Base metals received a further boost on Wednesday November 9 after Donald Trump pulled off a stunning victory in the race for the US presidency.
All were in positive territory in morning LME trading, with the three-month nickel price climbing 6.69% from trough to peak, copper 6.4%, lead 3.3%, zinc 3.29% and aluminium 2.43%.
“Trading has gone through the roof. Regardless of what you think of Trump, the volatility is good for brokers. There has been plenty of technical buying going through on these price moves,” a trader said.
Trump’s promise to spend massively to overhaul the country’s crumbling transport, telecommunications, water supply and electricity systems will boost demand for metals, market observers said.
A softer dollar is underpinning the increases – the dollar index at 97.69 was down 0.2%
Volumes on Select have been huge. Around 66,000 lots have traded across the complex on Select so far, the bulk in copper at more than 30,000 lots.
“Strap yourself in – things could get messy, especially after the US return later this afternoon,” a second trader added.
The three-month copper price peaked at $5,433 per tonne earlier, its strongest since June 2015. Recent trade at $5,386 per tonne was still up $50.50 on Tuesday’s close.
“Miner/smelter price fix selling was also seen as they sought to lock in value on assets yet to be brought out of the ground. [It is] not surprising that they do this after nervously watching the price stay below $5,000 for so long,” Triland noted.
In stock moves, 15,775 tonnes were placed back on warrant mainly in listed warehouses in Asia, reducing cancelled warrants to 112,775 tonnes. Inventories fell a net 9,025 tonnes to 282,600 tonnes, a move again centred on Asia.
The three-month aluminium price at $1,739 per tonne was up $8 – it had hit a June 2015 high of $1,746 per tonne earlier. Stocks fell 4,125 tonnes to 2,116,600 tonnes and cancelled warrants fell 2,875 tonnes to 774,225 tonnes.
The three-month nickel price hit a fresh 2016 high at $11,560 per tonne – recent trade at $11,510 per tonne was up $250. Stocks slipped 192 tonnes lower to 363,162 tonnes and cancelled warrants rose 1,152 tonnes up 122,826 tonnes.
The three-month zinc price climbed above $2,500 before settling at $2,495 per tonne, still up $18. Stocks fell 775 tonnes to 447,800 tonnes.
The three-month lead price was recently at $2,144 per tonne, an increase of $19 and the highest since September. Stocks and cancelled warrants were both 325 tonnes higher at 187,725 tonnes and 31,400 tonnes respectively.
The three-month tin price recently traded at $21,620 per tonne, up $75. Stocks rose 150 tonnes to 3,035 tonnes, with metal arriving in Singapore. The backwardation in the benchmark cash/threes spread has eased to $103 per tonne from $145 at the end of last week.
Still billet, cobalt and molybdenum were neglected.