No Big Turnround Expected in Aluminum Market.

The longs are not advised to enter the aluminum market, as no big turnround is expected to happen in the aluminum market during October, one CIFCO analyst told SMM in a recent interview. 

“The policy-front action and demand conditions will determine October’s aluminum market”, the analyst said. 

A moderate development of global automobile market will allow for a relatively balanced aluminum market in China as long as the resumption in domestic aluminum industry is at a slow pace, the analyst added.   

Will Zinc Price Rally in October?

Zinc price in China’s domestic market is expected to trend higher in October, an analyst from Shanghai CIFCO Futures predicts in a most recent SMM’s interview. 

Orders at Chinese galvanizers and zinc oxide producers usually grow in Q4, and this will boost demand for zinc ingot, the analyst told SMM. 

“Physical supply is tight now, with spot premiums in east China’s zinc market as high as 200 yuan per tonne”, he said.  

Concern over supply disruptions of zinc ore will continue to lure investors into zinc market, he added. 

-----------------------------------------------------------
China’s zinc exports reached a –year high in August, and most exports went to LME-registered warehouses, Shanghai Metals Market learns.
  

China exported 21,200 tonnes of refined zinc in August, up 28-fold YoY, bringing net imports only 37,000 tonnes, according to China Customs.

  

Growing pressures in bonded-zone inventories, Qingdao’s financing fraud, high storage charges and cash flow problems all promoted export activities since June, especially in bonded zones, SMM understands.

BNP Paribas sees Copper to avg $6,500 a ton in 2015; Aluminum to avg $2,060

Copper is expected to average $6,500 a ton during next year while aluminum to average $2,060 a ton, said BNP Paribas.

 

Except for copper , all of these forecasts are above current prices for three-month metal on the London Metal Exchange. 

 

The French bank’s 2015 average price forecasts for the other base metals are lead at $2,365 a ton; nickel at $22,100a ton; tin at $24,000 a ton and zinc at $2,560 a ton. 

 

Mounting supply constraints and respectable demand growth should provide increasing support for most base metals in 2015.

 

“The constraints remain greatest among the smaller metals. In particular, the bank says, supply constraints in lead, tin and zinc will become more pressing in 2015,” BNP Paribas added.

 

Nickel’s outlook remains entirely in the hands of Indonesian policy and still looks positive as things stand, BNP Paribas said, referring to a ban on ore exports. 

 

Aluminum continues to face a large structural surplus, but non-Chinese producers are addressing this and China could start to experience raw material shortages. 

 

In contrast, BNP Paribas still expects firm supply growth to keep the copper price under pressure until deep into 2015.

 

BNP Paribas maintains its recommendation of a short copper trade versus a basket of other base metals.

Crude Enters Bear Market As Gold Posts Longest Winning Streak In 7 Months

WTI Crude oil has now entered a bear market, down over 20% from its June highs (and energy stocks are not off the lows) edging closer and closer to 28 month lows. Meanwhile, gold prices have risen for 4 days in a row - the longest winning streak in 7 months...

Oil in a bear market...

With Brent-WTI back at 3-year lows..

And gold is up 4 dasys in a row - the last time it did this was February and it continued to rise to 2014 highs...

Schizo Market Has Biggest Plunge In 6 Months Following Most Euphoric Surge Since 2011

Yesterday's panic buying vertical ramp in stocks - decoupling from everything but the trusty partners VIX and AUDJPY - has been entirely unwound as The Dow drops over 300 points (nearly unchanged for 2014), Trannies tumble and Small Caps slump. Stocks all closed significantly lower - despite a late-day effort to lift - ending the day down from pre-FOMC Minutes. Treasuries closed 0-2bps higher in yield but had ignored equity exuberance and provided the reality check by the close. Real trading volatility ranges are surging in the major indices which historically has not been a good sign. The USD retarced some of the FOMC losses as Draghi chatter pushed EUR higher. Oil prices cratered under $85 as gold and silver rose (despite USD strength). Following yesterday's biggest intrday swing since Nov 2011, the Russell 2000 saw its worst day in 6 months.

Today was the 4th most active (in terms of quotes/trades) ever.

The last 2 days in US equity markets...

Even Bob Pisani knows by now that the European Close seems to create a trend-reversal moment intraday that few machines (and even fewer humans) are willing to fight. Whether this is remnants of short-term cycles found due to POMO or just a drop in liquidity is unclear; but what is clear, it happens, and all too regularly... except today. After a notably weak start to the day, the machines were just getting revved up for the 1130ET reversal to kick in and lift the market back to VWAP when a curious thing happened... "someone" canceled-and-replaced orders for 666 contracts 26 times in the 1130ET to 1200ET period... and selling accelerated lower, no reversal, to close at the lows on heavy volume.

The History of Metals INFOGRAPHIC

Courtesy of: Visual Capitalist

Morgan Stanley raises 2015 Aluminum price forecast by 8%

Morgan Stanley has upgraded the price forecast for Aluminum for 2015 by 8%. The financial service major has also increased the current year’s price forecast by 3%. This is on account of the boost in aluminum usage by the automotive industry around the globe, especially the US. Moreover, Morgan Stanley also believes that supply is most likely to subside further as more producers turn to production cuts.

According to the latest report by Joel Crane, the price forecast for this year has been increased to $1,893 a ton, 3% higher than the previous forecast. Also, Aluminum prices will touch $2,072 a metric ton in 2015, he added. The global surplus of Aluminum will be 620,000 tons this year. But the surplus will narrow down to 310,000 tons in 2015 and 280,000 tons in 2016. The report further states that the global Aluminum market will swing to 230,000 tons of deficit in 2017.

The cut in production coupled with strong demand growth presents a bright future for the metal. The global aluminum demand is expected to grow 6.6% in 2014 and 7.4% in 2015, mainly on the back of increased demand from US car industry and strong consumption growth in China. The increased use of aluminum in F150 by Ford will boost the demand in near term. Another automobile major Toyota has already announced its plans to use more aluminum in 2018 model of Camry.

Global demand will climb 6.6 percent this year and 7.4 percent next year as carmakers, mostly in the U.S., increase use of the metal and growing consumption in China, the bank said. The increased use of aluminum in Ford Motor Co.’s new F150 is a “boon for aluminum demand” and Toyota Motor Corp. plans to use more of the metal in its 2018 Camry, it said.

Morgan Stanley has raised the current year estimates for Nickel and Zinc by 2% each. The 2015 price forecast for copper was cut by 3 percent to $7,176 per ton.