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mfglobaldaily_2_21_11

mfglobaldaily_2_21_11

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Published by: marketpanic on Feb 21, 2011
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02/22/2011

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The information contained in this report has been taken from trade and statistical services and other sources which we believe are reliable. MF GlobalInc. does not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect judgments at this date and are subject to change without notice. The principals of MF Global and others associated or affiliated with it may recommendor have positions which may not be consistent with the recommendations made. Each of these persons exercises independent judgment in trading, andreaders are urged to exercise their own judgment in trading. © by MF Global Inc. (2010) 440 S Lasalle Street Chicago, Illinois, 60605.
LME DAILY METALS REPORT
MONDAY FEBRUARY 21 2011
1
mfglobal.com
Explanations for our table: High/low/close are official LME prices for the day prior; cash/3’s and the 3’s/15 spreads is the spread between the respectiveperiods, with a positive number reflecting a backwardation and a negative numbers reflecting a contango. Stocks (in MT) show inventories on hand for thecurrent day, along with changes from the day prior. Volume and open interest data are for the day prior, while the MAV refers to the 10, 40, and 100-daymoving averages. Shanghai prices are as of close of trading from the day priori; Shanghai stocks are in MT for the week indicated; please contact this writer forany further questions. *Arb differential number is derived as follows: LME 3-m copper in Yuan, including 17% VAT, minus SHFE third month;(+ would mean LME is over).
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------This market comment was written at 7:45 a.m. on February 21st, US east coast time...
Copper ended firmer on Friday, as investors brushed off Thursday's reserve requirement hike by the Chinese, and continuedto pile into base metals. However, for a change, the main action outside of copper, with aluminum, lead, and zinc, all postingsharp advances. Nickel soared on the news that Brazil's Vale said it will lose around 5% of its total 2011 nickel productiondue to a 16-week shutdown of a furnace in Canada, resulting in a loss of an estimated 15,000 tons of refined nickel andequivalent to 5% of total planned production in 2011.The focus of most markets today, particularly in equity and energy, is squarely on the rapidly deteriorating situation in theMiddle-East, where there were fierce clashes reported in Bahrain, Libya, and Yemen over the past 48 hours. The situation inLibya is the most confusing, since the press is not allowed in, phone connections are sporadic, and internet services havebeen cut off. However, from the accounts that have filtered in, there is heavy fighting in Benghazi, with some reports claimingthat security has all but collapsed, and that protesters are now in control of the city. There are now reports that the fightinghas now spread to the capital, Tripoli.In Bahrain, the unrest seems to be following the Egyptian pattern. A heavy-handed response by the military on Fridayapparently backfired, with the government ordering troops to retreat, thus enabling protesters to regain control of PearlSquare. Bahrain's Crown Prince has now been charged with "initiating a dialogue" with the protestors and seven opposition
EDWARD MEIR: + 1-203-656-1143
Senior Commodity Metals Analyst 
Email: emeir@mfglobal.com
As ofFeb. 18HIGH LOW CLOSE CSH/3 3’S/15
LME STOCKS(CH)
SUP RESIS RSIVOL(000)O/I(000)10MAV
9959
 
40MAV
9657
 
100MAV
8971
 
CU
9985 9780 9860+7
 
+144
411,475 (+3550)
9650 10190 54
 
146 298
AL
2569 2536 2568-29.75
 
-62.25
4621325(+28150)
2470 2570 63
 
284 6872528
 
2482
 
2407
 
PB
2667 2617 2667.5-4.5
 
+46
296,750 (-225)
2420 2712 62
 
28 1082585
 
2547
 
2455
 
ZN
2560 2545.5 2553-26
 
-39.5
708,675 (-100)
2320 2540 64
 
59 2332495
 
2421
 
2364
 
NI
29200 28355 29150-27
 
+1054
129,222 (-174)
23600 30000 72
 
23 97284912637324686
SN
32345 31600 32350-47
 
+310
17,540 (-70)
30000 35000 75
 
8.2 19.7318582874126955
NAA
2540 2505 2550-14.75
 
-41
136,960 (-80)
NA NA 65
 
1.7 7.62512
 
2438
 
2351
 
Shanghai Nearby Last (YUAN)74,630 (+780) 17,345 (+235)
 
20,420 (+475)
 
Shanghai Stocks as of Feb 18 CU: 161,062 MT(+16865) AL: 426,978 MT (-4378) ZN: 332,302 (+5682)LME/SHAN CUARB: +1283
CU AL PB ZN NI SN
2011 HIGH/LOW10190 / 9235 2575 / 2360 2712 / 2325 2547 / 2220 29095 / 23822 32799 / 257252010 HIGH/LOW9728 / 6035 2500 / 1828 2690 / 1535 2736 / 1577 27250 / 16975 27500 / 14850
 
 
2/21/2011
 
LME METALS DAILY REPORT
 
groups met on Sunday to consider what their next steps will be. Across the Gulf in Iran, there were reports of large andviolent demonstrations on Sunday, with posts on Twitter saying that some people are not backing down and fighting thepolice. As if all this were not enough, two Iranian navy ships are en route to Syria today, having been granted passage by theEgyptians. It remains to be seen to what the Israeli response will be towards these sailings, but we suspect that until thevessels return, the situation will likely remain tense. Even the Chinese seems to be jittery, with the authorities detainingactivists, increasing the number of police on the streets, disconnecting mobile phone text messaging services, and censoringinternet postings regarding a call to stage protests over the weekend. As far as we can tell, the campaign did not gain muchtraction.The "elephant in the room" that has the potential to
really 
ignite the markets is Saudi Arabia. Thus far, there have not beenany reports of protests, but we have to suspect that the Saudi government is watching the situation in Bahrain with sometrepidation.The weekend developments have hit Middle-Eastern equity markets hard, while Asian stocks were also down. US stockfutures are called to open lower after a sluggish performance in European equities, but actual markets will be closed here onaccount of the Presidents’ Day holiday. Oil prices are soaring, up around $3/brl, while gold is higher as well, with prices nowover the $1400 mark. Surprisingly, the dollar is restrained, now trading at $1.3670 against the Euro. Base metals are notparticipating much on the upside so far, as earlier gains have faded, and we now see modest declines across the board,except for zinc and nickel. Nevertheless, with such large-scale unrest sweeping the Middle-East, we think most markets willbe pulled higher over the days ahead, likely riding on energy’s coattails.In US macro news, nothing comes out on Monday, but on Tuesday, we get February consumer confidence readings(expected at 67), as well as the Case-Shiller 20-city price index for home prices (expected at -2.4%). On Wednesday, we getJanuary existing home sales (expected at 5.2 3 million units annualized), while Thursday brings us weekly initial claims data(expected at 410,000, unchanged from the week prior). We also get January durable orders (expected at 3%) , as well asJanuary new home sales (expected at 310,000 units). Friday brings us a second revision to fourth-quarter GDP, withestimates now projecting 3.3% growth, about .1% higher than the first reading. February Michigan sentiment readings arealso out Friday (expected at 75.1, unchanged from the month prior).Elsewhere, the world’s leading finance ministers and central bankers overcame Chinese objections over the weekend tostrike a compromise deal meant as a first step towards tacking global economic imbalances. The French finance ministersaid economic imbalance indicators would include domestic policies of all the G20 members, including public sector debt,deficits, and private savings rates, as well as external imbalances “composed of the trade balance and net investmentincome flows and transfers”. The choice of words was apparently designed to avoid any reference to “current account”imbalances, something the Chinese were objecting to. And instead of singling out exchange rates as a specific indicator – another Chinese objection– the ministers agreed to “take due consideration of exchange rate, fiscal, monetary and otherpolicies.” Separately, the meeting put a statement out with respect to the unrest in the Middle East by agreeing to “standready to support Egypt and Tunisia”. Under pressure from Saudi Arabia and China, however, the ministers stopped short ofstronger language supporting democracy.Elsewhere out of Europe, German business confidence rose to a record high in February, its ninth consecutive increase, andanother sign that the strong German recovery remains intact.In the world of premiums, a Reuters story out Friday says that traders expect premiums to remain firm over the course of2011. Aluminum premiums are at record highs, while grade A copper premiums in Rotterdam are about $60-95 over.Premiums for cut nickel were quoted around $400-$450 a ton, and lead premiums were at $65-75 a ton over. Zincpremiums were $110-120 a ton over, while tin premiums were quoted at $400-$600 over for Chinese material and $300-$525 for Malaysian tin.
The information contained in this report has been taken from trade and statistical services and other sources which we believe are reliable. MF Global Inc.does not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect judgments at thisdate and are subject to change without notice. The principals of MF Global and others associated or affiliated with it may recommend or have positions whichmay not be consistent with the recommendations made. Each of these persons exercises independent judgment in trading, and readers are urged to exercisetheir own judgment in trading. © by MF Global Inc. (2010) 440 S Lasalle Street, Chicago, Illinois, 60605.
 
 
 
2/21/2011
 
LME METALS DAILY REPORT
 
COPPER SUPPORT: $9650 / RESISTANCE: $10190
We are at $9837, down $28. We still seem to be fairly toppy around the $10,000 mark, and have had some trouble gettingthrough this point for some time now. Then again, copper has had a terrific run for the past few months, and it seems fundmoney is now piling into other metals that have been relative laggards. LME Stocks were up sharply again overnight on theLME (by 3550 tons) and may also be weighing on the market today.*
Japanese copper wire and cable shipments
rose 4.9% in January from a year earlier to an estimated 56,600 tons, anindustry body said on Monday, down from 56,739 tons in December.*
Zambia’s copper output
is expected rise to 900,000 tons in 2011 from 819,159 tons last year, the central bank said.*
US imports of brass mill products
were up almost 10% in December from the same period in 2009, reaching 39,968,404lbs and exports soared by almost 13% to 16,299,715 lbs, the
Copper and Brass Fabricators Council
said in its monthlyreport.--------------------
ALUMINUM SUPPORT: $2470 / RESISTANCE: $2570
We are now at $2568 on ali, up $1, but did get to a 28-month high of $2585 earlier in the day despite soaring stocks on theLME, up by another 28,000 tons overnight. Two days of closes above $2570-$2580 would look quite bullish on the chartsand may lead to yet another leg higher.
The information contained in this report has been taken from trade and statistical services and other sources which we believe are reliable. MF Global Inc.does not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect judgments at thisdate and are subject to change without notice. The principals of MF Global and others associated or affiliated with it may recommend or have positions whichmay not be consistent with the recommendations made. Each of these persons exercises independent judgment in trading, and readers are urged to exercisetheir own judgment in trading. © by MF Global Inc. (2010) 440 S Lasalle Street, Chicago, Illinois, 60605.
 

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