The stories in the press this week seem more focused on the stock market than the relatively quiet commodity & metal markets. With the markets in Shanghai only reopening yesterday after the Chinese New Year holiday week, the prices on LME have been steady with Copper trading within a USD100 range for the whole month of February.
On the exchange rate the AUD is now trading at 103.05 with most commentators predicting the dollar to fall further.
(*Disclosure Australian Frontline Machinery is part of the Sell & Parker Group!)
**** METALS-Copper hits 3-week low, global growth woes hurt **** By Melanie Burton SINGAPORE, Feb 18 (Reuters)
Shanghai copper fell to a three-week low on Monday as traders returning from a week-long break in China played catch up with recent losses in London prices, while signs of a weaker global growth also hurt sentiment. There were mixed signals from China as the top metals consumer returned from its Lunar New Year break on Monday — Shanghai copper futures fell more than 1 percent, tracking a similar loss in London copper last week, but Shanghai-based traders picked up bonded stock.
“China’s overall economy is still strong, so the appetite for base metals after Chinese New Year will gradually pick up,” said Helen Lau, senior commodity analyst at UOB-Kay Hian in Hong Kong said.
**** Banks unwind aluminium financing deals, others keen to enter **** By Susan Thomas and Maytaal Angel
LONDON, Feb 12 (Reuters) – Several big banks are unwinding the lucrative financing deals that tie up millions of tonnes of aluminium as collateral in warehouses, but the activity is flourishing as eager rivals enter it or expand.
For years a handful of banks have been buying up aluminium and simultaneously selling it forward for instant profit to futures market speculators, then taking advantage of cheap funding to store it at low cost in warehouses.
Aluminium financing deals can earn an investor an assured yield of at least 5 percent, not bad with interest rates around historic lows and with returns on equities and debt uncertain.
But banks across the world are cutting costs and selling off, or writing down, assets in a bid to meet tougher regulations aimed at preventing a repeat of the 2008 crisis.
Financing deals are believed by industry sources to have locked down around 90 percent of the roughly 5 million tonnes of aluminium stored in London Metal Exchange (LME)-registered warehouses – worth more than $9 billion at current prices. There is believed to be another 5 million tonnes held off exchange