Base Metals forecasts, China’s demand; Weekly overview

U.S. GDP Statistics & Data

By the official info which came out today, the U.S. economy grew faster than initially reported. Observing the period of the first three months of 2017, statistics data show that U.S. economy actually reached the levels among expected. It eased concerns about a potential slowdown in the U.S. trading & economic movements.

According to the Bureau of Economic Analysis’s, GDP went up at an annualized rate of 1.2% in the first three months of 2017. Which makes it well above the previous reading of 0.7%. The 0.7%  was the slowest period of economic growth since 2014.

 

Currencies & commodities

The dollar peaked to a four-day high. Meanwhile it pressured commodity prices across the broad. Mostly as expectations for a June rate hike rose to its highest level this week .

Commodity prices went up, lead by strong dollar’s growth. Which gives the support to the opening markets in Tuesday. Having in mind that Monday is the Memorial Day, and the trading is closed. Tuesday will hopefully be the green light for most of the base metals. Supporting their prices and giving the traders green light for doing businesses.

The GDP growth, which was stronger than expected, can easily lead to the higher commodity prices on Tuesday. The construction power in U.S. as one of the world’s most important economies, could definitely lead to higher demand for base metals.

More than 80% of market participants expect the Federal Reserve to boost its benchmark rate in June, compared to below 70% of traders in the previous week.

The U.S. dollar index rose by 0.20% to 97.34. Which is a very positive movement compared to the previous couple days. When dollar index was facing a downward trends, and that way causing the negative market ambience.

Most noteworthy, copper price saw a downwards trend today, falling for 1.14% to $2.568. Observing the natural gas volatility, it actually rose by 0.76%. Gaining levels of  $3.30.

 

China’s Base Metals Demand

Based on the numbers which show China’s statistics & base metal imports, as well as its use of the base metals in industry, it is likely possible that Q2 & Q3 global base metals market is going to be impacted by China’s strong demand.

Industrial metals markets slightly improved in China, which could possibly lead to the price trends to become higher.

The prices of base metals today were in an upwards trend. Both base metals prices and ferrous metals prices have been positively affected.

China’s role in the industrial metal markets is clear. China has a huge stake in the global output, which depends on its production. But it also has a huge impact in markets if it shows that China’s capacities need more of commodities to cover its needs in terms of demand. Therefore, monitoring trends in the Chinese economy is very relevant.

Beijing is providing its policy of recovering the environment & gaining lower levels in production of base metals if possible. That is causing China to import more of the metals from overseas, in order to fulfill its capacities. Which will probably lead to the higher base metal prices at the start of Tuesday’s ”journey”.

As mentioned before, Monday the 29th is Memorial Day. It is the United States Holiday. It is holiday also for China, due to Dragon Boat Festival. While the U.K. celebrates the Bank Holiday.

By | 2017-05-26T18:40:01+00:00 May 26th, 2017|International|0 Comments

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