Philippines due to heavy rains and an environmental crackdown on miners.
Menke added that "Clearly if prices moved so strongly over a short period of time, you''re vulnerable to short-term correction if sentiment in the whole complex reverses."
LME copper closed 0.6 percent firmer at $4,930 a tonne, rebounding after touching a one-week low of $4,859 and following a 0.4 percent decline on Monday. Some investors are also worried that prices will be pressured by rising copper supply, highlighted when Grupo Mexico''s April-June data showed copper output surging 22.7 percent to 266,071 tons from the same 2015 period. LME lead failed to trade in closing rings and was bid down 0.5 percent at $1,833 a tonne while tin fell 0.6 percent to $17,675. Triland put $1,800 in lead as the next support to watch, and said if that is broken, there could be decent long liquidation.
-2017 CHINA(GUANGZHOU) INT''L NON-FERROUS METALS （Copper）EXHIBITION
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