Stocks

aStockDay2017-03-31

The charts above show the 3M price and LME opening stocks for Copper, Aluminium, Nickel, Zinc, Lead and Tin. For ease of comparison the LME price and stock level are plotted on the same chart. LME Price (LHS y axis, black line) and LME Stock (RHS inverted y axis, blue line).

  • The daily report looks at the LME Base Metal 3M prices and the 3M minus Cash Spreads over a period of the last 120 days.
  • These prices are then compared to price models that are constructed from fundamental drivers that move the Base Metal prices.

The Price Drivers considered by MPA for the daily models are

  • (i) LME exchange stocks.
  • (ii) the rate of global Industrial Production growth (source CHR’s “Global IP Watch”) .
  • (iii) Euro to Dollar exchange rate (EURUSD), for the strength / weakness of the dollar.
  • (iv) the price of Brent Crude oil (BZ), energy being a significant input cost in the supply curve.
  • (v) the iShares 10-20 Year Treasury Bond price ETF, as a proxy for Treasury Bond strength.
  • (vi) the Dollar to Chinese Yuan Exchange Rate (USDCNY).

The LME base metal prices are expected to be supported by low exchange stocks, high y-o-y global industrial production growth, high energy prices and a weak American dollar. The iShares 10-20 Year Treasury Bond price ETF (a proxy for Treasury Bond price strength) and the Yuan may also play a contributing factor.

The Stock Charts are shown on page 14 of the Daily Report.

Charts of the other Drivers are shown on the Drivers page.