Zinc Inventories Pull back in China Major Markets - 3 July 2017

Commodity Intraday Tips
Gold down in Asia after surprise upbeat Caixin June PMI.
Gold dipped in Asia on Monday after a surprise upbeat reading in the China Caixin PMI in June. Caixin's China manufacturing PMI for June beat expectations, offering hope the world's second-largest economy continues to defy expectations for a slowdown. Last week, gold prices were lower at the close on Friday and posted their first weekly decline since March as a rise in global bond yields curbed investor demand for the precious metal. The precious metal still ended the first half of the year with a gain of 8%, boosted by a decline in the dollar to its lows of the year. Gold prices came under pressure amid indications that several major central banks around the world are getting ready to join the Federal Reserve in tightening monetary policy.  Hawkish signals from foreign central banks contrasted with doubts over whether the Federal Reserve will be able to hike rates again this year given a recent batch of weak U.S. economic data and growing skepticism that the Trump administration will be able to deliver
on its pro-growth agenda.

Zinc Inventories Pull back in China Major Markets, SMM Reports.
Zinc inventories in both Shanghai and Tianjin fell, while those in Guangdong added. Supplies in Guangdong were steady. Downstream buyers lacked buying interest since they had built some stocks previously. Inventories fell in Tianjin because of fewer arriving shipments from Zijin Mining. Besides, production at galvanizers recovered after environmental protection inspections in north China. Downstream producers purchased as needed.

Chinese Aluminum Smelters to Face Rising Power Costs, SMM Expects
Rising coal prices will add to power costs at aluminum smelters in China that have captive power plants, SMM understands. The Bohai-Rim Steam-Coal Price Index rose for three weeks in a row, albeit at a slower pace. Chinese Authorities to Examine Captive Power Plants at Aluminum Smelters in Six Major Producing Provinces    

Oil prices rise on first drop in U.S. drilling in months.
Oil prices rose on Monday, lifted by the first fall in U.S. drilling activity in months, although gains were capped by reports of rising OPEC output last month even as the group has pledged to cut supply. Prices were lifted as drilling activity in the United States for new oil production fell for the first time since January, dropping by two rigs. Australian futures brokerage AxiTrader said on Monday in a note that this was "the first crack in the resolve of U.S. shale oil to continue to ramp up production regardless of the big fall in price" earlier this year. U.S. crude futures fell 9 percent during the second quarter that ended in June while Brent futures declined 9.3 percent. That extended first-quarter losses for the contracts.

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