Upbeat US GDP boosts asia metal prices; strong fundamentals keep prices steady

Singapore (Scrap Monster) :  Base metals prices finished the last week in the green, with prices remaining steady going into the week of Christmas. An upbeat US final GDP announced on Friday also aided markets across the board, with stock rallying high into the year end and metal going strong in a traditionally lull period of the year. 

US final GDP at 4.1 percent beat the expected 3.6 percent and was the highest reading since December 2009. This strong increase in GDP backs the Federal Reserve's decision to begin tapering its quantitative easing programme by $10 billion per month. 

US stocks rallied across the board as the upbeat data boosts investors’ confidence in the outlook of the largest economy in the world. The DJIA closed at a record level for the third consecutive day. The Dow rose 0.3 percent to 16,221.14 and gained 3 percent on the week. The S&P 500 index closed 0.5 percent higher at and recorded a 2.4 percent weekly gain. 

On the GDP release, the International Monetary Fund’s director Christine Lagarde said in a TV interview that with the Fed’s plan to start tapering its asset-purchase policy and a much more stable outlook on reaching a budget deal, the IMF will look to revise the US economy’s outlook next month. 

In the metals, copper prices at $7,246 per tonne were up $8 on Friday's close. Stocks fell for the 35th day in a row, dropping a net 1,375 tonnes to 382,550 tonnes 

Aluminium prices ended $11.50 higher at $1,785 on Friday, although stocks edged 575 tonnes higher to 5,468,400 tonnes and cancelled warrants fell 7,925 tonnes to 2,346,775 tonnes. Current prices remained steady at the same level. 

Lead gained $41 to $2,216 on Friday’s close and prices has since saw some profit-taking, coming down $10 to $2,206 per tonne. Zinc hit its highest since March after breaking above $2,000, peaking at $2,045 on Friday. The metal closed at $2,039/2,040, up $49.50 or 2.5 percent on the day and is now last done at $2,035. 

“There has been serious short-covering/fresh buying into the strong weekly close. While the [zinc] market may be a tad overbought in the short-term, the technical picture has improved markedly,” a research note from Triland metals wrote. They also added that should good fundamental news come in, we “could be seeing the early stages of a bull run” for the zinc market. 

Nickel prices remained at their highest since early November, concluding $230 higher at $14,420 to end the week and is now still higher at $14,458 with price rising $38. Tin declined $120 from $22,950 to $22,830. 

With the holiday season now in full swing, analysts warn that illiquidity in trading could exacerbate price movements. 

courtesy : fastmarkets