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MEIR ON METALS: Metals retreat on softer GDP number, but ‘risk-on’ trades still in play

January 27, 2012 - 17:29 GMT Location: London

KEYWORDS: Ed Meir , base metals , copper , aluminium , zinc , lead , tin , nickel

Analyst Ed Meir looks at what is moving the metal markets on Friday.

Copper and general commentary: Metals continued to barrel higher on Thursday January 26, with copper rising more than 2% to a four-month high; gold rose to a six-and-a-half-week peak and energy prices also experienced good gains. The US stock market sat the session out, closing the day with a slight loss, although it is on track for one of its best Januaries in years. The euro was firm for most of the day; despite selling off to $1.31 by the end of the session, it almost touched a five-week high of $1.32 at one point. There is not much new that we can add to what we have been saying in recent commentary. With the dollar under pressure, we are seeing “risk on” trades seep into a number of commodity complexes and base metals should be a prime beneficiary in this regard. In addition, Wednesday’s Fed statement should provide...

All material subject to strictly enforced copyright laws. © Euromoney Institutional Investor PLC.

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Aluminium

May 22, 2012 13:32 Base metals prices stable in LME officials
May 22, 2012 11:43 Ormet announces Q1 loss on lower prices, higher costs
May 22, 2012 10:21 Base metals prices trade in tight ranges in LME pre-market
May 22, 2012 08:44 SHFE vs LME arbitrage: copper, aluminium, zinc
May 22, 2012 08:37 Shanghai copper prices edge up on improved sentiment

Lead & Zinc

May 22, 2012 13:32 Base metals prices stable in LME officials
May 22, 2012 10:21 Base metals prices trade in tight ranges in LME pre-market
May 22, 2012 09:58 HCM has no plans to deliver after LME zinc brand listing
May 22, 2012 08:44 SHFE vs LME arbitrage: copper, aluminium, zinc
May 22, 2012 08:37 Shanghai copper prices edge up on improved sentiment

Copper

May 22, 2012 14:22 Anglo and Codelco suspend legal proceedings over Sur
May 22, 2012 13:32 Base metals prices stable in LME officials
May 22, 2012 11:53 Glencore takes control of Mutanda in $340m deal
May 22, 2012 10:21 Base metals prices trade in tight ranges in LME pre-market
May 22, 2012 08:44 SHFE vs LME arbitrage: copper, aluminium, zinc

Nickel & Tin

May 22, 2012 13:32 Base metals prices stable in LME officials
May 22, 2012 10:21 Base metals prices trade in tight ranges in LME pre-market
May 22, 2012 06:51 China nickel ore imports near 4.8m tonnes in April
May 22, 2012 04:05 LME ASIAN WRAP: Copper prices rangebound as market mulls Europe news
May 21, 2012 18:00 Australia’s IMX takes over Tanzania nickel project as it buys partner Continental

Comment & analysis

COMMENT: When super-cycle poster child BHP Billiton trims its plans...

BHP Billiton is one of the poster children for the commodities super-cycle: a mining company whose immense upstream assets in copper and iron ore have fed the industrialisation of China since the early years of the 21st century and enabled it to return $52 billion to shareholders between 2001 and 2011.
LORD COPPER: There is nothing to fear after JP Morgan loss ...

So, here we go again. Another bank, another huge trade gone bad. This one doesn’t even appear to have been a case of rogue trading; a whole desk seems to have been operating with the full knowledge of the management and/or risk committee.
COMMENT: Keep calm and carry on?

The decision of the Indonesian government last week to uphold the ore export ban and taxes from May 6 has failed to calm the nervous market. So far, both producers and buyers have displayed an impressive tolerance level to the export uncertainty. But how long will their patience last?