This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Base Metals Could Correct This Week

NEW YORK ( TheStreet) -- Base metals are expected to see a correction during the week after last week's rally. Lower-than-expected economic data releases may also drag the prices lower. In addition, technical analysis suggests there is more room for correction.

Last week, base metals prices were cheered on account of the Chinese currency revaluation which led to positivity through the economy. Investors were driven by the fact that the move could boost purchasing power and consumer demand in China's domestic economy and thereby cushion demand for base metals like steel, aluminum and zinc.

Metal prices this week could also be affected by the scheduled economic data releases in the U.S. Factory orders in May are estimated to be standing at negative 0.5% as compared to the earlier recorded positive 1.2%. Also, consumer confidence is likely to be down to 62.5 from the earlier 63.3.


Last week, as traders maximized their positions on the back of rising demand from consuming industries in spot markets, aluminum prices increased by 2.7% to close at $1,997 at the London Metal Exchange contracts for three-month delivery. The LME three-month forward aluminum prices stood at support levels of $1,902 while resistance levels changed to $2,085. Meanwhile, aluminum inventories on the LME declined by 27,775 tonnes to settle at 4.45 million tonnes.

Positive news such as a 19.6% year-over-year increase in Japan's May aluminum shipments also supported the price rise. As Chinese demand for primary aluminum is estimated to triple to 43.6 million tonnes in 2020 from 15.5 million tonnes in 2010, Japan's aluminum product shipments are likely to cushion from this demand.

Besides, aluminum smelters in China's Henan province plan have planned to idle 700,000 tonnes of their annual production capacity by early July due to low prices and high costs leading to accumulated losses for the smelters.

The world's biggest aluminum producer, Alcoa (AA - Get Report), said that inventories would continue to increase as it was seeking new investment opportunities in thermal and hydropower-rich Iceland.

Last week, the major aluminum producers had mixed reactions to the metals price increase. Kaiser Aluminum (KALU - Get Report) dropped 2.5%, while Alumina (AWC) lost 1.2%. On the positive side, Aluminum Corporation of China (ACH) accumulated 1.7% and Alcoa (AA - Get Report) was up 1.1%
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ACH $8.05 -1.71%
AA $10.24 -0.78%
AWC $4.20 0.48%
FCX $11.80 -1.75%
KALU $90.56 -1.73%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs