Sector movers: Miners lead gains

18th Apr 2016 16:08

(ShareCast News) - Shares in miners paced gains as the prices of several key industrial metals bounced back and a leading commodities strategist said that for the first time in three years probabilities around a base-case were shifting to the 'bullish' rather than the 'bearish' side."Commodity markets are stumbling to normalcy. Across commodities, cost curves are stabilizing and supply/demand fundamentals are moving toward equilibrium if not deficit," Citi's global commodities team led by Ed Morse said in a research note sent to clients."Energy is uniquely critical to a commodities rebound, given the energy intensity across commodities," Morse added, going on to say that oil markets looked likely to to enter a period of "sustained inventory draws".In prescient fashion, "supply-side disruptions look more likely than lower demand or higher supply," the strategist said.Be that as it may, in parallel another research team at the broker led by Heath R.Jansen downgraded its six-month view on the UK metals and mining sector from 'neutral' to 'bearish'.Three-month copper futures closed 0.9% higher at $4,822.50 per metric tonne on the LME, alongside gains of 2.3% and 1.7% for nickel and zinc.That saw Anglo American clock in with gains of 2.26% to end the day at 693.60p, BHP rise 1.82% to 916.40 and Glencore end the session up by 1.54% to 158.05.The DJ Stoxx 600 sub-index for Basic Resources ended 1.47% higher at 291.05.To take note of, ahead of the latest IMF meetings over the weekend, China announced it would remove export subsidies on aluminium products including speciality steel and titanium.For analysts at Macquarie that was more of a strategically-timed message meant to forestall US rhetoric.Perhaps, in any case, after the close of trading in London it was followed by similar remarks from the Business Secretary.Speaking from Brussels, Said Javid said that China had vowed to reduce the amount of steel it produces.Acting as a backdrop, and much as Morse described, front month Brent crude oil futures recovered from a steep 6% drop early in the session to trade in the black by the end of day.A weekend meeting of several of the world's major oil producers in Doha,Qatar failed to produce an agreement to 'freeze' oil production. However, that appeared to be compensated for by a walk-out of Kuwaiti public sector workers on Sunday that saw oil output at the state-owned Kuwait Oil Company plunge.Morse told Bloomberg TV the strike had been the reason for the rebound in crude futures, taking 600,000 barrels off the market, more than the Doha meeting might ever have hoped for, but he expected the disruption to supplies to prove fleeting, with markets then acting to remove the froth and crude oil futures falling slipping back below the $40 per barrel mark.