Thursday, October 9, 2014
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.
Do you know which is the best among Base Metals?
Base metals have been on the defensive since summer, hurt by slowing growth in China, the eurozone and US, perceptions of a more hawkish Federal Reserve and other factors.
SocGen is sticking to their view that increasing copper mining output, which is now well under way, will over time ease the current tightness in the refined market.
While global copper consumption growth is expected to strengthen this year helped by moderately higher global economic growth, serious structural oversupply in China's housing sector and tightened credit conditions are likely to cap both Chinese and global copper consumption growth.
There is scope for the other metals to rally to varying degrees on tightening markets coincident with seasonal demand strength typically associated with Q4. However, as ever, much will depend upon China.
SocGen is most bullish towards nickel. While the refined nickel market remains well supplied at present, this is likely to change from next year. The nickel market has changed dramatically as a result of Indonesia's ban on nickel ore exports, which SocGen expects to be enforced.
This one factor alone is likely to shift the nickel market from structural oversupply to a balanced outcome this year, with sizeable deficits probable over the coming years.
Wednesday, October 8, 2014
South Africa plans on declaring copper as a precious metal
Andries Nel, the deputy minister was concluded in an intense debate in Johannesburg, stating that, the department was anticipating to mark copper as a precious metal, which has been agreed and advocated by many institutions including the state owned, TRANSNET, logistics giant.
At the convention of Association of Municipal Electricity Utilities, the representatives stated that, the government should hurry up and introduce new security measures in order to hold up the increasing number of copper theft, and also trace the whole link of copper cable syndicates.
At the end of last month, a copper theft at Gauteng’s metro lead to THE water crisis, which lasted for at least three weeks. Moreover, that the theft leads to the delay of Gautrain operations which took place last week, between Hatffeild and Pretoria
As the legislation lacks tight laws on the copper theft, it was seldom the copper thefts who were caught, convicted under the law successfully, stated the department
UK court to issue ruling in London Metal Exchange/Rusal case
(Reuters) - The Court of Appeal in London is due to hand down a decision on Wednesday in a case determining whether the London Metal Exchange (LME) can implement tough new rules to reduce the waiting times for withdrawing metals from the industry's warehouse stores.
A three-judge panel will either overturn or uphold a March ruling in favour of Russian aluminium company United Company Rusal that halted a key LME warehouse reform.
The decision is scheduled for Wednesday morning, according to the website of the Court of Appeal.
The original judgment ruled against the LME, the world's biggest industrial metals market, because the court regarded the consultation process as "unfair and unlawful".
The LME's new rules, originally due to take force in April, were aimed at making owners of warehouses deliver out at least as much metal as they take in.
But Rusal, the world's largest aluminium producer, feared the reforms could unleash a flood of supplies onto the market and depress aluminium prices.
Judges "reserved judgment" after a two-day hearing in July which revolved around the consultation process, not the actual warehouse reforms sought by the LME, which is now owned by Hong Kong Exchanges and Clearing Ltd
Benchmark LME aluminium prices have shed about 30 percent since touching a peak around $2,800 a tonne in May 2011.
Industrial buyers of aluminium, used in transport and to make beverage cans, have had to wait up to two years to get delivery of metal from some LME warehouses and the new rules aim to cut the queues down to a maximum of 50 days.
Americans Should Probably Avoid These Areas Of The World
By way of a Public Service Announcement,
we highly suggest Americans avoid the following areas of Jihadist operation...Is The Bull Market Complete?
With all possible counts for a basic advance from the 2011 lows having expired and a right shoulder (9/17/14) printed and confirmed by middle section counts we know that the bull market is complete. However, it never hurts to have some affirmation along the way that rallies like Friday's are nothing more than hiccups in the bear market.
The key to knowing if Friday's rally was the beginning of a new basic advance is in understanding the nature of Thursday's low. The low on Thursday was confirmed by the high of a flattened top (or point E of a non-symmetrical descending middle section) on 11/30/07. It counts 1,249 days to the high of the previous basic cycle (black) on 5/2/11. Thursday's low was exactly 1,249 days beyond the high in 2011. This is the first of two steps in identifying the sort of low that the bears would be worried about.
Thursday's low was also forecast with a count from an important low on 10/18/00. It counts 2,549 days to the high of the multiple cycle (green) on 10/11/07. All important lows must be confirmed with forecasts from both the basic and multiple cycles. Thursday's low was exactly 2,548 days beyond the high in 2007.
But here's the rub for the bulls. The multiple cycle forecast is a low-high-low count and not a middle section forecast. All important lows have always been confirmed with middle sections. The fact that one of the forecasts used a method other than a middle section should be a big red flag for anyone who expects higher highs in the Dow.
By: Ed Carlson
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