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5 May 2016
Commodities: mixed/bearish price action - ANZ
Analysts at ANZ noted the action in the commodities sector.
Key Quotes:
"Precious metals were lower. A slightly stronger USD saw gold edge lower, although investor interest remains strong. Gold rose early in the trading session after the ADP report showed a smaller-than-expected increase.
Energy was mixed. A stronger-than-expected build in inventories was negated by further supply-side concerns. EIA data showed US crude oil inventories rose 2.78 million barrels to 543.4 million barrels. Gasoline inventories also climbed higher (up 536,000 barrels). However, a wildfire in the oil sands regions of Canada is forcing many producers to cut output.
Bulks were weaker. Further weakness in the Chinese steel market continued to put pressure on iron ore prices. Inventories at China’s major ports rose 2mt to 100.3mt last week according to Umetal. This saw prices of billet come under pressure, falling another RMB100/t to trade at RMB2,290/t.
Industrials were lower. Disappointing manufacturing data this week continued to weigh on the market. Copper also came under pressure from further supply-side concerns. China’s largest copper producer, Jianxi, said that the recent output cuts have been offset by new capacity in the country. A group of smelters announced last December that refined copper output would be cut by 400kt.
Agriculture was mixed. Price action was choppy amidst a stronger USD. Corn fell to a one week low as better-than-expected weather raises the risk of a stronger harvest. Sugar rose to a five week high after a USDA reported indicated India’s crop could fall 7.9% next year."
Key Quotes:
"Precious metals were lower. A slightly stronger USD saw gold edge lower, although investor interest remains strong. Gold rose early in the trading session after the ADP report showed a smaller-than-expected increase.
Energy was mixed. A stronger-than-expected build in inventories was negated by further supply-side concerns. EIA data showed US crude oil inventories rose 2.78 million barrels to 543.4 million barrels. Gasoline inventories also climbed higher (up 536,000 barrels). However, a wildfire in the oil sands regions of Canada is forcing many producers to cut output.
Bulks were weaker. Further weakness in the Chinese steel market continued to put pressure on iron ore prices. Inventories at China’s major ports rose 2mt to 100.3mt last week according to Umetal. This saw prices of billet come under pressure, falling another RMB100/t to trade at RMB2,290/t.
Industrials were lower. Disappointing manufacturing data this week continued to weigh on the market. Copper also came under pressure from further supply-side concerns. China’s largest copper producer, Jianxi, said that the recent output cuts have been offset by new capacity in the country. A group of smelters announced last December that refined copper output would be cut by 400kt.
Agriculture was mixed. Price action was choppy amidst a stronger USD. Corn fell to a one week low as better-than-expected weather raises the risk of a stronger harvest. Sugar rose to a five week high after a USDA reported indicated India’s crop could fall 7.9% next year."