Copper will reach to $10,000 per tonne, says Simon Hunt

After a small hike, the price of the commodity is expected to decline, it might even slump below 2,000 dollars per tonne by 2017. Simon Hunt, a global copper analyst as well as economist stated that, the price of copper will stabilize in the second quarter of the year, and from the beginning of third quarter, the price of the commodity will start to hike and there is also a chance that the price of the commodity might reach to a record of 10,000 dollars per tonne by the end of 2015 or by the  beginning of 2016, and then the commodity will begin its downward journey again.

He was speaking at the MCC Chamber of Commerce and Industry. He forecast that, the price of copper might decline even lower to 2,000 dollars per tonne by the year 2017. When he was asked about the condition of other metals he stated that, all the other metals are likely to share the similar fate, one way or the other, except for gold .

The value of copper has been declining, and is staying at the present around 5,000-5,500 dollars per tonne. According to the reports, even though the global market is facing a supply glut at the moment, the supply outlook for 2015, has been reduced from 400,000 tonnes to 100,000 tonnes. Hunt expects that, the global market will grow on a smaller pace in the 2015, but he still isn't sure about its effect in India.

S&P Surges As ECB's QE Leaked: Board Proposes €50 Billion In Bond Monetization Per Month

And so with less than 24 hours to go, the ECB has decided to leak its deliberations not only to Merkel and Hollande, but Dow Jones. To wit:

• DJ: ECB EXEC BOARD'S QE PROPOSAL CALLS FOR ROUGHLY EUR50B IN BOND BUYS A MONTH -  SOURCES
• ECB SAID TO PROPOSE QE OF 50 BILLION EUROS A MONTH THROUGH 2016

More as we see it, but if indeed this will be a program without risk-mutualization and conditional and limited burden-sharing, where the hope was that Draghi would "shock and awe" the world with the size of the bond purchasing program instead, €600 billion per year looks decidedly on the low side of any "surprise" announcement where the whisper number was for €1 trillion per year, and if indeed this is the final formulation may result in a substantial disappointment for stocks after the initial kneejerk reaction.

More from the WSJ which broke the news first, and was followed by Bloomberg and Reuters:

A proposal from the European Central Bank’s Frankfurt-based executive board calls for bond purchases of roughly €50 billion ($58 billion) per month that would last for a minimum of one year, according to people familiar with the matter.

The ECB’s executive board met Tuesday to decide on the proposal, which will form the basis of deliberations by the entire 25-member governing council on Thursday. The final number and details could change after the full board weighs in on the plan.

Still, the executive board’s proposal indicates that the ECB could move more aggressively than financial markets have expected. Forecasts among analysts have recently centered on a figure of around €500 billion or higher for a quantitative-easing program, but the executive board’s proposal suggests that bond purchases could amount to at least €600 billion.

An ECB spokesman declined to comment.

The knee-jerk reaction

Morgan Stanley forecast 24 percent hike in copper price

The bank, which is based in New York had been stuck with its bullish view, stating that the copper metal, which is a preferred commodity, will increase by about 24 percent to 7,049 dollars per tonne, by the end of the current year. Morgan Stanley, stated in a report that, the bank has no evidence on the collapse of demand in copper

 

The value of the commodity, declined to 6.2percent last week, which was the biggest decline since the year 2011, after the World Bank cut down its forecast for the world economy. The decline in energy prices has also affected the price of metal prices, by declining the cost of production, forcing the companies to cut down the price, stated Morgan Stanley.

 

Tom Price stated on his report that, the bank stays bullish regarding the copper outlook. The bank also stated that, it was surprised on the latest move by copper price. The almost 50 percent decline in the price of the oil, over the past year, has also declined the production cost copper by about 5 percent. From July 2014 to 12th January 2015, the 90 percent of changes in the price of copper is due to the change in price of oil. But last week the connection between the two commodities broke, the value of copper declined to fast to too low.

World refined lead metal supply and demand balanced during Jan-Nov '14

The latest statistics published by the International Lead and Zinc Study Group (ILZSG) indicates that global refined lead market was in surplus of 1,000 tons during the initial eleven-month period in 2014. The total reported lead inventories declined by 40,000 tons during the same period.

The lead mine production in Australia, Peru and the United States increased during the eleven-month period. But they were enough to partially cover the decline in production in other countries such as Bolivia, South Africa and China. The overall global lead mine production reduced by 2.8% when compared with the corresponding eleven-month period in 2013.

The world lead mine output during the ten-month period totaled 4.836 million tons as against 5.435 million tons during 2013.

The refined lead metal production during the eleven-month period totaled 10.300 million tons, 1.24% higher when compared with the 10.174 million tons output during corresponding eleven-month period in 2013. The refined lead metal production surged higher in China, India, Italy, Kazakhstan and the Republic of Korea, whereas it declined sharply in Japan and the US.

The global demand for refined lead metal increased by 1% to 10.299 million tons during the initial eleven-month period in 2014. The European apparent usage increased by 2.3%. China reported a demand rise of 1.2%. The apparent consumption in the US dropped by 0.6%.

Is This The Reason Why Gold Is Suddenly Surging?

Total Gold ETF physical holdings rose 0.85% on Friday (following Thursday's 0.78% rise) combining for thebiggest 2-day rise since Nov 2011 (adding 843,000 ounces of gold in 2 days). Of course these moves came right after the SNB decision ands are the largest since the peg was announced in 2011. GLD - the largest gold ETF - saw holdings surge 1.9% on Friday, the biggest single-day surge in almost 5 years.

TotalGold ETF Holdings surged 1.65% in the last 2 days

SPDR GLD ETF Holdings spiked 1.9% on Friday and 3.3% in the last 2 days - the biggest 2-day rise since May 2010...

Of course, once again this shows that only paper gold matters for price determination... physical is irrelevant (until of course, physical is all that matters).

Midwest aluminum premium to dip but stay near record highs –analysts

The U.S. Midwest aluminum premium will drop but remain near record highs in 2015 as warehouse queues are reduced, two analysts said on Tuesday in a panel discussion at the Platts Aluminum Symposium.

 

The premium , or the price aluminum users pay on top of the benchmark London Metal Exchange (LME) futures price <0#AL> for physical delivery, could fall 2-1/2 cents off the current record-high level of 24.15 cents a lb by March or April, said Timothy Hayes, principal at metals researcher Lawrence Capital Management.

 

Ed Meir, senior commodities analyst at brokerage INTL FCStone, said the premium would begin to fall in the second half of 2015 and would trade between 19 and 22 cents a lb.

 

The Midwest premium, along with regional premiums in Europe and Japan, soared to record highs in 2014 as queues to receive aluminum from LME warehouses have grown to more than 500 days due to financing deals that have drawn intense scrutiny from lawmakers and regulators.

 

In response to the criticism and complaints from users, the LME will implement a rule requiring that warehouses link load-in and load-out rates beginning Feb. 1.

 

The expected decline in wait times will pressure premiums, Hayes and Meir said, though they emphasized that other factors were just as if not more important.

 

A decline in Japan’s regional premium, which is currently around $110 a tonne less than the Midwest premium, would spill over to pressure U.S. markets, Hayes said, forecasting an average premium of 21 cents a lb in 2015, 18 cents a lb in 2016, and 15 cents a lb in 2017.

 

However, he said a widening trade deficit would underpin premiums and cause an increase in the medium term. He added that the premium could ultimately find a floor around 10 cents a lb, the cost of shipping aluminum from the Gulf of Mexico to the Midwest, a level Hayes called “a beacon of where premiums should be.”

 

Economic weakness around the world will hamper U.S. growth in the second half of the year, weighing on the premium, Meir said. In addition, a flattening forward price structure, coupled with major banks’ exits from physical commodity financing, will reduce the attractiveness of storing aluminum.

 

“I don’t know who has the deep pockets to replicate these deals assuming the spreads come back,” Meir said.

 

He added that surging demand from the U.S. automotive sector would prevent the premium from falling further, though the possibility that top producer China would reduce export duties on ingots remained a “wild card” and had the potential to drive premiums down sharply.

Global zinc market in 255 kt deficit during Jan-Nov '14: ILZSG

The latest statistics published by the International Lead and Zinc Study Group (ILZSG) indicates that global refined zinc market was in deficit of 255,000 tons during the initial eleven-month period in 2014. The total reported zinc inventories declined by 326,000 tons during the same period.

The zinc mine output reported declines in Australia, Canada, India, Ireland and Namibia. However, the fall in output was covered with the increased mine output from other countries including China, Mexico, Peru, Sweden and the United Sates. Overall, the zinc mine output grew by 1.9% during the initial eleven months of 2014, in comparison with the previous year.

The refined zinc metal production during the eleven-month period totaled 12.296 million tons, 4.16% higher when compared with the 11.805 million tons output during corresponding eleven-month period in 2013. The rise in refined zinc metal output was mainly due to increased output from China.

The global demand for refined zinc metal increased by 5.4% to 12.551 million tons during the initial eleven-month period in 2014. The Chinese apparent usage increased by 10.5%. The US reported a demand rise of 3.9%. On the other hand, apparent consumption in the Europe region declined by 1.6%.

The global mine production during the month of Nov ’14 alone totaled 1.213 million tons. The refined zinc metal output during the month totaled 1.207 million tons. The global demand for the metal totaled 1.190 million tons during the month.