1 Comment
The once obscure Baltic Dry Shipping Index came to prominence at the start of the Chinese-led commodity supercycle around a decade ago.
The London-based Baltic Exchange tracks the cost of moving commodities along more than 50 routes around the world. With China's emergence as the dominant trading economy in the world the index became one of the go-to barometers. China now controls the global trade in just about every commodity including iron ore where it represents over 70% of the seaborne trade and base metals where its share is approaching 50%. Capesize daily rates topped out at an eye-watering $234,000 in June 2008. On Thursday it fell to just $4,015 On Thursday, the overall Baltic Dry Index fell more than 3% to 519, the lowest since 1985 when Baltex started tracking the data and down by more than a third so far this year. The index peaked at 11,677 in May 2008, but never recovered following the global financial crisis, despite the continued growth in world and Chinese bulk trade. Of the freight rates tracked by the exchange, those for Capesize ships provide the best insight into the health of the Chinese economy. Capesize vessels can haul roughly 160,000–180,000 tonnes and are the dominant vessels for the world's 1.2 billion tonnes seaborne iron ore trade. Iron ore represents more than a fifth of the global dry bulk trade and is the second most traded commodity after crude oil and ahead of coal. Iron ore shipments to China declined 12% in October, but year to date imports at 774.5 million tonnes is flat compared to a record-breaking 2014. Coal cargoes to China are imploding however with January–October data showing a 30% slump to 170 million tonnes compared to first ten months of 2014. The surge in iron ore trade beginning a decade ago translated into a massive boost for daily earnings for Capesizes, the largest ships tracked by the index and so called because these vessels cannot use the Panama Canal. Capesize rates topped out at an eye-watering $234,000 in June 2008. On Thursday the daily rates fell 7.2% to just $4,015 a day. original story at: http://www.mining.com/chinese-commodity-trade-barometer-at-record-low/ Zinc traded near the lowest level in more than six years and other industrial metals held near the lowest since at least 2010 on concerns about faltering demand in China, the biggest user.
China's President Xi Jinping said that the worlds second largest economy is on a “considerable downward pressure,” while the data showed chinas home-price recovery had slowed last month in October. Zinc prices have fallen year on year as China's slowdown cuts demand and oversupply. A gauge of the six main contracts traded on the London Metal Exchange has dropped 25 percent this year, partly as a stronger dollar made metals priced in greenbacks costlier for buyers holding other currencies. The Federal Open Market Committee on Wednesday will release minutes of its latest meeting, which may give more indications on when U.S. policy makers will raise interest rates. “The news about the feeble property prices in China has further added negative sentiment,” Naeem Aslam, chief market analyst at Avatrade Ltd. in Dublin, said by e-mail. “Factors such as a stronger dollar, which could eke out even more gains later today after the FOMC minutes, could push the base metals even lower.” Metals PricesZinc for delivery in three months lost 0.3 percent to $1,543.50 a metric ton by 12:34 p.m. on the LME. The metal earlier touched $1,518.50, the lowest since July 2009. Lead reached the lowest since 2010 and nickel fell to the weakest since 2008, before paring losses. The plunge in metals has hurt profits for the world’s biggest mining companies. An almost 30 percent slide in Glencore Plc shares in the previous nine days has raisedquestions on whether the trader and producer, which has already sold assets and cut output, needs to do more. The stock was up 4.4 percent on Wednesday. New-home prices in China increased in 27 cities, 12 fewer than in September, the National Bureau of Statistics said Wednesday. Prices dropped in 33 cities, compared with 21 in September, and were unchanged in 10. The country consumes about 40 percent of the world’s copper and half its aluminum. On the LME, copper was last down 0.6 percent at $4,655.50 a ton and aluminum added 0.3 percent to $1,478 a ton. by Agnieszka De Sousa original story at: http://www.bloomberg.com/news/articles/2015-11-18/zinc-slumps-to-six-year-low-as-metals-tumble-on-china-dollar You can now find Tand W Castings at an additional address zincdiecastinguk.co.uk as of today.
Although tin closed solidly higher on Friday (+1.6 percent), the rest of the complex posted a muted performance. Zinc and nickel were up 0.4 percent and 0.3 percent respectively, while copper was down 0.7 percent, followed by lead, down 0.5 percent, and aluminium, down 0.2 percent.
Precious metals were markedly down on Friday and on the week, with gold and platinum setting new 2015 lows (weekly basis), on the back of renew deflationary pressure stemming from strong energy price declines. The PGMs suffered the most, with platinum and palladium down 2.7 percent and 3.6 percent, while gold remained unchanged, and silver was off 0.5 percent. This morning, base metals are pushing marginally higher amid thin volumes, posting an average gain of 0.1 percent at the time of writing. Apart from tin, which is the only base metal to post a loss (-0.7 percent), the rest of the complex is either flat or in the green. Nickel is up 0.4 percent, followed by zinc and aluminium (+0.3 percent each), while lead is up 0.1 percent. Copper remains unchanged. The precious metals complex is trading much firmer, led by platinum (+1.8 percent), followed by palladium (+1.7 percent), while gold and silver are up 0.9 percent and 1.2 percent. This could reflect some short-covering activity amid high geopolitical tensions following the horrific attacks in Paris this weekend and the subsequent France’s decision to launch “massive” airstrike on the ISIS stronghold of Raqqa in Syria. In Shanghai, the November base metals contracts are edging slightly higher, posting an average gain of 0.2 percent at the time of writing. Copper is the only base metal in the red and a fortiori the worst performing (-0.5 percent). Aluminium is up the most (+0.7 percent), followed by zinc (+0.6 percent), and lead (+0.2 percent). Nickel and tin are up 0.1 percent each. Meanwhile, spot copper in Changjiang is down 0.8 percent at Rmb 36,300-36,420, while the contango with the futures is at $1.56 per tonne and the LME/Shanghai copper arb ratio is around the parity at 1 to 7.52, unchanged from Friday. The precious metals complex is trading firmer, with gold and silver up 1.3 percent and 0.7 percent. Bonds – US government bonds rose sharply on Friday, pushing yields lower, marking their biggest weekly decline since the middle of October, partly due to disappointing retail sales and PPI for October, a sharp decline in equity markets, and lower oil prices, prompting investors to move to safe-haven assets. Against this backdrop, the US 2-year yield closed 3.59 basis points (4.12 percent) lower at 0.83 percent and the US 10-year yield edged 4.58 (1.98 percent) down at 2.26 percent. European government bonds also finished much higher, likely driven by growing expectations that the ECB will expand the pace of its QE program following disappointing Q3 GDP figures, with GDP growth in the euro area slowing to 0.3 percent in the third quarter of 2015, compared with 0.4 percent in the second quarter. In this context, the Germany 10-year yield closed 5 basis points (or 8.22 percent) down at 0.56 percent, while the France 10-year yield edged 5 basis point (or 5.41 percent) lower at 0.87 percent, its lowest level since the start of the month. Equities – Broad equities extended their decline on Friday amid a return to a risk-off environment, with the Euro Stoxx 50 down 0.80 percent, marking its lowest level since October 22, driven by poor European data. US equities finished lower for the third straight day, led by a sell-off in the retail sector on the back of disappointing earnings. The Dow Jones edged 1.16 percent down and the SP 500 closed 1.12 percent lower, posting their largest weekly losses in three months. In Asia this morning, equities are facing selling pressure. In Japan, the Nikkei 225 is down 0.87 percent, partly triggered by disappointing Q3 GDP growth (-0.2 percent versus -0.1 percent expected). The CSI 300 is down 1.29 percent, the Hang Seng is off 1.48 percent and the Kospi is down 1.41 percent. It is worth pointing out that the futures markets also point to strong declines in European and US equities at the open later today, as investors are likely to reduce their exposure to risky assets amid rising geopolitical tensions. Currencies – The dollar posted some gains against most currencies on Friday, albeit modest given the release of weaker-than-expected October retail sales (+0.1 percent from September, versus +0.3 percent expected). But it is worth noting that the dollar posted a small weekly decline following a strong weekly gain last week, as recent US economic data appear to have kept Fed tightening expectations unchanged, with the 30-day Fed-funds futures currently pricing in a 70-percent probability for a lift-off in December. In this context, the US dollar index, as measured by the DXY, was up 0.35 percent on Friday, trading near its 8-month high. The greenback was up against the euro, the yen, the sterling, the Canadian dollar, the Brazilian real, and the Mexican Peso, but was slightly down against the Aussie and the Kiwi. This morning, the DXY is slightly up 0.08 percent at 99.08. The economic agenda is fairly light today. Economic data released this weekend indicated that Japan’s Q3 preliminary GDP fell by a weaker-than-expected 0.2 percent, while Q2 GDP growth was upwardly revised to -0.3 percent from -0.4 percent. Economic data released later today will include in Europe, final (core) CPI for October, and in the US, the Empire State Manufacturing Index for November. Market participants will also pay a close attention to ECB President Draghi’s speech at the European Roundtable of Industrialists Plenary Session. Base metals will continue to face downward pressure, we think, as the return to a risk-off environment may force investors to further reduce their exposure to the complex. We believe that copper, lead, and zinc are the most vulnerable to the downside after having reached new fresh year lows last week. Precious metals are also vulnerable, we think, although gold and silver could receive some safe-haven bids in the near term reflecting a pick-up in geopolitical risks. Further, gold and silver are close to strong support levels, which could thereby induce a bout of short-covering from these current price levels. Finally, although a majority of market participants continues to expect a Fed rate increase in December, we do not discount the possibility of renew market turbulence, especially in the EM world, which could alter the current market view and thus provide some support to metals. Overnight Performance GMT05:15+/-+/- %Lots Cu4808-1.50.0%2200 Al149440.3%384 Ni9455350.4%215 Zn1622.55.50.3%189 Pb161020.1%80 Sn14685-105-0.7%5 Steel 30000.0%Total Average (BM ex-Steel)0.1% 3,073 Gold1093.39.40.9% Silver14.40.171.2% Platinum869.115.11.8% Palladium545.29.21.7% Average PM 1.4% SHFE Prices 05:15 GMT Change% Change Cu36310-170-0.5% AL 10175750.7% Zn13040750.6% Pb12650200.2% Ni73120900.1% Sn90310600.1% Average change (base metals)236.5 0.2% Rebar1757-41-2.3% Au227.852.951.3% Ag3272230.7% Economic Agenda GMTCountryDataACTUALExpectedPrevious WeekendJapanPrelim GDP q/q-0.2% -0.1%-0.3% WeekendJapanPrelim GDP Price Index y/y 2.0%1.7%1.5% 10:00amEuropeFinal CPI y/y 0.0%0.0% 10:00amEuropeFinal Core CPI y/y 1.0%1.0% 10:15amEuropeECB President Draghi Speaks 11:00amEuropeGerman Buba Monthly Report 1:30pmUSEmpire State Manufacturing Index -5.3-11.4 Posted on November 16, 2015 by Boris Mikanikreza The zinc price also jumped on the news, climbing 12.5 percent. That's its largest one-day jump in over a decade and a two-month high.
|
Details
Archives
June 2016
Categories
|