Non-ferrous metals market will face a big challenge

Since the beginning of may, the global slump in the bond market, bond yields in Germany, the euro against the dollar rebound quickly, from the lowest point, the highest rebounding is close to 9%. Hedge funds gradually withdraw the original positions, the previous shorting the euro, do more dollar assets strategy positions at the same time, the higher the euro against the dollar, the dollar assets and sell-off. Dual factors larger negative pressure against the dollar. As the dollar index depth correction, commodity respite. But this week, before the rebound suddenly encountered on the brakes. In dollars for several days, with a strong rebound in commodity, slumped, none escape by luck, the silence of non-ferrous market to a concern.

To transfer the line of sight to copper, fell 2.5% in one day really incredible. At the LME Asian’s annual meeting this week, attending the news, thought at present the main market participants for base metals overall outlook remains bearish, metal prices more affected by the macro policies and expected changes, especially combined with the real estate policy stimulus and bullish sentiment, the rebound in the short term metal prices too fast.

We are on the analysis of the copper market, short-term recovery of the real estate market gave rise to all varieties of cyclical rally, combined with the central bank easing, investors once the copper to great optimism, from international capital flows, speculative funds last week began to show more than a small net copper position. But at the same time, China’s macroeconomic data is not optimistic, liquidity remains tight. In fact, the fundamentals of copper itself does not change too much, supply growth did not occur previously expected, after a rebound at the bottom of the wave, if the second half of the weaker demand data, the copper price is probably low.

To compare the aluminium, aluminium as a long-term underachieving varieties at home, with the modification regular to LME warehouse, warehouse significantly raise the cost of inventory, warehouse backlog of aluminium inventories outflows. Lines of pickup to once, have improved sharply. London aluminum backwardation in within three months from $400 / ton fell to $100 a tonne, more declines in its future will there be? Don’t ever forget, in China there are lots of spare capacity, prices slightly better will restart capacity within two to three months, still can flow from domestic to abroad, it is bound to further lower outside dish aluminum backwardation.