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Surging Shanghai metal stocks have injected an element of doubt into the bull narrative and the LME Index is now showing year-to-date gains of only 3% after a February pull-back. Shanghai Futures Exchange stocks of aluminium, copper and zincSEASONAL SURGEMetals bulls have been nervously watching the fast build in Shanghai Futures Exchange (ShFE) stocks over the past few weeks. Copper stocks have grown equally dramatically, from 69,268 tonnes to 242,009 tonnes over the same period. It is currently assessed by Shanghai Metal Market at a bombed-out $22.50 a tonne, down from an October high of $152.50. WAIT AND WATCHIt's difficult to say until China's seasonal stocks pattern plays out in full.

Western policy-makers are still mindful of the supply-chain chaos caused by U.S. sanctions on Russian aluminium giant Rusal and its owner Oleg Deripaska in 2018. A unilateral move to shut out Russian aluminium will accelerate the splintering of what was once a highly globalised market-place. Excess Chinese product in the Asian region is now being supplemented by excess Russian primary aluminium as many Western users choose to self-sanction and not buy Russian metal. Were the United States to impose high tariffs on Russian metal, the LME need only suspend delivery to U.S. locations, a precedent set with the United Kingdom's post-war tariffs on Russian nickel. The LME decided in November not preemptively to ban Russian metal deliveries ahead of formal government action against Russian producers.

☆ Goldman Sachs strategist reveals the 'cheap' sectors to own right now
▼ + stars: | 2023-02-08 | by ( Ganesh Rao | ) www.cnbc.com time to read: +2 min

Bank stocks are "inexpensive," and commodity companies look "cheap" in this high interest-rate environment, according to Goldman Sachs' Sharon Bell. Bell, a European strategist at the investment bank, said the two value sectors are set to do well as economic growth remains robust. Goldman forecasts global GDP to grow slightly above 2% this year — higher than was forecast by economists just a few months ago. Strong growth means that central banks are likely to keep interest rates higher for longer, according to Bell, and "that will be good for the banks." Higher interest rates allow lenders to increase their net interest margins — a key measure of bank profitability.

Cobalt has lost share to lithium as the Chinese EV market in particular pivots towards non-cobalt battery chemistry. The abrupt turnaround in both narrative and price has led to a surge in trading activity on the CME cobalt contract as producers and consumers respond to the shifting landscape. CME cobalt price, total volume and market open interestCHANGE OF GEARCobalt's fortunes are still tied to the EV sector but the relationship is changing. That eye-watering growth rate would be stronger still were it not for a shift towards non-cobalt battery chemistries, led by China, the world's largest EV market. COBALT FUTURES TAKE OFFOne beneficiary of this turnaround in cobalt market dynamics has been the CME (CME.O), which has seen activity in its cobalt contract mushroom since the middle of last year.

☆ U.S. plans 200% tariff on Russian aluminum - Bloomberg News
▼ + stars: | 2023-02-06 | by ( ) www.reuters.com time to read: +1 min

Feb 6 (Reuters) - The United States is preparing to impose a 200% tariff on Russian-made aluminum as soon as this week, Bloomberg News reported on Monday, as Washington looks to mount pressure on Moscow over its invasion of Ukraine. Reuters reported last October that the Biden administration was weighing restrictions on imports of Russian aluminum in response to Moscow's military escalation in Ukraine. The White House declined to comment on the Bloomberg report, which cited unnamed people familiar with the plans. The latter agency is responsible for investigating anti-dumping and anti-subsidy cases and in September 2021, imposed a 62.2% tariff on imports of Russian aluminum foil after determining it was being sold under fair value. Aluminum prices spiked last year, along with other commodities exported by Russia, with London Metal Exchange three month aluminum prices reaching a record of over $4,073 per tonne in March.

LONDON, Feb 3 (Reuters) - China was a net exporter of refined zinc last year for the first time since 2007, while exports of refined lead remained super strong for the second year running. China's net trade in refined leadTRADE SWITCHChina exported 116,500 tonnes of refined lead last year, the highest-volume outflow since 2007. The Flin Flon zinc smelter in Canada produced its last zinc in 2022 after more than 25 years of activity. That of the Florence secondary lead plant in South Carolina in 2021, by contrast, was an unexpected hit to the U.S. supply chain. If China gets there first, last year's east-west imbalances in both zinc and lead markets may last longer than expected.

Median 2023 price forecasts for all the core LME base metals are lower than both last year's price and current trading levels. The LME copper cash settlement price was $9,075 per tonne on Tuesday, up 10% on the start of January. A median forecast of $8,625 for the full year is 2.1% lower than last year's average of $8,814 per tonne. Aluminium is viewed as more finely balanced, with a median forecast supply surplus of 80,535 tonnes this year and 92,100 tonnes in 2024. That said, last January's median forecast proved surprisingly close to the mark at $34,880 in what was a year of extraordinary volatility.

LONDON, Jan 30 (Reuters) - China raised export tariffs on unwrought primary aluminium and alloy at the start of this year after a rare burst of export activity in the first part of 2022. Russian aluminium dominated the import mix and Russian smelters were the main recipients of Chinese alumina exports last year. China's unwrought aluminium imports vs Russian metalRUSSIAN IMPORTS GROWDecember's imports of primary aluminium, by contrast, accelerated to 128,000 tonnes, the highest monthly tally in over a year. China's total alumina exports vs RussianCHINA LIFTS ALUMINA EXPORTSThe two countries' aluminium trade also extends to the intermediate alumina stage of the processing chain. It could also mean China returning to consistent net importer of unwrought aluminium, particularly if domestic smelter production continues to be plagued by power constraints.

China's net refined copper imports and year-on-year changeBOOMING IMPORTSThe strength of last year's imports was even more surprising given the financial problems at privately-owned Maike Group. But it has clearly had minimal impact on the overall flow of refined copper into China. But China's imports of Russian copper actually fell by 20% to 324,000 tonnes in 2022. China's net imports of refined copper were running below year-earlier levels through May but steadily accelerated over the second part of the year. Goldman suggests that a sign of restocking by China's copper sector would be net refined imports being consistently higher than 280,000 tonnes per month.

☆ China's reopening could boost global growth — and worsen inflation
▼ + stars: | 2023-01-27 | by ( Anna Cooban | ) edition.cnn.com time to read: +7 min

London CNN —China’s swift reopening after nearly three years of strict coronavirus controls could provide a much-needed boost to global economic growth, but may also stoke inflation just as it has shown signs of falling back. The revival of the world’s second largest economy — and its biggest consumer of commodities — threatens to push up global prices for fuel, industrial metals and food this year. The speed of the reopening, as well as indications that infections may have already peaked, has been surprising, analysts told CNN. Yet, if global food and energy prices start rising again, that could feed through into higher consumer prices. China’s reopening could bump up demand for agricultural goods, while the world is still in the grips of the worst food crisis in modern history.

China's own production of refined tin was flat year-on-year at 165,900 tonnes in 2022, according to Shanghai Metal Market. ShFE tin price, market open interest and stocksSHIFT IN POSITIONINGWhile China has reshaped tin's fundamental picture, the price recovery has forced an equally significant shift in fund positioning. Investment funds turned net short on the LME tin contract in September as the price was imploding. Tin market open interest collapsed from 102,106 to 71,218 contracts in the week before the Lunar New Year holidays, indicating a big clean-out of short positions. GOLDILOCKS PRICEThe tin price is now in the Goldilocks zone, not high enough to frighten off physical users, and not low enough to threaten existing supply.

☆ A weaker dollar is great news for copper, asset manager says — and names 3 stocks to buy
▼ + stars: | 2023-01-20 | by ( Weizhen Tan | ) www.cnbc.com time to read: +2 min

Glass highlighted three copper or copper-related stocks that could get a boost from the weaker dollar. Glass also named Chilean copper mining group Antofagasta , and metals and mining firm Boliden. "There just has not been enough investment in copper," Glass told CNBC's "Street Signs Asia" on Tuesday. Glass isn't the only one bullish on copper. Three-month copper on the London Metal Exchange was trading around $9,418 a metric ton on Wednesday, up from around $8,000 a metric ton in November.

☆ London Metal Exchange CEO is hopeful about reverting to Asian hours for nickel
▼ + stars: | 2023-01-19 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailLondon Metal Exchange CEO is hopeful about reverting to Asian hours for nickelMatthew Chamberlain, CEO of the London Metal Exchange, says there's a lot of untapped demand in those hours, but "we have to do that in a way that means all of our stakeholders are comfortable with the risk profile" and "we're not quite there yet, but I am really, really hopeful that we will get there soon."

☆ Davos 2023: LME CEO says nickel reforms to be implemented 'relatively quickly'
▼ + stars: | 2023-01-18 | by ( Divya Chowdhury | ) www.reuters.com time to read: +2 min

DAVOS, Switzerland, Jan 18 (Reuters) - The London Metal Exchange (LME) will implement recommendations on accountability and position limits "relatively quickly" from an independent review of last year's nickel crisis to prevent market distortions and improve risk monitoring, its chief executive officer said on Wednesday. "The recommendations around accountability levels and position limits are particularly important, are broadly rules-based, so could be brought about quite quickly," LME CEO Matthew Chamberlain said on the sidelines of the World Economic Forum's annual meeting in Davos, Switzerland. The LME, the world's largest and oldest metals forum, annulled all nickel trades on that day, for which it is facing legal action, and suspended the market for the first time since 1988. Independent consultancy Oliver Wyman was appointed by the LME to carry out a review of the debacle. He said the LME plans to make its platform more attractive to traders by not increasing fees in 2023 "even with inflation".

☆ Stocks buoyed by cheery data after BOJ damp squib
▼ + stars: | 2023-01-18 | by ( Nell Mackenzie | ) www.reuters.com time to read: +4 min

Data showed British inflation dropped to a three-month low of 10.5% in December, the latest sign that global inflationary pressures are abating. Also helped by a string of positive earnings updates, Europe's STOXX 600 index (.STOXX) rose 0.4% to its highest level since April 2022. Earlier in the day MSCI's broadest index of Asia-Pacific shares outside of Japan (.MIAPJ0000PUS) rose 0.24%, and S&P 500 futures gained 0.26%. The dollar at one point rose as much as 2.7% against the Japanese yen, but was last 0.78% higher at 129.11. Data on Tuesday showed China's economic growth had slumped in 2022 to 3.0% - the weakest rate in nearly half a century.

☆ Commodities Warrant Cautious Optimism, Not Exuberance, in 2023
▼ + stars: | 2023-01-17 | by ( Megha Mandavia | ) www.wsj.com time to read: 1 min

Copper prices will benefit from new demand from clean-energy applications over the next few years. Commodities bulls have left the pen, ready for a long run. Odds are that 2023 will end with industrial-metal prices, at least, higher than they are now. Three-month copper futures are trading at $9,100 a metric ton on the London Metal Exchange, already up 9% in 2023 according to FactSet. And iron-ore prices rallied by almost 50% from early November to the end of 2022, according to CEIC, a data company.

Currently trading around $9,130, the copper price is up by 9.6% since the start of January. Investors played copper from the short side for much of last year, if they were prepared to engage at all. The funds' sudden return is a sign that many are betting on a much sunnier outlook. "To the degree these short positions have not already covered, this may support copper in the short term", the bank said. It's clear, though, that copper long positioning is primarily a bet on Chinese recovery, underpinned by measures to revitalise a foundering property sector and more metals-intensive green infrastructure.

It's the lowest end-year inventory in the system this century and reflects two years of steady withdrawals which have left exchange stocks of metals such as zinc and lead almost depleted. It's no coincidence that all the LME base metals have experienced bouts of extreme tightness over the last couple of years. Zinc stocks were down by 65% and lead stocks down by 59% on December 2021. LME stocks could desperately do with any sort of rebuild, whether seasonal or cyclical. So far, however, significant arrivals remain conspicuous by their absence and until that changes, low visible inventory is going to keep roiling the LME base metals.

☆ Exclusive: UK watchdog blocks LME plan to restart Asian hours nickel trade-sources
▼ + stars: | 2023-01-11 | by ( Pratima Desai | ) www.reuters.com time to read: +2 min

The world's largest metals trading exchange was forced to suspend all nickel activity for eight days in March 2022, after prices spiked more than 50% during Asian trading hours to hit a record above $100,000 a tonne. Volumes and liquidity on the LME have collapsed since then, partly due to the continued suspension of nickel trade in the Asian time zone. The LME had said on Nov. 28 that it hoped to resume trading during Asian hours within two weeks. "The regulator wants the LME to monitor nickel trading and make sure volatility is contained. "The regulator needs to be sure that if Asian hours nickel trade was to resume, supervision is effective.

The four each held a sizeable short position of between 13,000 and 24,000 lots, equivalent to 78,000 to 144,000 tonnes. LME warehouses held just 80,088 tonnes of nickel stocks when Russia invaded Ukraine on Feb. 24. The mix of producer hedging and speculative overlay in the short position landscape is impossible to know with any precision. It's worth remembering that Tsingshan is itself a huge nickel producer, albeit not in a form that can be delivered against an LME short position. Excerpt from Oliver Wyman reportLATE ARRIVALThe shorts were not helped by the rapid build-up of a long position on March 7 which the report links to "one financial client with no material existing nickel position".

LONDON, Jan 10 (Reuters) - The London Metal Exchange (LME) said on Tuesday it will set out by the end of the first quarter how it will deliver on the recommendations of an independent report into the nickel crisis last year. Months after turbulence highlighted shortcomings in LME oversight, the nickel contract remains broken. It appointed management consultants Oliver Wyman to carry out a review of the nickel trading debacle last June. Part of the problem is that only about 21% of global production or 650,000 tonnes can be delivered against the LME nickel contract. "The LME Nickel Committee will continue to explore whether any changes to the LME Nickel contract ... may be beneficial to the market," the LME said.

☆ Asia shares dip on hawkish Fed remarks; recession risk weighs on commodities, oil
▼ + stars: | 2023-01-10 | by ( Selena Li | ) www.reuters.com time to read: +3 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 0.17%. "The main theme overnight was cautiousness in the equity space as stocks pared gains after hawkish comments from two Fed officials. read moreChina stocks on Tuesday snapped a six-session winning streak, while Hong Kong shares jumped to a six-month high. However, any optimism may be short-lived, said Trinh Nguyen, emerging Asia economist at Natixis in Hong Kong. "I think what would temper a lot of this optimism coming up is really the reality of this opening up.

☆ Nickel markets brace for nail-biting threequel
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: +2 min

HONG KONG, Jan 10 (Reuters Breakingviews) - Chinese tycoon Xiang Guangda, notorious for disrupting the London Metal Exchange’s nickel trade last year and the year before, may have done it again. His Tsingshan Holding is planning to pump up production of refined nickel by repurposing a number of copper plants, Bloomberg reported on Jan. 9. If he succeeds, his novel strategy to take advantage of higher prices could double Chinese output of the metal products. In 2021, the entrepreneur sent prices plummeting when his group announced deals to deliver nickel matte to Chinese electric-car battery material suppliers. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Although commanding a weighting of just 0.936%, lower than any other industrial metal, lead is included in the Bloomberg Commodity Index (BCOM) for the first time this year. LME lead three-month price, stocks and spreadsSTOCKED OUTLME lead stocks fell by 54% to 25,150 tonnes over the course of last year. The distribution of LME warehouse stocks says a lot about the underlying stresses in the physical supply chain. China has emerged as a supplier of last resort to a stretched Western market. REBALANCINGThe lead market that has been trying to rebalance for two years and the return of Nyrstar's Port Pirie smelter in Australia after three months of maintenance should help.

LONDON, Jan 6 (Reuters) - March 2022 will go down in the history books as the moment the global nickel market broke down. The search is on for a new nickel price discovery process. Global Commodities Holdings (GCH) thinks it has a solution, a blast from the LME's own distant past that could have far-reaching consequences for industrial metals trading. This is self-evidently true of the LME nickel contract, which simply could not absorb the scale of short positions accumulated by China's Tsingshan Group. It may not just be nickel players keeping a close eye on GCH's proposed new metals pricing solution.

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