SMM Copper Demand Surprise Index: China Copper Demand to Fall in May 2017 - 16 May 2017

Commodity Intraday Tips

Gold trades higher but remains under pressure,
Gold prices traded higher on Monday, as weaker than expected U.S. manufacturing data weighed on the dollar, which underpinned an uptick in commodity prices, while geopolitical concerns over North Korea resurfaced. The softer manufacturing print weighed on the dollar index, which dipped 0.21% to 98.84, and underpinned an uptick in the commodity prices.Dollar-denominated assets such as gold are sensitive to moves in the dollar – A dip in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand. Gold snapped a three-week losing streak last Friday, despite investors’ expectations that the Federal Reserve is poised to increase its benchmark rate in June. According to investing.com’s Fed rate monitor tool 70% of traders expect the Federal Reserve to hike its benchmark rate in June.

SMM Copper Demand Surprise Index: China Copper Demand to Fall in May 2017.
Cochilco The final SMM Copper Demand Surprise Index (SMMCDSI) was -30.65 in March, below preliminary reading of -30.65, and the final index was -24.53 in April, better than preliminary data of -43.09. SMM expects the index to come in at -29.53 in May as downstream demand will be negatively affected by the upcoming off-demand season.In April, large domestic copper tube/pipe producers ran at full rates thanks to robust demand from home appliance sector, and production at copper plate/strip, sheet and foil producers held stable, according to SMM survey.   LME Lead to Set with Losses.LME lead rallied slightly from lows but met strong resistance from the moving averages. LME lead will drop slightly on Tuesday and trade at USD 2,110-2,140/mt, and SHFE 1706 lead will drop sharply with price range at RMB 15,550-15,900/mt. In China’s domestic market, spot lead should drop RMB 50/mt and trade at RMB 15,85015,950/mt on Tuesday.

Crude holds gains in Asia as market welcomes Saudi, Russian views.
Crude prices held gains into Asia on Tuesday in an upbeat welcome for a pledge by Saudi Arabia and Russia to extend production cuts through March of next year if other key producers go along. Investors’ concerns regarding a possible deal extension were eased on Monday, as top exporter Saudi Arabia and Russia supported the idea of extending the current supply-cut agreement for a period of nine months, until March 2018.OPEC is expected to decide at talks on May 25 whether to extend the current deal to cut production. Crude futures dropped to November 2016 lows in late April.

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