Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Global auto production: not looking
too vulnerable
Feature article
Auto production looks much less vulnerable than it was in 2007/08 to the
downside risks at present. Both European and US markets are already at low
levels, while the Chinese market has seen a build-up of pent up demand with
growth slowing this year. While this doesn‟t mean that production won‟t fall,
those commodities that are most exposed to autos don‟t appear to be those
that are most at risk.
Latest news
All LME base metals prices, bar nickel, finished higher in trading on
Friday. Aluminium, despite the delivery of another 113,450t on to LME
warrant in Vlissingen, and zinc advanced by 0.7% and copper closed with a
gain of 0.6%. Over the week as a whole, however, all LME prices ended
lower, with the exception of zinc, for which we think the fundamental market
outlook is improving, albeit mainly to the benefit of miners rather than
smelters. Nonetheless, the price declines were modest by comparison with
equities markets, with the exception of tin where a lack of liquidity may have
been a factor in the 8% week-on-week fall.
We continue to see a disconnection between exchange traded commodities
prices, which are arguably more sensitive to fear over the future economic
outlook, and non-exchange traded commodities prices, which arguably
depend more on physical market business. Iron ore prices, for example,
increased by 0.8% WoW. In China, premiums for base metals have risen. In
Shanghai, for example, copper premiums are up by ~$20/t WoW, encouraged
by the opening up of the arbitrage between SHFE and LME exchange
prices. The zinc arb has also opened for the first time in months. However,
base metals premiums have dipped in some other regions although, in our
view, this is mainly seasonal.
Most precious metals prices rose, with gold vaulting to another new record of
$1,848/t.oz on the pm fix by virtue of its supposed safety. Silver rose by 4.1%
to within a whisker of $41/t.oz and platinum, with a gain of 1% on the day,
continued to trade above gold. However, palladium fell by 2.1% to $750/t.oz.
The trend of weaker economic survey data continued on Friday, this time
relating to China. The Market News International August flash business
sentiment survey fell to 55.4 (from 57.2 in July), and is now at its lowest level
since March 2009. The production index also fell from 58.3 from 62.8. This
suggests tight monetary conditions continue to weigh on business sentiment
and activity.
Iron ore stockpiles at Chinese ports fell 1.4% WoW to 82.9mt. Stock levels
are now 2.55mt below early July levels, reflecting the lack of material arriving
from India during the monsoon season.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Global auto production: not looking
too vulnerable
Feature article
Auto production looks much less vulnerable than it was in 2007/08 to the
downside risks at present. Both European and US markets are already at low
levels, while the Chinese market has seen a build-up of pent up demand with
growth slowing this year. While this doesn‟t mean that production won‟t fall,
those commodities that are most exposed to autos don‟t appear to be those
that are most at risk.
Latest news
All LME base metals prices, bar nickel, finished higher in trading on
Friday. Aluminium, despite the delivery of another 113,450t on to LME
warrant in Vlissingen, and zinc advanced by 0.7% and copper closed with a
gain of 0.6%. Over the week as a whole, however, all LME prices ended
lower, with the exception of zinc, for which we think the fundamental market
outlook is improving, albeit mainly to the benefit of miners rather than
smelters. Nonetheless, the price declines were modest by comparison with
equities markets, with the exception of tin where a lack of liquidity may have
been a factor in the 8% week-on-week fall.
We continue to see a disconnection between exchange traded commodities
prices, which are arguably more sensitive to fear over the future economic
outlook, and non-exchange traded commodities prices, which arguably
depend more on physical market business. Iron ore prices, for example,
increased by 0.8% WoW. In China, premiums for base metals have risen. In
Shanghai, for example, copper premiums are up by ~$20/t WoW, encouraged
by the opening up of the arbitrage between SHFE and LME exchange
prices. The zinc arb has also opened for the first time in months. However,
base metals premiums have dipped in some other regions although, in our
view, this is mainly seasonal.
Most precious metals prices rose, with gold vaulting to another new record of
$1,848/t.oz on the pm fix by virtue of its supposed safety. Silver rose by 4.1%
to within a whisker of $41/t.oz and platinum, with a gain of 1% on the day,
continued to trade above gold. However, palladium fell by 2.1% to $750/t.oz.
The trend of weaker economic survey data continued on Friday, this time
relating to China. The Market News International August flash business
sentiment survey fell to 55.4 (from 57.2 in July), and is now at its lowest level
since March 2009. The production index also fell from 58.3 from 62.8. This
suggests tight monetary conditions continue to weigh on business sentiment
and activity.
Iron ore stockpiles at Chinese ports fell 1.4% WoW to 82.9mt. Stock levels
are now 2.55mt below early July levels, reflecting the lack of material arriving
from India during the monsoon season.
No comments:
Post a Comment