All good things must come to an end it seems.
Copper Price Trending Down
Despite a significant rally since the start of October, copper is finally trending down slightly. It comes after the metal reached a peak above US$7,000 a tonne for the first time since September 2014.
However the price has eased since and is currently sitting at around US$6,971 a tonne. Down just over 1% overnight. Which marks the third straight fall in as many days. With weaker Chinese data being blamed for the latest downturn according to Reuters.
Danske Bank analyst Jens Pedersen think there could be more pain to come as well. Reuters reports,
‘“The Chinese data was, on balance, as expected,” he said, predicting that Chinese growth would slow into next year and prices would fall to $6,500 by the end of 2017.’
However, not everyone agrees with Pedersen’s assessment.
Commodities brokerage, Sucden Financial, thinks there is a chance copper could hit US$7,200 per tonne. It is very much conditional though. Sucden analysts wrote in their report,
‘A tight concentrate market feeds bullish investor sentiment; any further supply-side disruption could trigger gains back to (US)$7,200 per tonne…’
It’s a mad market out there folks. And it seems the analysts are doing their best to make it madder.
At the very least we can say copper has had an exceptional 2017. Whether it will continue though is going to depend on China’s growth prospects. Among other things.
Meanwhile, in other markets…
Iron Ore Price — US$60.88 per tonne: -2.9%
Gold Price — US$1,290.13 per ounce: +0.8%
Nickel Price — US$11,740 per tonne: +0.6%
Iron Ore Price Just Can’t Stabilise
Despite a weak rally earlier this week, iron ore has fallen overnight. In fact, it was the biggest one-day percentage decline since 22 September, according to Business Insider.
Again, Chinese data is being blamed. The Middle Kingdom’s steel output is slumping, falling to 71.83 million tonnes in September, compared to the August high of 74.59 million tonnes.
And the pain didn’t stop there. Business Insider reports,
‘Sentiment was not helped by data that showed Chinese property sales fell for the first time in over two years, declining 1.5% in September.’
Whether iron ore can avoid tumbling down to June lows of around US$54 a tonne is going to be the question on everyone’s lips. All eyes are firmly on China for any hint of which way demand is headed.
Gold Finally Moves up, Slightly
As equity markets took a hit gold finally made some ground. Not enough to offset a rather poor week though. The precious metal was down 2% for the week until overnight gains eased the pain.
Though that price-point pain might be back sooner than traders would like. All signs are still pointing to a US Federal Reserve rate rise in December, with an anticipated three more next year. And with North Korea relatively silent for now, gold doesn’t have a lot of legs left to stand on.
Senior market analyst at Oanda, Jeffrey Halley, comments,
‘With US yields continuing to creep slowly higher and stocks markets riding
exuberantly high it will most likely take some sort of geopolitical event to
break the yellow metal out of its bearish malaise,’
Aussie Nickel in Hot Demand
In a win for local miners, China is going nuts for Aussie nickel briquettes. Metal Bulletin reports,
‘Deals for Australian nickel briquettes cif China were reported at $130-160 per
tonne to Metal Bulletin on Tuesday October 17, much higher than deals at
around $80-100 per tonne at beginning of this year and $0-30 per tonne two
It comes as nickel demand could be set to continue over the next few years. Growing demand from the battery market is expected to provide significant growth. A spokesperson for French Miner Eramet Comilog notes,
‘Batteries are expected to be the main driver of nickel use growth in the next
10 years, consuming 270,000 tonnes of additional nickel metals over 2017-2027
period, with a strong focus on the auto industry,’
Which could be more great news for local miners. Especially as Chinese demand is showing signs of growing, up 29% in the January — August 2017 period.
We can’t say the same for most of our domestic share market though. In fact, a lot of our stocks could be fatal for your wealth. Check out our report on five of the biggest threats that could undermine your portfolio.
Junior Analyst, Markets & Money