Singapore 27/09/2016 - Most base metals on the London Metal Exchange rose in Tuesday’s pre-market, with nickel rebounding after an initial muted response to newswire reports that the Philippines has ordered another 20 more mines to be suspended.
Nickel had stayed in negative territory after the Philippine mining audit result news were out but it soon rose to as high as $10,635 per tonne, up $105 from Monday’s close. Around 3,900 lots have changed hands so far.
Only ten mines - out of the Philippines’ 40 – had passed the country environmental audit, and should the 20 be eventually halted, it will bring total closures to 30, Reuters reported.
Of the 30, 18 are nickel producers that account for 55.5 percent of the country’s total nickel ore output based on last year’s production, the newswire said.
“Nickel prices have rallied strongly in recent months in anticipation of the mining suspensions so the news may be in the price, but the determination of the new government seems to suggest that they mean business,” William Adams, head of research at FastMarkets, said.
“As such, we do expect the impact to be long lasting and therefore see this as being medium term bullish, although given nickel stocks we do not see any shortage developing – it will just depend on what price the stockholders are willing to sell at.”
In economic data, Chinese industrial profit growth picked up speed, growing 19.5 percent year-on-year in August, versus an 11 percent growth in July. This was also the highest rate of growth this year.
Year-to-August profits increased 8.4 percent year-on-year, a rise of 1.5 percentage points from growth in January-July.
The increase comes on overall improved sales and prices, and lower costs in August, as well as a boost from the automotive, steel and oil processing industries, and low base, the country’s National Bureau of Statistics said.
But the NBS downplayed the strong growth noting that it was mostly due to the low base last year.
The foundation supporting companies’ growth in efficiency is not solid, domestic and overseas demand remains lacking, companies’ payment terms for accounts receivable are long, and traditional industries - especially those with overcapacity - continue to operate with difficulties, the Bureau cautioned.
Earlier today, the first US presidential debate between Donald Trump and Hillary Clinton took place in New York.
Clinton’s performance was “studied and measured”, which was needed to help stop the erosion she has seen in the polls in recent weeks, while Trump “showed little grasp of policy detail”, the Wall Street Journal said in post-debate analysis.
In recent decades, these debates have not tended to shift the balance of popular opinion greatly, but with an unusually high proportion of undecided voters in this campaign, they may prove decisive in 2016, Credit Suisse said in a report on Tuesday morning before the end of the debate.
“A Trump victory, seemingly a remote possibility a few months ago, is a far more realistic prospect today,” it said.
“Markets are likely to react to the debate’s outcome and market consensus is that a strong Trump is likely to be perceived as a negative influence for global equities (greater policy uncertainty), while a solid Clinton performance seen as keeping the balance of probabilities in her (and the market-friendly status quo’s) favour.”
The US presidential election is expected to dominate market psychology for the next six weeks and how the debate impacts the candidates’ poll standings will be of interest.
The latest debate is the first of three debates before the November election - national polling averages published by The New York Times showed Clinton leading at 45 percent over Trump at 42 percent before the debate.
The second US presidential debate between the two candidates will take place on October 4 evening local time – Wednesday in Asian time zones – at the Washington University in St Louis.
The Dow Jones Industrial Average closed 0.91 percent lower at 18,094.83 before the debate. The Shanghai Composite is so far up 0.45 percent to 2,993.70 on Wednesday.
In currencies, the US dollar index rose 0.04 percent to 95.35 so far on Tuesday.
In other commodities, the Brent crude spot price rose 0.12 percent to $46.97 per barrel, and the Texas light sweet crude gained 0.09 percent to $45.70 recently on Tuesday.
US data due later on Tuesday includes S&P/CS Composite-20 HPI, flash services PMI, CB consumer confidence and the Richmond manufacturing index.
Other base metals continued to consolidate. Copper was last at $4,831, down $10 from the previous day’s close, with around 2,300 lots changing hands.
Aluminium eased $0.50 to $1,660.50, while zinc climbed $21.50 to $2,310.50. Lead gained $8.50 to $1,956, and tin rose $65 to $19,790.