Negative factor in the market of non-ferrous metals appear significant fluctuations in the currency market and weak demand
non-ferrous metals market review for 15.01.10
Dynamics
On Friday 15 January the price of nonferrous metals on the London stock exchange finished the trading session with a decrease in the background of strengthening the U.S. dollar in the currency market FOREX, and also because of the negative dynamics of equity markets and adjacent areas.
At the London Metal Exchange LME aluminum price closed at 2,281 dollars per tonne.
Copper at the close of the exchange was worth 7405 dollars per ton.
Nickel bidding up the price of 18300 dollars per tonne.
London Metal Exchange index, tracking the dynamics of six metals (index of metals, consists of fixing LME base metals aluminum, copper, nickel, lead, tin, zinc) amounted to 3447.5
Causes
On Friday 15 January the price of nonferrous metals on the London stock exchange finished the trading session with a decrease under the influence of the following factors: 1 - strengthening of the dollar in the FOREX market after the release of economic news makrostatistiki and 2 - the fall of the stock sites, where the negative dynamics of U.S. stock prices (the leaders were falling energy and commodity) has led to the largest decline for the last month the index S P500 (Dow Jones industrial average - 10609.65 (-100.90, or -0.94%), Nasdaq Composite - 2287.99 (-28.75, or -1.24 %), SP 500 - 1136.03 (-12.43, or -1.08%)), 3 - negative dynamics of the neighboring markets, namely the drop in prices of precious metals and oil.
From news worth noting the message of the company Rio Tinto Ltd a significant increase in copper production in the 4 th quarter in 2009. in general after the start of production of higher grade ore in the mines of Escondida and Grasberg. Production of copper in concentrate in the 4 th quarter of 2009. increased by 36% compared to the same period in 2008. to 203,3 thousand tons. For the entire 2009. production was 804.7 thousand tons, up 15% higher than a year earlier. For refined copper in the 4 th quarter also rose - up to 105,5 thousand tons, which is 15% higher. Issue of refined copper in 2009. amounted to 412.4 thousand tons - a 28% higher. At the world”s largest copper mine Escondida, in which the company has a share of 30% in the 4 th quarter produced 30% more copper in concentrate production at the expense of higher-quality ore. At the same time, for the whole year production at this mine fell by 17% compared with 2008. To 318,3 thousand tons. The quality of ore at Grasberg mine in Indonesia has also improved, there in the 4 th quarter received 32,5 thousand tons of copper in concentrate.
What to expect?
Many analysts say that the policy of financial incentives and a very low interest rates encouraged the purchase of non-ferrous metals. Changes in both factors is not yet in sight, so you can confidently speak about a continuing rise in prices for nonferrous metals.
What”s to fear?
negative factor in the market of nonferrous metals, according to analysts, appear significant fluctuations in the currency market and weak demand, which carry a greater chance of increasing desire to profit-taking by market participants and the development of a deep downward correction.
Overview of precious metals market for 15.01.10
Dynamics
On Friday, Jan. 15 quotes for gold and silver have completed trades with a decrease in value against the background of strengthening U.S. dollar on the foreign exchange market, FOREX, and also because of the negative dynamics of equity markets and adjacent areas.
As a result of trading on the COMEX, division of the New York Mercantile Exchange (NYMEX) quotes gold futures dropped 12.50 to 1130.50 on dollars per troy ounce, quotes, silver futures fell 23 cents to 18.43 dollars per ounce.
Causes
On Friday 15 January futures on precious metals have completed trades with a decrease in price under the following factors: 1 - strengthening of the dollar in the FOREX market to the weakening of the tendency of investors to take risks after the economic makrostatistiki and news related to credit in Europe and the global economic recovery, 2 - negative dynamics of the neighboring markets, namely the drop in oil prices, the fifth consecutive day, and 3 - the fall of the stock sites, where the major U.S. stock indices closed in the red zone against the backdrop of negative quarterly reports (Dow Jones industrial average - 10609.65 (-100.90, or -0.94%), Nasdaq Composite - 2287.99 (-28.75, or -1.24%), SP 500 - 1136.03 (-12.43, or -1.08%)), 4 - lack of inflationary pressures has prompted some traders sell futures for gold to leveling or reduction of positions in anticipation of the three-day weekend on the occasion of Martin Luther King in the United States. Investors are also buying gold to hedge against inflation, and successfully carried out last week”s auction on placement of U.S. Treasury bonds suggest that inflation does not pose a serious risk to the bond market.
From news can note the message from the Canadian manufacturer of gold and silver Gammon Gold to reduce output in the 4 th quarter of the mine Ocampo. The company produced 64.007 million ounces of gold equivalent, lower than the 73.766 million ounces produced a year earlier. Cost of production ounces increased from 364 to 422 dollars. To reduce output led torrential rains in October and technical problems. Release of silver fell by 10%, up to 1 million 481.733 thousand ounces.
What to expect?
Traditional purchase of precious metals in the early years of the funds, the overall improvement in investor sentiment, as well as decrease the U.S. dollar will provide sustained support to the quotations of gold and silver. However, the situation could change dramatically if the dollar will resume its strengthening, as the inverse correlation between the dollar and the prices of precious metals continues.
Why worry?
volatile changes in the currency market may be reflected in the sharp fluctuations of prices for precious metals.
review the oil market for 15.01.10
Dynamics
Quotes of the oil market on Friday, January 15 and results of the auctions closed with a decrease in price, showing the fall of the fifth day in a row, against a background of strengthening U.S. dollar on the currency market FOREX, and also because of the negative dynamics of equity markets and adjacent areas.
At the New York Stock Exchange NYMEH the February futures price of U.S. crude fell by 1.39, or 1.8%, and its price was 78.00 dollars per barrel.
The exchange ICE in London, Brent crude futures price fell 1.46, or 1.9%, to 77.11 dollars per barrel.
Causes
On Friday, Jan. 15 quotes on the market of “black gold” closed with a decrease in price under the following factors: 1 - strengthening of the dollar in the FOREX market after the release of economic news makrostatistiki and 2 - the fall of the stock sites, where the negative dynamics of U.S. stock prices led to the highest in the past month drop the index S P500 (Dow Jones industrial average - 10609.65 (-100.90, or -0.94%), Nasdaq Composite - 2287.99 (-28.75, or -1.24%), SP 500 - 1136.03 (– 12.43, or -1.08%)), 3 - negative dynamics of the neighboring markets, namely the fall in prices of precious metals; 4 - economic news, as presented on Friday a monthly report the International Energy Agency noted that the outlook for the oil refining industry in the 1 st quarter look not too rosy, given that oil reserves are in countries of the Organization for Economic Cooperation and Development, remain high and the trend in world demand for energy continues to “look weak”.
From news worth noting that oil production in the world in December 2009. increased compared with the previous month, approximately 270 thousand barrels per day and was about 86.2 million barrels per day. Such data issued on Friday, January 15, the International Energy Agency (IEA). Including oil production in 12 countries of OPEC in December increased by 75 thousand barrels per day, up to 29.1 million barrels per day. Experts estimate that the IEA, oil production by OPEC in 2010. to average 29.1 million barrels per day. For countries outside the OPEC average for 2009. the level of oil experts from the IEA estimated at 51.3 million barrels per day. However, in 2010. volume of oil production outside OPEC countries may increase to 51.5 million barrels per day, experts predict the IEA. It is expected that in 2010. substantially increase oil production in Brazil, Australia, Colombia, India, as well as in CIS countries. It is expected that in 2010. consumption of oil, the world economy as compared to 2009. by 1,7% or 1,4 million barrels per day. However, experts from the IEA warned that the growth of oil consumption in 2010. affect mainly the developing countries of Asia, whereas in OECD countries, reducing demand for oil and energy derivatives may continue.
What to expect?
Many analysts point to the fact that oil prices are still within the trading range of 75-85 dollars per barrel. This indicates that oil prices may have the potential for further growth. The close relationship between oil prices and U.S. dollar is expected to continue to set the tone for trading on the oil market.
Why worry?
The main negative factors in the oil market are U.S. dollar and the technical picture, namely, the psychological and technical level of 85 dollars per barrel, which does not allow to pass higher oil prices, thereby encouraging market participants to lock in profits on the open long positions.
