① Luntong reached another record high. Although the long-term trend is clear, the short-term core hype factor is about to face the test of “flameout”. ② Industrial metals have collectively strengthened, driving black trading sentiment, and iron ore has also hit new highs in nearly three months under the impetus of policies; ③ Gold and silver continue to face fierce competition in the market.
Financial Services Association, May 21 (Editor Shi Zhengcheng) On Monday, global commodities, especially those closely related to industrial demand, generally ushered in a booming trading day.
According to the official closing price of the London Metal Exchange (LME) on Monday, Luntong closed up more than 2% to 10,889 US dollars/ton, rising above 11,000 US dollars for the first time in history during the early trading session. At the same time, many industrial metals generally rose. Among them, the closing prices of LME zinc and lead also rose more than 2% on Monday. Meanwhile, gold and silver continued to fluctuate widely, and iron ore futures, which are closely related to China's real estate demand, also rose to a new high of nearly three months on Monday.
Copper's rally will face a continuous test
Since the beginning of the year, LME copper has rapidly risen from 8,500 US dollars/ton to the latest high of $11,000, an increase of nearly 27%. The reason behind it is easy to understand, but the key is the continuation of this rally.
The first is the strong demand from the bulls for the fundamentals of copper demand. For example, a recent investor letter from Caxton Associates, a major macro-hedge fund, mentioned the “three supertrends” driving demand for this critical electricity metal — artificial intelligence, nationalist industrial policies (including defense spending), and established green energy investment trends.
Andrew Lowe, chairman of Caxton Associates, explained that what the three have in common is the demand for copper. The artificial intelligence construction of countries and companies will be similar to a modern arms race, and all regions will compete, which also means repeated investments. For a commodity such as (copper), where supply is in deficit, and supply growth is limited by various reasons, the future prospects are indeed interesting.
Of course, aside from long-term fundamentals, the increase in recent days is clearly related to the slump in the New York futures market, which will soon put recent gains to the test — according to media reports quoting people familiar with the matter on Monday, at least 100,000 tons of copper are being shipped to CME warehouses. This figure helps to quickly reduce the hype in the market.
According to data from the Comex exchange, the total net short positions as of last Friday were 7,525, corresponding to 85,334 tons. People familiar with the matter said that many bears have arranged to ship copper from Chile and Peru to the US, and are replanning some long-term contract plans. Also, there are some bears that are transferring copper from LME's warehouses. However, it is worth noting that Chinese and Russian copper, which accounts for two-thirds of LME inventory, did not meet Comex's delivery conditions.
According to transaction data, 17,000 tons of Chilean, Peruvian and Australian copper exempt from US tariffs were in LME inventory as of the end of April.
Iron ore also hit a recent high
September iron ore futures, which are the most actively traded by major trading exchanges, also continued to hit the 900 yuan/ton position during night trading. It once rose to 906 yuan/ton early Monday. This is also the highest level since February 20 this year. Iron ore futures on the Singapore Exchange also rose more than 1% in June, close to 119 US dollars/ton.
As far as iron ore prices are concerned, the latest major benefit is China's financial policy for the real estate market announced last weekend.
Traders said that the rise in other metals such as copper and gold also boosted the sentiment of black materials. However, in the future, the raw materials market will also face a counterattack from steel mills (which continue to lose money).
Silver has become the latest hype
Although gold hit a record high on Monday, silver garnered attention with an even crazier rise.
After returning to $30 per ounce with a 6% increase last Friday after 11 years, COMEX Silver experienced a wide fluctuation of “up 4% → increase close to zero → increase of 4% → increase of 4%” on Monday. It is worth mentioning that gold also experienced similar intraday shocks. Last weekend's plane crash in Iran became the latest help in gold and silver prices.
However, it remains to be seen how long this hype will last. As another target for observing the situation in the Middle East, international oil prices fell on Monday, partly due to reports that the US and Iran held indirect talks in Amman last week to discuss how to prevent the escalation of regional attacks. Mid-April of this year, the highest oil price so far during the year, was the moment when Iran and Israel were at their worst.
Editor/Somer