CRUDE OIL: Oil Weighed Down by OPEC Confusion.
The star commodity of the day turned out to be oil whose prices went up and down like a yo-yo based on the headlines that were coming out every hour from the OPEC discussion. The formal OPEC meeting is scheduled to be held only on November 30 but there have been a lot of meetings and discussions on the sidelines between the OPEC and non-OPEC members to thrash out a deal before the meeting tomorrow. But so far, they have found little luck. If it was Saudi Arabia refusing to tag along last week, this week it has been Iraq and Iran who dont seem to be very sure on whether they want to undertake production cuts or not. The main problem for the oil producers is that if they cut, it will lead to increase in oil prices but how much of that increase will actually offset the loss of revenue through the production cut is what is confusing many of them and some of them believe that they stand to lose more by cutting than by having low oil prices. Of course, the politics of OPEC and non-OPEC members and those beyond will also come into the overall picture and so finally what we have is a muddy pond.
GOLD: Weak Dollar, Falling Treasury Bond Yields Boost Gold Over 1 Percent.
Comex gold prices rose more than 1 percent on Monday, rebounding from a 9 ½ month low, as the U.S. Dollar and long-dated U.S. Treasury Bond yields retreated from recent highs.Traders said oversold technical conditions and an overall drop in physical gold holdings in exchange traded funds (ETF) were behind the move. Holdings of physical gold in ETFs have fallen more than five percent to 54.135 million ounces since November 9, the day after the election.
COPPER: Why China Refined Copper Imports Keep Falling Year-on-Year? SMM Reports.
China’s imports of refined copper tumbled by 44.7 per cent year-on-year to 189,812 tonnes in October, a new low in three and a half years, according to China Customs.
Despite a year-on-year drop in October, imports totaled 2.99 million tonnes from January to October, up 3.32 per cent year-on-year.
SMM attributes the following factors to declines in October’s refined copper imports.
1. The profitable import window has been almost closed for recent months, therefore ,the demand for imported copper waned. The price ratio has improved recently, but the sharp depreciation of Chinese yuan has offset the rising ratio’s impact, leaving imports still in losses.
2. Foreign copper smelters and traders hold back sales to support spot premiums due to nearing annual negotiations for 2017 copper premiums for term shipments. As a result, shipments of refined copper to China have reduced.
3. China’s imports of refined copper were high in October 2015. China’s copper imports stage a scissor-shape movement in 2015 and 2016, changing from a low to high in 2015 and from a high to low in 2016.
LEAD: Chinese Battery Producers to Cut Output as Lead Surges, SMM Says.
Many domestic battery producers now plan to cut or even suspend production in response to the surge in production costs,” SMM lead analyst says.According to SMM survey, domestic battery producers began raising battery prices due to rising costs on November 15 when spot lead climbed above 18,000 yuan per tonne in China’s market, and some producers even stopped receiving new orders.
China’s spot lead prices kept soaring on November 17 and 18, and broke through 20,000 yuan per tonne. Most battery producers thus suspended lead purchases and also stopped receiving new orders, or revalued battery price according to lead prices, especially in motive and ignition battery markets.
The drastic change in market’s supply fundamentals on account of ban on nickel mine production by the Philippines administration led to sharp rally in Nickel prices during recent months. The rally in prices was further aided by improved demand from China. The recovery in Nickel prices has resulted in resurgent stainless steel scrap prices.The Philippines government had initiated mining inspections in an attempt to identify those mines that violate environmental and social regulations. Although it was doubtful whether the government will impose bans, the government did actually impose fines and mining suspensions on 18 nickel mines.
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