Summary – Base Metal’s, Commodity Price Analysis
- Iron Ore Prices – Track Rising Demand and Growth Expectations in the Global Economy
- Nickel Prices – Recover on Account of Supply Disruption News, as Mines Unable to Sustain Lower Prices
- Copper Price Analysis – Trend Turns Positive for Copper Prices, in Line with Gradual Recovery in Global Economy
- Stainless Steel Prices – Let Us Now have a Look at Prices in the Steel Industry – which Metline Largely Caters to…
- Aluminium Prices – Rise Over 7% in a Weeks Time in Line with Expectations of Reduced Production in China
This is our next update on trend in base metal prices and industry, following our first update on 10th May 2017 (Click Here – Will Base Metal Prices Bottom Out in May 2017)
Our detailed analysis showed how global commodity markets are interlinked and how we could expect that base metal prices would bottom our in May 2017. We could see that the pricing lows of nickel, aluminium and copper prices were witnessed in May 2017, and it would have been a good business decision for Metal Stockholders, and Manufacturing Companies to purchase raw materials in bulk for their businesses, as sentiment was weakest in that month.
Coming to the current month and the future of the global base metals industry, things have turned positive for the industry, as European, US and Chinese Economy, are performing reasonably well in line with expectations of major economists, and we do not see downside risks in this year. The European region, has witnessed good growth, with all major manufacturing and service sector indicators showing growth, which resulted in weakness of the US Dollar against the EUR.
Overall, we believe it is going to be a recovery year for the whole of base metal industry. It is in line with global economic cycle, as commodity prices recover in expectations of steady growth in the global economy.
Let us see how prices for various commodities have shaped up in our article below:
Iron Ore Prices – Track Rising Demand and Growth Expectations in the Global Economy
Supply disruption, and strong demand from China’s steel industry has resulted in increased purchase of Iron ore and resulted increase in prices. Moreover, this is also in line with growth in the United States, Europe and the Global Economy in General. Prices are expected to remain firm this year, unless we have a surprise event which can impact the global commodity markets. We cannot foresee one at this point of time.
The Chinese Government has ordered steel producers in four major northern provinces to lower output this winter as part of an effort to reduce air pollution. This could also be one of the reasons, due to which Chinese mills may be looking to produce in full capacity, before winter season.
Nickel Prices – Recover on Account of Supply Disruption News, as Mines Unable to Sustain Lower Prices
Nickel prices have shown good strength, with prices moving up from the recent low of $8,600 in May to 10,800 as on 9th Aug 2017. Long term moving averages (200 DMA) have also shown positive signals, along with some fundamental news of recovery in the global economy. Prices, however, are expected to retrace from $10,850-11,000 levels, as we face immediate resistance from a long term down trend. Fundamental supply disruption news to an extent, and weakness in the US dollar to a major extent have supported the rise in nickel prices in the month of June and July.
In the immediate term, we expect some weakness in prices, and nickel prices may retrace. But it is not a negative sign, it would give opportunity to buyers to enter the market again before nickel resumes its rising trend – so purchasing decisions could be accordingly planned by industry executives.
Copper Price Analysis – Trend Turns Positive for Copper Prices, in Line with Gradual Recovery in Global Economy
Copper prices have always been a leading indicator of recovery in global economic growth. The current rise in copper prices has been largely driven by supply disruptions, and steady growth in the Europe, China and US economy, which are considered major consumers of the red metal.
Coming to the current situation, like Nickel, Copper Prices too face an immediate resistance at around US$6450-US$6500, and we would need a strong fundamental trigger for prices to break this level. Both Nickel and Copper have arrived at resistance at the same time, and this could probably be time to see some retracement, before prices begin to resume their upward trend, in line with growth in the global economy (US, China, Europe).
Stainless Steel Prices – Let Us Now have a Look at Prices in the Steel Industry – which Metline Largely Caters to…
Metline Industries largely caters to the the steel pipes, plates, sheets, coils and steel bars industry, which are finished products for many engineering companies in India and worldwide. Both domestic and overseas producers have increased prices for stainless steel products such as Stainless Steel Sheets/Plates/Coils, Stainless Steel Pipes – Seamless & ERW, tracking an increase in raw material prices mainly nickel.
In India, purchases were made in huge quantities by Indian stockholders and manufacturers when nickel prices began rising from 8,600 and crossed $9000. However, once prices crossed US$10,000 and manufacturers increased prices, purchases for their stocking program have come down significantly. The industry is in a wait and watch mode, as there are lot of materials incoming and prices have suddenly risen. We could see mill bookings again being done, if nickel prices retrace upto levels of $9500/MT, which is possible if we do not have an immediate fundamental trigger from the supply side or global economic front.
Aluminium Prices – Rise Over 7% in a Weeks Time in Line with Expectations of Reduced Production in China
The Chinese government plans to shut unlicensed smelting capacity and impose production cuts in the the winter season, has given a big boost to aluminium prices, which was facing range bound movement until 25th of July 2017. Base metals such as nickel and copper had begun showing recovery signs in the month of June and July, but aluminium prices remained range bound. However, with the announcement from the Chinese Government the global aluminum prices seem to be on their path way up.
The immediate resistance for LME aluminium is at US$2120-2130, from where we can expect retracement.
The uptrend in aluminium prices has just begun and I see more upside possibility on aluminium prices in the coming months.
An ISO 9001:2008 Certified Company, Metline Industries (Steel Bars and Rods Division) is one of the largest manufacturer, processor and international supplier of high quality carbon steel bars, alloy steel bars, stainless steel bars, stainless steel angles, stainless steel flat bars, stainless steel bright bars, stainless steel round bars, stainless steel 304 round bars, square bars, steel rods, steel flats and steel wire. We offer standard, custom cut and machined sizes for tool steel flats, bars, squares, sheets, plates, drill rod and hollow bar. Our sheets plates and coils supply division is a leading stockholder and supplier of stainless steel plates, stainless steel sheets, stainless steel coils and stainless steel strips in India and overseas. Other Key Products: Stainless Steel Pipe Fittings, Steel Pipes Manufacturers, Suppliers in India, Stainless Steel Pipes Manufacturers, Pipe Fittings Manufacturers, Flanges Manufacturers
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