Trade War, Hurricane Dorian, Nickel, Supply Issues – Abans Group

Trade war shows signs of cooling, Hurricane Dorian to affect oil production & Nickel at multi-month highs over supply issues in Papua New Guinea

24th Aug – 30th Aug

1. US Federal Reserve Chairman Jerome Powell concerned about global economic condition

Aug 24, 2019

At the annual Jackson Hole Summit, US Federal Reserve Chairman Jerome Powell has said that the global economic outlook has been deteriorating and that the Federal Reserve will act appropriately to sustain the expansion. Mr. Powell sounded concerned about the US trade war with China and the European slowdown but emphasized that the US economy is close to both its goals of achieving price stability and full employment.

Source: Bloomberg

2. Hedge Funds and Money Managers increased their bullish stance in COMEX gold

Aug 26, 2019

Hedge Funds and Money Managers increased their bullish stance in COMEX gold. According to the latest CFTC data for the week ending August 20, net long positions for gold futures rose by 9,903 contracts to 299,993. Speculative long positions gained +6,071 contracts, while shorts dropped -3,832. 

Source: Economic Times

3. China’s copper concentrate imports rise to all-time highs in July

Aug 25, 2019

China’s refined copper cathode imports rose 37.6% in July from the previous month to 292,201 tonnes. China’s imports of copper concentrate rose to an all-time high in July, exceeding 2 million mt for the first time. This was up 12.6% from July 2018 and over 40% from June as smelting capacity in China spiked. About 1.47 million mt of copper concentrate was imported from China in June, the lowest in 2019, and far below the monthly average of 1.8 million mt in the first half of the year.

Source: Reuters

4. RBI approved the transfer of Rs. 1.76 lakh crore dividend to government, much higher-than-expected

Aug 28, 2019

RBI approved the transfer of Rs. 1.76 lakh crore dividends to the government, which was much higher than expected. Huge transfer of dividend erases concerns of fiscal slippage from the newly announced FPI tax sops along with an infrastructure boost and recapitalization of banks. The amount of transfer this year is more than double the 680 billion rupees that have been provided in the previous year.

Source: Outlook India

5. Hurricane Dorian forecast to become highly dangerous on Sunday, may affect oil production

Aug 30, 2019

Hurricane Dorian reaching towards Florida has increased fears that offshore US crude producers may slow output if the storm passes into the Gulf of Mexico over the weekend. It is forecast to strengthen and become a highly dangerous Category 4 hurricane on Sunday.

Source: CNBC

6. US Crude oil inventory drops to lowest levels since Oct’18

Aug 28, 2019

Crude inventories fell 10 million barrels in the week ending Aug 23rd, compared with analysts’ expectations of a decrease of 2.1 million barrels. Oil inventories have reached their lowest levels since October. At 427.8 million barrels, U.S. crude oil inventories were at the five year average for this time of the year.

Source: Reuters

7. LME Nickel at multi-month highs over supply issues in Papua New Guinea

Aug 30, 2019

Shanghai nickel prices hit an all-time high, while nickel prices on the LME are at multi-month highs following a waste spill at a nickel plant in Papua New Guinea, which sparked fears of supply shortage. This plant is facing compensation claims and possibly closure after it spilled waste into a local bay. This plant produces approximately 35,000 tonnes of nickel, equivalent to 23% of the metal held in London Metal Exchange inventories.

Source: Reuters

8. Trade war is cooling down as China indicates not to retaliate now on new US tariffs

Aug 29, 2019

China has indicated about not retaliating against the latest US tariff increase announced by US President Donald Trump last week, emphasizing the need to discuss ways to de-escalate the trade war between the world’s two largest economies. Stocks across Asia pared losses and European stocks turned higher with US equity futures after this comment.

Source: Business Standard