Aluminum stocks in China’s five major markets stopped growing and began falling sharply instead as new policy disrupted shipments.
In China’s domestic market, demand at downstream battery producers should rise with the upcoming China’s National Day Holiday during October 1-7 and spot lead supply is still tight, which will support higher prices. But surging SHFE 1611 lead may keep some downstream producers away from market. Spot lead should increase by RMB 150/mt to RMB 14,500-14,650/mt on Tuesday.
The Department of Environment and Natural Resources (DENR) announced September 27 that is has recommended the suspension of 20 mining firms.
The series of lower tops and lower bottoms on the gold daily chart suggests the market may be getting ready to roll over to the downside. This is not likely to occur, however, until the psychological $1300.00 level is taken out with conviction.At the same time, the $1400.00 level appears to be magical resistance. Given the $100 range between the support and resistance levels, $1350.00 appears to be a fair price – not too hot, not too cold. And this pretty close to where gold is currently trading.
Prices rallied nearly 4 percent at its intraday high during yesterday’s session as OPEC and the other major exporters met in Algiers to talk about ways to support the market. Traders are nervous about the outcome of these informal talks and their worries are being reflected in the huge surge in volatility. Implied volatility, a gauge of how much oil prices swing up and down, rose to its highest since April 18. At that time, OPEC members failed to reach an agreement to implement an output freeze with prices hovering near the $40.00 mark.
One problem that OPEC has to overcome is the unplanned outages issue. Recent data shows that unplanned outages are around 2 million barrels per day. Because of this, it is difficult for members that are pumping near full capacity to cut back on production in order to make way for that fresh oil that can hit the market at any time. Recently, two countries facing outages – Libya and Nigeria – said they are ready to start delivering more oil to the market place.Additionally, Russia is ready to bring more oil to the market from a new oil field. Iran is also bring more oil to market in an effort to get back to pre-sanction production levels.
There is a lot of skepticism going into this meeting and most of it centers on whether Saudi Arabia and Iran can reach an agreement to freeze production. The others will follow if these two countries return to the same page and strike a preliminary agreement.And even if Saudi Arabia and Iran come to an understanding, how are they going to tell Libya that it can’t produce more oil after the country has spent millions to repair its oil infrastructure? Nigeria is facing a similar dilemma after recovering from terrorist attacks to its pipelines throughout the year.With no easy answer available, I believe that the meetings will end with nothing being done. U.S. Commodity Futures Trading Commission on Friday showed that they cut their long positions in crude oil to its lowest in a month, having made the largest weekly addition to their short positions on record.
Natural gas prices are hovering near a 16-month high and are currently up 29 percent so far this year, putting the market on track for its largest annual percentage gain in 11 years. The catalysts behind the strength are lower production and increased exports.Helping to support the market is a drop in gas production that is slightly lower than a year ago. At the same time, demand is up with increased exports to Mexico, as well as liquefied natural gas exports from the Gulf of Mexico.According to Thomson Reuters data, dry gas production in the lower 48 U.S. states fell to an average of 72.6 billion cubic feet per day since the start of 2016 versus a record high 73.3 bcfd during the same period in 2015.
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