Chart Pattern Guide Lines

Regardless of what you trade this chart pattern sheet might assist your trading. However it is only part of your trading plan…You need to know how much to buy or sell…when to exit with a loss or profit…and follow your plan with discipline…

US Mint screws up with the rise in zinc price

The price value of zinc exceeded the highest value point; which was in the year 2009, in the first better half of this year. The main reason behind this unexpected rise in the metal is stated to be the increase of global demand over the global production. The squeeze further tightens as the US Mint boosts its production to 7.5 billion pennies this year, which is a 14 percent increase and will require more than 18,000 metric tons of zinc for the production.

Zinc has grown to become an essential element in our day to day life, and is being used in manufacturing most of the commodities starting from coins to sunscreen, where as in the US economy, the price of this metal is climbing up. The new production of the metal is at the  moment is not possible as many of the old mines have been shut down and hence the global manufacturing gains momentum. All the plannings of US Mint to cut the cost of production by increasing productivity, has been shattered by the rise in the zinc price, a former director of  the US Mint, Philip Diehl.

Diehl also stated that, even though the Mint could be made efficient, it could only get that far, the officials have come to the maximum limit as they could. He further stated that, as long as the price of raw material continues to go up nothing could be done to decrease the production cost.

The price of zinc has risen up to 2,265 dollars per ton this year in the London Metal exchange, whereas the global demand for zinc has increased to 248,000 tons.

US F-22 Jets Intercept 6 Russian Warplanes 55 Miles Off The Alaskan Coast

Yesterday it was the UK which scrambled a squadron of Typhoon jets when two Russian Tu-95 "Bear" Bombers had gotten too close to its shores, even if still located in international space. Then overnight, none other than the US did the same when two F-22 fighter jets intercepted six Russian military airplanes just over 50 miles away from the western coast of Alaska, military officials said Friday, among which identified as two IL-78 refueling tankers, two Mig-31 fighter jets and the same two "Bear" long-range bombers, which are known to carry tactical ICBMs with nuclear warheads among their arsenal.

According to the AP, they looped south and returned to their base in Russia after the U.S. jets were scrambled.

Lt. Col. Michael Jazdyk, a spokesman for the North American Aerospace Defense Command, or NORAD, said the U.S. jets intercepted the planes about 55 nautical miles from the Alaskan coast at about 7 p.m. Pacific time Wednesday.

Additionally, at about 1:30 a.m. Thursday, two Canadian CF-18 fighter jets intercepted two of the long-range bombers about 40 nautical miles off the Canadian coastline in the Beaufort Sea.

In both cases, the Russian planes entered the Air Defense Identification Zone, which extends about 200 miles from the coastline. They did not enter sovereign airspace of the United States or Canada.

Jazdyk said the fighter jets were scrambled “basically to let those aircraft know that we see them, and in case of a threat, to let them know we are there to protect our sovereign airspace.”

In the past five years, jets under NORAD’s command have intercepted more than 50 Russian bombers approaching North American airspace.

So just more training missions by Russia, or is the Kremlin testing out US and UK response capabilities?

And if the US scrambles jets whenever Russian jets fly over international airspace, some 200 miles away from the coastline, how should Russia feel when US, pardon NATO, military jets do combat missions some 20 miles away from the Russian border from the Baltics all the way to Ukraine? Or perhaps the answer is irrelevant, because when it comes to "feeling threatened", only one side of the rational response story matters.

Did The Bottom Just Fall Out Of Commodities?

Global growth expectations... we have a problem. With all eyes focused on BABA, Treasury yields, and Russell 2000 death-crosses. 

The old equally-weighted CRB commodity index has broken down through support to 4-year lows this morning...

Commodities have slipped notably since confirming their own death cross in August.

Record high aluminium premiums lift 2015 cost outlook

* European duty-paid spot premiums at record $460-480/T

* Shorter-term supply contracts seen for 2015

* Strong industrial demand, supply cutbacks tighten market

 

Aluminium supply contracts for consumers in Europe are likely to almost double next year as spot market premiums - the cost to get metal immediately - rise to record highs on rising demand and supply cutbacks.

 

Premiums, paid over the London Metal Exchange (LME) cash prices , have lurched higher in September to fresh record highs of $460-480 a tonne for duty-paid material in Rotterdam, from $450-460 last month.

 

Premiums have risen more than 60 percent since the beginning of the year, due to a combination of rising demand and some supply cutbacks from Western producers.

 

Traders said uncertainty about the outlook for premiums is likely to prompt consumers to push for quarterly contracts with producers rather than locking-in annual supply deals.

 

"We're expecting that customers will have to pay close to current premium levels. If you compare it to last year, you could still do deals at around half the cost," a physical aluminium trader said.

 

"A lot of people think premiums are at their peak and you won't want to fix at those levels for a year," he said.

 

Last year, premiums were agreed at around $250-280 a tonne, with consumers favouring shorter-term deals due to uncertainty about the outlook for premiums.

 

Yearly negotiations are set to begin in late October during LME Week, an annual gathering in London of the global mining community, but traders said contracts are unlikely to be concluded until at least November.

 

Supporting the outlook for premiums in Europe, some fourth quarter premiums in Japan were agreed at record highs of $420, and in the U.S. Midwest premiums are also trading at record highs of 21 cents/lb. 

The LME <0388.HK> last week announced a slight delay to the launch of its aluminium premium contract to the second quarter of next year. The exchange hopes the contract will appeal to investors wanting to lock in future premiums, which have been partly inflated by backlogs at LME-registered warehouses.

 

 

TIGHTENING

 

After years of chronic oversupply, the aluminium market is beginning to tighten as Western producers cut production to battle rising costs, Indonesia bans bauxite ore exports and demand for aluminium rises, particularly from U.S. auto makers.

 

A Reuters poll in July showed analysts expect the aluminium market to slip into a 444,000 tonne deficit in 2015, its first deficit in nine years. 

 

Overproduction in China and historically high inventories in LME-registered warehouses, however, will put a cap on further price rises, traders said.

 

Estimates of aluminium inventory outside China are at around 12 million tonnes. In LME-registered warehouses alone, stocks amount to nearly 5 million tonnes, although they have fallen by around 10 percent since the beginning of the year.

 

"A lot of aluminium is going out of LME warehouses but it's not going to the market as they are going into cheaper and unregulated warehouses," a second aluminium trader said.

 

LME warehouse owners increase revenues by concentrating metal in individual locations, where consumers can face queues of up to a year and a half to get hold of it and the aluminium incurs rental charges during the wait.

 

In addition, vast amounts of metal is locked in financing deals, which involve investors borrowing money at low rates to buy physical aluminium, striking a warehouse deal to store it cheaply and taking advantage of the market's contango structure to sell it forward immediately at a profit.

 

The aluminium cash contract is trading at a $36.75 discount to three-month prices, compared with a $3.25 premium in late August, which was its highest premium since December 2012. 

 

HSBC raises copper price forecast, sees rosy long-term outlook for the red metal

In its latest published report, HSBC has raised the copper price forecast from the earlier $2.95 per lb to $3.20 per lb. The report states that copper’s long term prospects look extremely bullish.

Global Head of Metals & Mining Equity Research Andrew Keen notes that the supply will outpace copper demand in 2015, but things are likely to change from 2016 onwards. The global copper market will most likely turn deficit starting 2016 onwards. The bank predicts a cyclical peak for the red metal in 2017. The prices may surge as high as $3.90 per lb in 2017.

The supply of copper from Chinese domestic mines will remain subdued. The report cites that China accounts for nearly 44% of the global copper demand, but the contribution of domestic mines in the country is only 9% of the global supply. The country faces severe shortage of quality copper reserves. The huge imbalance between supply and demand in China will impact the copper prices hugely. This will also trigger copper mine investments in the country.

Meanwhile, the 3-month price of copper rose 0.5 percent on the LME to $6,835 per metric ton, snapping its two day fall. The cash price of primary copper too increased by 0.4 percent on the LME to $6,856 per metric ton.

Global zinc deficit at 248 kt Jan-Jul 2014

The International Lead and Zinc Study Group (ILZSG) has released the preliminary data for world Zinc supply and demand during the initial seven-month period of the current year. The provisional data indicates that the global zinc production has grown by almost 2% year-on-year during January to July this year.

According to ILZSG, the world market for refined zinc was in deficit by 248 kt during the first seven months of the year. The total reported stock levels declined by 291 kt during the same period.

The higher mine output from China, Mexico and the US contributed to the 3% year-on-year growth in global Zinc mine supply. On the other hand, the mine supply from Canada, Ireland and Peru declined during the quarter.

The global refined zinc metal production has increased by 4.1% during the period. This was primarily on account of increased production in China, Italy, the Republic of Korea, Norway and Poland.

The global demand for refined zinc metal rose 7.7% during the seven-month period. The apparent usage of refined metal by China and the US increased 13.8% and 8.7% respectively. The refined zinc metal usage remained flat in the Europe.

ILZSG statistics indicate that the zinc mine production during January to July this year totaled 7,713,000 tonnes as against 7,538,000 tonnes during the same period in 2013. The global refined zinc metal production during the period totaled 7,684,000 tonnes during Jan-Jul ’14 as against 7,383,000 tonnes in 2013. The apparent zinc usage totaled 7,932,000 tonnes during the initial seven-month period in 2014, higher from 7,368,000 tonnes during corresponding period in 2013.