Surprise decrease in US crude oil inventory; LME Zinc warehouse stock at a two decade low; Surging gold prices may dent Indian gold demand this Diwali

19th Oct – 25th Oct

1. Nickel prices touched a one-week high after authorities in Papua New Guinea shut down a nickel processing plant

Oct 24, 2019

Nickel prices touched a one-week high today after authorities in Papua New Guinea shut down a nickel processing plant following a slurry spill. The Papua New Guinea nickel plant is run by the Metallurgical Corporation of China. ShFE nickel ended up 3.4 per cent, while LME nickel rose 1.1 per cent on Thursday after this news.

Source: Economic Times

2. Energy Information Administration has surprised the market by reporting a draw of 1.7 million barrels

Oct 23, 2019

Crude oil prices rallied yesterday after the EIA reported a surprise drop in crude oil inventory. This drop was mainly due to a decline in US oil imports and an increase in exports. The Energy Information Administration has surprised the market by reporting a draw of 1.7 million barrels for the week ending October 18. Now, crude oil inventories are at the 433.2 million barrels mark, which matches the five year average for this season. Last week, the EIA reported a 9.3-million barrel increase in inventories, which kept prices lower throughout the week.

Source: Moneycontrol

3. LME Zinc warehouse stocks are near 2-decade lows

Oct 23, 2019

LME warehouse stocks, which were at 203,650 mt at the start of October 2018, now stand at 59,725 mt in Oct'19, which is a drop of more than 70% in one year. LME Zinc warehouse stocks are near 2-decade lows. On-warrant inventories in LME-registered warehouses fell to 35,125 tonnes, the lowest since at least 1998.

Source: Reuters

4. The global zinc market saw a 106,000-tonne shortfall over January-July

Oct 23, 2019

The global zinc market saw a 106,000-tonne shortfall over January-July, the International Lead and Zinc Study Group (ILZSG) said in a report released this week. The world's zinc mines lifted production by 1.9% in the first half of this year; however, world refined metal production fell by 0.4% over the same period.

Source : Reuters

5. New orders for US-made capital goods, other than defense equipment, fell more than expected

Oct 24, 2019

US government data showed that new orders for US-made capital goods, other than defense equipment, fell more than expected in September and shipments also declined. September capital goods orders declined by 0.5% against a forecast of a 0.2% decline. Also, August numbers were revised down by 0.2% to 0.6%. Gold prices rallied after disappointing data.

Source: Reuters

6. Boris Johnson called for a general election on December 12

Oct 24, 2019

Uncertainty on Brexit increased after UK Prime Minister Boris Johnson called for a general election on December 12. Johnson said he would ask lawmakers to vote on Monday on a motion calling for an early election. Britain's next scheduled election is in 2022. If Johnson wants an early election, he needs to win a vote in Parliament by a two-thirds majority, or lose a no-confidence vote.

Source: Bloomberg

7. Coriander hits 11-month high on robust demand

Oct 23, 2019

The most active November contract of coriander hit an 11-week high of 6,348 rupees per 100 kg on the National Commodity and Derivatives Exchange today due to robust demand ahead of the spot market holidays. Coriander production has been lower this year, and stocks are depleting.

Source: Cogencis

8. Surging gold prices may dent Indian gold demand this Diwali

Oct 24, 2019

The possibility of a good monsoon season improves production prospects of the Kharif crop for the year. The Kharif crop mainly depends on the monsoons; the prices of Soybean, Castor, Coriander, Jeera and cotton may drop marginally in the near term although El Nino conditions during the rainy season may increase volatility.

Source: Kitco