News

3 December 2015

Cost of non-ferrous metals goes down

At the end of November, a decrease in the cost of non-ferrous metals was observed on the London Stock Exchange. The strongest drop was experienced by nickel . Its price fell to a 12-year low. Analysts at Commerzbank talk about the low demand for metals from the PRC. This trend is based on little interest of the authorities in the rate of lending to companies. According to experts, the government of China does not plan to continue to support all producers-debtors. To date, there is an assessment of the sustainability of companies. Particular attention is paid to enterprises that are dependent on bank loans and government subsidies. Apparently, some of them are on the verge of ruin. As a result, low demand and deflationary trends are possible against the background of limited credit practices.

The hedge funds act as an influential factor. The cost of nickel fell below the "resistance levels" not so long ago. At the same time, consumers do not understand how much the process depends on the funds. This is a kind of vicious circle. The cost falls when the funds are sold, but the funds are sold when prices fall. A representative of RBC Capital Markets is confident in the subsequent "rebound" of nickel in the near future. It is possible that copper is also "resold". Its cost stopped at the border of 4500 USD / ton.

25.11.2015 year on the stock exchange there was a rise in prices. It occurred on the basis of rumors about a reduction in nickel smelting by the Chinese leaders. Discussion of the situation will determine the measures necessary to take action. It is possible that the situation with zinc will repeat. Recently, Chinese manufacturers have decided to reduce its production in 2016 by 500,000 tons. However, in the course of continuing trades, the drop in the cost of non-ferrous metals stopped. Specialist Kingdom Futures Malcolm Freeman believes that there is a "technical correction". Those wishing to sell - sold. As a result, even a low percentage of purchases retains some stability. At the same time, according to Freeman, as a whole, the situation did not change much. Prices at any time can go down.

11/26/2015, the bidding for LME started with an increase in prices. Growth was observed against the background of the requirements of CNIA to organize reserves of copper , indium , zinc and aluminum . Comments of CNIA officials are absent. However, the roar participants mention the upcoming purchases of the State Reserve Bureau of China. The rumored list includes 900,000 tons of aluminum , 400,000 tons of zinc , 30,000 tons of nickel , 40 tons of indium .

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