LME markets have fallen away again this week and to make matters worse the AUD/USD exchange rate has increased. Last week we noted that since 1 October the USD price of Aluminium and Lead had fallen 6.5%, and Nickel had fallen 9.5%. This week these decreases have moved to 9.4% for Aluminium, 10.2% for Lead and 15% for Nickel.
Later this morning Hurricane Sandy is expected to unleash havoc on the east coast of USA . About 50 million people from the Mid-Atlantic to Canada are in the path of the nearly 1,600-kilometre-wide storm, which forecasters said could be the largest to hit the mainland in U.S. history. The US stockmarket has closed for the first time since September 11 2001.
With China and USA both undertaking leadership votes, there is good reason for the LME participants to adopt a wait and see approach to metal trading.
**** Chinese smelters eye copper exports ****
The Financial Times Limited 2012. Chinese smelters are in discussions to export copper under annual contracts for the first time, according to people familiar with the plans.
The potential export contracts are a reflection of several factors, including a change in taxes on copper exports and an increase in Chinese smelting capacity. But they also highlight the downbeat sentiment in the Chinese copper market as the economy slows and warehouses in the country are groaning with copper stocks.
The slowdown in Chinese copper demand, together with sluggish growth in the rest of the world and the prospect of rising mine supply, has weighed on copper prices. Yesterday, benchmark copper on the London Metal Exchange fell to a seven-week low of $7,670 a tonne
**** DJ BASE METALS: LME Metals Fall as Macro Risks Loom **** By Francesca Freeman
At 1111 GMT, the LME’s flagship three-month copper contract was 1.2% lower on the day at $7,723.25/ton, leading the complex’s losses.
With the U.S. presidential election vote looming next week, investors are avoiding making bold bets on risk-related assets such as base metals, said market participants. Top metals consumer China is also facing a once-a-decade leadership change, starting on Nov. 8.
“LME copper is getting hammered by a general risk off mode due to political uncertainty,” said Gianclaudio Torlizzi, partner at metals consultancy, T-Commodity.