Monthly Metal Review

Overview (August 2018)

The dominant feature in the global economy remains the US trade war and the potential for it to escalate continues to weigh on market sentiment. While some progress has been made on the trade front with a US-Mexico trade deal, the fact it does not yet include Canada and there has been no major progress between US and China, suggests the lack of progress still outweighs what progress has been made. The value of the Chinese yuan has fallen some ten percent to 6.9347 against the US dollar, from around 6.3000 in the first quarter of the year. This goes some way to offsetting the tariffs the US has implemented, which in turn has rattled US President Donald Trump. Indeed, Trump now sees the rise in the US dol-lar, driven by interest rate hikes, as undermining his efforts to increase America’s competitive advantage That said, US preliminary GDP for the second quarter showed growth of 4.2 percent against the advanced reading for second quarter growth of 4.1 per cent (it should be remembered that GDP data is backward looking and the trade wars only start-ed to escalate from June onwards). Weakness in emerging market currencies is also a warning that rising US interest rates are a headwind for global growth and financial stability, which may play into Trump’s hand. If the dollar does start to weaken then that could soon underpin metals’ prices, especially if it coincided with the ending of the summer lull in the northern hemisphere. Although the US trade stance dominates events, it is im-portant to see the current weakness in metals’ prices in context. What started in early 2018 as a consolidation in markets after the strong rebounds and rallies in 2016 and 2017, has turned increas-ingly into a down turn. Business and investor sentiment has been negatively affected by Trump’s hostile stance over trade and the situation feels fairly grim, especially as it has become drawn out. The index of LME prices climbed 64 percent between No-vember 2015 and January 2018, it has since fallen, but in late-August the Index was still 43 percent above the 2015 lows. The fact copper prices managed to continue rebounding even when news of a wage deal was announced at Escondida, suggests the appetite to increase short exposure in the metals has diminished. The U.S. government revised its tally of second-quarter economic growth to an annualized 4.2 percent, up slightly from an earlier 4.1 percent. It was the best quarterly figure in almost four years, helping send Wall Street share markets higher. On a non-annualized basis, the economy grew 1 percent during the quarter. The UK economy grew 0 by.4 percent during the same period. The Federal Reserve left its benchmark interest rate unchanged and signaled further gradual rate hikes this year. Fed Chief Jerome Powell said he sees little risk of economic overheating. With US equities at or near record highs and with gold prices weak, there does not seem to be too much concern that the trade wars, or tightening US monetary policy, are about stop global growth. Growth may be weak and metals prices may have corrected, but both have potential to recover once a US-China trade deal is made. Gold hit a 19-month low as the dollar strengthened in mid-August and worries about China’s economy overshadowed the battered Turkish lira’s rebound and a rise for European stocks. The fall came as Turkey’s lira hit an all-time low and investors shied away from emerging markets as risk appetites faltered despite a lira rally. Germany posted a budget surplus of €48.1 billion in first-half 2018, the highest since German reunification in 1990. The news sparked calls for tax cuts and more public investment. China’s economy has been slowing. Retail sales this year grew at their slowest pace in over a decade. Private-sector wages are grow-ing at their slowest since the global financial crisis, and the stock market has fallen by one-fifth. In late August, the Bank of China injected Rmb149 billion (US$22 billion) into the banking system through loans to commercial banks. China is to expand infrastructure spending to stimulate the econo-my as the trade war escalates. Beijing plans to spend some US$ 1 billion on metals-heavy railway building, investing heavily in existing projects including a planned rail line between Sichuan Province and the Tibetan region. It restarted approving subway construction throughout the country.

Daily Prices

September 2018

Copper
Date(Fix.) ($/MT)
Average 5924.43
20-09-2018 6057
19-09-2018 6057
18-09-2018 6003
17-09-2018 5860
14-09-2018 5946.5
13-09-2018 5991
12-09-2018 5891
11-09-2018 5849
10-09-2018 5840.5
07-09-2018 5883
06-09-2018 5940
05-09-2018 5850
04-09-2018 5823
03-09-2018 5951
Silver
Date(Fix.) ($/OZ)
Average 14.22
20-09-2018 14.23
19-09-2018 14.185
18-09-2018 14.21
17-09-2018 14.17
14-09-2018 14.215
13-09-2018 14.225
12-09-2018 14.155
11-09-2018 14.125
10-09-2018 14.215
07-09-2018 14.185
06-09-2018 14.265
05-09-2018 14.17
04-09-2018 14.25
03-09-2018 14.525
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average 1199.99
20-09-2018 1203
19-09-2018 1203
18-09-2018 1199.4
17-09-2018 1196.8
14-09-2018 1206.2
13-09-2018 1206.65
12-09-2018 1197.8
11-09-2018 1194
10-09-2018 1195.8
07-09-2018 1200.75
06-09-2018 1204.3
05-09-2018 1194.7
04-09-2018 1195.75
03-09-2018 1201.7
Date(Fix.) ($/OZ)
Average 1199.97
20-09-2018 1205.675
19-09-2018 1203.15
18-09-2018 1199.8
17-09-2018 1199.35
14-09-2018 1204.075
13-09-2018 1208.225
12-09-2018 1196.7
11-09-2018 1191.925
10-09-2018 1196.2
07-09-2018 1199.825
06-09-2018 1204.725
05-09-2018 1195.7
04-09-2018 1193.3
03-09-2018 1200.875
Date(Fix.) ($/OZ)
Average 1199.94
20-09-2018 1208.35
19-09-2018 1203.3
18-09-2018 1200.2
17-09-2018 1201.9
14-09-2018 1201.95
13-09-2018 1209.8
12-09-2018 1195.6
11-09-2018 1189.85
10-09-2018 1196.6
07-09-2018 1198.9
06-09-2018 1205.15
05-09-2018 1196.7
04-09-2018 1190.85
03-09-2018 1200.05
Lead
Date(Fix.) ($/MT)
Average 2039.82
20-09-2018 2003
19-09-2018 2025
18-09-2018 2046
17-09-2018 2040
14-09-2018 2050
13-09-2018 2042
12-09-2018 1982
11-09-2018 1970
10-09-2018 2065
07-09-2018 2036.5
06-09-2018 2044
05-09-2018 2067
04-09-2018 2086
03-09-2018 2101
Zinc
Date(Fix.) ($/MT)
Average 2392.46
20-09-2018 2436
19-09-2018 2399
18-09-2018 2347
17-09-2018 2287
14-09-2018 2327.5
13-09-2018 2369
12-09-2018 2355
11-09-2018 2338.5
10-09-2018 2406
07-09-2018 2412
06-09-2018 2470.5
05-09-2018 2436.5
04-09-2018 2435.5
03-09-2018 2475
Tin
Date(Fix.) ($/MT)
Average 19001.43
20-09-2018 19050
19-09-2018 19100
18-09-2018 19030
17-09-2018 18960
14-09-2018 19150
13-09-2018 19060
12-09-2018 18875
11-09-2018 19070
10-09-2018 19075
07-09-2018 19110
06-09-2018 18875
05-09-2018 18925
04-09-2018 18750
03-09-2018 18990
Nickel
Date(Fix.) ($/MT)
Average 12412.14
20-09-2018 12530
19-09-2018 12470
18-09-2018 12320
17-09-2018 12235
14-09-2018 12515
13-09-2018 12615
12-09-2018 12285
11-09-2018 12255
10-09-2018 12205
07-09-2018 12290
06-09-2018 12490
05-09-2018 12415
04-09-2018 12475
03-09-2018 12670
Cobalt
Date(Fix.) ($/MT)
Average 62750.00
20-09-2018 60000
19-09-2018 62750
18-09-2018 62750
17-09-2018 62750
14-09-2018 62750
13-09-2018 62750
12-09-2018 62750
11-09-2018 61750
10-09-2018 61750
07-09-2018 62500
06-09-2018 62500
05-09-2018 64500
04-09-2018 64500
03-09-2018 64500