DAILY ROUND-UP – FastMarkets on physical premiums and LME Week Asia

A round-up of the top FastMarkets stories from June 14. 

The London Metal Exchange (LME) and its parent company Hong Kong Exchanges & Clearing (HKEX) are listening to concerns voiced by their members, but do not react to threats.

The LME’s experience and brand name will help the Hong Kong Exchange and Clearing’s (HKEX) plan to build a spot trading commodity platform in Qianhai in Shenzhen, China, Charles Li, chief executive of HKEX said at LME Week Asia in Hong Kong.

The LME may re-examine its fee structure on certain charges, but the complaints that fees are too high are a myth, parent company HKEX CEO Charles Li said.

Lower first-quarter revenues at the LME were symptomatic of a downturn in the global economy and were not simply a reflection of higher fees or exchange dynamics, CEO Garry Jones said.

The HKEX is not looking to change the ‘DNA’ of the LME even as it looks to financialise the LME, said Charles Li, chief executive of HKEX at LME Week Asia in Hong Kong.

Copper premiums in Shanghai will recover from the end of this month should the nearby spreads remain in contango while temporarily tight supply of cathode lends support, market sources said.

Warehouse and logistics reforms would be the key factors for a more mature Chinese commodities markets, panel speakers said during LME Week Asia in Hong Kong.

Aluminium market participants are extremely sceptical about reports claiming major Chinese smelters would cut production if domestic prices drop below 11,500 yuan per tonne.

Aluminium took centre stage in the physical metal markets this week – movements in London Metal Exchange forward spreads and global oversupply worries pushed its premiums lower in all regions.

Base metals ranged routinely at mostly lower levels during the Tuesday LME sessions, with sentiment dulled by a firmer dollar and easier equity markets – a trend that is likely to continue in the short term.

Cerro Matoso ferro-nickel mine will strike indefinitely as of 15:00 local time (21:00 BST) today after last-minute talks on higher wages between union representatives and the company broke up without reaching an agreement.

Expected tightness in the zinc market has prompted Macquarie to upgrade its price forecasts for the metal.

 

Will Adams

About Will Adams

William Adams has been involved in the metals markets since 1982 – he has experience in many areas of the market from researching to trading and has worked in London, New York and Tokyo.