Oh, boy.
Well, it got worse for the beleaguered metals complex overnight. After a harrowing Thursday collapse, iron ore fell again in China, as futures in Dalian dove nearly 5% and the SGX AsiaClear contract (Singapore) headed for a 12% loss on the week, the largest since November.
Nickel racked up more losses, falling a third day as concerns dissipate over supply problems in the Philippines. Nickel for 3-month delivery was -0.4% to $8,975/ton by 10:13am on the LME. Earlier in the session it had hit its lowest level since June 24.
Copper mercifully traded little changed after falling nearly 5% in the worst two-day stretch since 2015, but the news there was hardly encouraging. LME said inventories climbed (another) 12% to 354,650 tons. That's a goddamn 40% increase in 3 days, the most since March.
“We're seeing some consolidating in copper after heavy falls this week,” SocGen's Robin Bhar told Bloomberg by phone. “There's clearly weaker demand with soft economic data from u.s. and China.” Yes, “clearly.”
As an aside, that would be the same Robin Bhar who warned earlier this week that algos were causing erratic price action in metals. To wit:
Price volatility has always been attributed to the impact that these fund players have and continue to have on metals markets. Periods of extreme price volatility are more frequent due to the increasing role being played by algorithmic players (algos) and high frequency traders (HFT).
Overall, the Bloomberg Commodity Index hit its lowest level in a year and is now “oversold” (want to dip your toe in and have it bitten right the fuck on off?).
And then there was oil.
Oh, yes there was oil. And it plunged some 4% to $43.76/bbl, its lowest since November.
Thankfully, both Brent and WTI were able to retrace their early collapse, but you should note that overnight trading was heavy – that's unusual. Volumes for both grades were well in excess of the average as of about 4:20am London time, Bloomberg observed.
