Skip to main content

Asian Metals Market Update: China is closed from 23rd January

There can be corrections in copper till $9000-$9100 is not broken. Lower price base is $8500. As long as copper trades over $8500, it will be keep on targeting $10,000 (by the first week of March). (X) A slower pace of rise will imply sustained rise with less number of price corrections. (XI) A faster pace of rise will imply frequent boom-bust type of price moves. Bulls will win only if price rise is slow and steady.

Chinese spending (within China and worldwide) will be closely scrutinized. Industrial metals and stocks will crash or sell off if and only if Chinese people spend way less than expectation. The selloff (if any) will only be temporary and should be used to increase inventory. A warmer winter in Europe has increased growth prospects and industrial metals demand chance in Europe. China+ Eurozone very high growth expectation for 2023 is the only the reason why industrial metals will rise and break all-time highs this year . I hope this does not turn out to be a damn squib.

China is closed from 23rd January (Monday) to 27th January (Friday). This will be followed by the FOMC meeting on 1st February. (2nd February for Asians). There will be position squaring and rebuilding from Friday for 2nd February FOMC meeting.

USA is closed on 16th January (Monday).

LME Copper Cash: (Current Market Price $9002.00)

  1. Support: $8728 and $8938
  2. Resistance: $9050 and $9270.70
  3. VIEW: Copper has to break and trade over $9050 to rise to $9270 and $9495.
  4. Sellers will be there only if copper trades below $8728.
  5. Copper will also crash if it does not break $9270.00 by 20th January.

LME Nickel Cash: (Current market price $27956.00)

  1. Support: $27050
  2. Resistance: $28825 and $29990, $30605
  3. VIEW: Nickel has to trade over 27658 to rise to $29990 and $30605
  4. Crash or selloff will be there if nickel trades below $27658 only to $27043 and $26492.

LME Zinc Cash: (CMP $3183.00)

  • Support: $3003 and $3096
  • Resistance: $3339.
  • VIEW: Zinc has to trade over $3096 to rise to $3339.
  • There will be a sell off only if zinc trades below $3096.

LME Aluminum Cash: (CMP $2477.00)

  • Support: $2425
  • Resistance: $2575
  • VIEW: Aluminum has to trade over $2425 to rise to $2575.
  • Key medium term resistance is around $2575.


GCH is proposing to replicate its spot coal indices in the nickel market with a refined metal index due to be launched by the end of the first quarter. All forms of Class I nickel will be traded on the company's platform, but the spot index will be defined by briquettes and full-plate cathodes, the two most liquid physical shapes. A daily settlement price will be derived from physical orders and trades across the front two months for deliveries to Baltimore, Jebel Ali, Amsterdam/Rotterdam/Antwerp, Singapore, Kaohsiung, Johor, Busan and Shanghai. The minimum transaction will be 20 tonnes, equivalent to a container.

GCH is headed by Martin Abbott, who was the LME's chief executive officer from 2006 to 2013, but the echoes from the past don't end there.

GCH operates globalCOAL, a trading platform for thermal and metallurgical coal with 3,000 registered users. Market members include the likes of Anglo-American, BHP, Jindal Stainless, ArcelorMittal, Glencore and Trafigura, all of whom are major players in the nickel supply chain.

GlobalCOAL, with pricing referenced to physical cargoes traded between producers, power operators, steel companies and trading houses, is a hark-back to the earliest days of the LME itself.

When the London metals market was first formally established in 1877, it was a way of pricing physical cargoes of metal heading to what was at the time the world's industrial power house.

The LME's arcane trading system still bears the imprint of its genesis. The unusual three-month benchmark price was born out of shipping times for Chilean copper and Malaysian tin. The bewildering multi-day rolling prompt system evolved from the vagaries of port arrivals.

The proposed new nickel index is in many ways a return to those basics, a price-discovery process based on physical shipments traded between industry players with direct skin in the pricing game.

GCH's business model is to license its indices to a futures exchange, which can expand a spot index into a full tradeable forward curve.

Its NEWCIndex, a benchmark reference point for thermal coal in the Asia-Pacific region, is used as the settlement price for the gC NEWC Futures contract traded and cleared by ICE Europe.

With an entire industry looking for an alternative to price discovery on the wounded LME contract, there will be no shortage of prospective futures partners if GCH's nickel index can establish itself.

The CME has been rapidly building out its industrial metals portfolio, but curiously has never offered a nickel product.

OUR VIEW ON THE ABOVE: I will be closely watching retaliatory measures by LME. LME will not sit quite. It will try to ensure that its supremacy as sole dictator of price of industrial metal continues. Interesting year ahead for industrial metals.

Full link


About the author

Average: 5 (1 vote)

Newsletter Signup

GoldSeek Free Newsletters
GoldSeek Daily Edition
Gold & Silver Seeker Report
Gold Seek -- Peter Spina