Clawing Back Some of Last Week’s Loss.
We could be witnessing aggressive short-covering today ahead of an event-packed week headlined by U.S. inflation data and the first Congressional testimony by the new head of the Federal Reserve on Tuesday and Thursday. A steady U.S. Dollar and oversold conditions are helping to boost gold prices shortly before the regular session opening on Monday. In other news, hedge funds and money managers raised their net long positions in COMEX gold and copper contracts in the week to February
20, U.S. Commodity Futures Trading Commission data showed on Friday. On Friday, the Fed also said that it sees steady growth continuing and no serious risks on the horizon that might pause its planned pace of rate hikes.
Zinc prices to stay supported on low inventory.
While not all downstream customers have resumed operations post-Chinese New Year, SMM believes zinc prices would stay firm due to the huge decline in LME inventory. Sources at Chinese miners and smelters were mostly bullish about zinc prices as they believe the domestic zinc concentrate output addition would be limited due to still strict environmental protection policy. Supply tightness remains as some miners have yet to come back from the Chinese New Year holiday and treatment charges (TCs) were low. Traders also expect zinc to stay firm as LME inventory continues to decline and as
downstream consumption recovers gradually and leads to destocking in China.
Producers weigh in on Mar nickel prices.
SMM expects nickel prices to remain firm in March and stainless steel prices to be range bound as consumption recovers with low output. We also spoke to a range of market participants in the nickel industry as they weighed in on the market post-Chinese New Year.
Oil Prices Flat Amid Mixed Signals.
Oil prices were flat Tuesday morning in Asia due to mixed cues from the Middle East, Asia and the U.S.Oil prices have zigzagged between mild gains and losses over the past weeks due to mixed cues. Saudi Arabia’s oil minister said on Saturday that the Kingdom hoped the Organization of the Petroleum Exporting Countries (OPEC) would ease production restraints next year after the current supply cut deal ends this year. In an effort to stabilize oil markets, OPEC has been curbing output by around 1.2 million barrels per day (bpd) since January 2017, and the pact would run until the end of 2018.
While the effort has helped somewhat to support oil prices, the U.S. has continued to increase its oil production, filling the gap in supply created by OPEC and thus pushing prices down. The U.S has increased its production by more than 20% since mid-2016 to more than 10 million bpd. At this rate of production increase, the U.S. is set to overtake Russia in crude oil output by late 2018, making it the largest global supplier.
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