Key Macroeconomic Indicators for Base Metal Prices (2015-10-15)

SHANGHAI, Oct. 15 (SMM) – Eyes should be on US September’s CPI due out Thursday night. US August’s monthly CPI came at -0.1%, turning to losses for the first time this year. Markets expect US September’s monthly CPI to be -0.2%, which will weigh down US dollar.

Poor PPI and retail sales data from US sent dollar down below 94, supporting base metal prices. However, base metal prices diverged. Aluminum prices stayed weak while copper prices remained strong. Overnight gains in Shanghai base metals were largely due to position closures by shorts. Longs grew in Shanghai copper and nickel market but as a whole, a large number of longs still stay out of market. In this context, diverging prices are expected in the Shanghai market.

The fall in US dollar index, in response to US’s poor PPI and retail sales data in September, did not support oil prices in overnight market. US API crude oil inventories surged 9.3 million bbl last week, above the expected 2.8 million bbl and versus a slip of 1.2 million bbl a week ago. And the growth hit a new high since April. SMM points out that should crude oil prices continue to fall, base metal price gains will be erased.