Monthly Metal Review

Overview

The U.S. Federal Reserve pleased markets and metals by continuing its $85-billion monthly bond-buying program. The Fed will postpone any economic-stimulus retreat for at least another month and possibly into 2014. Chairman Ben Bernanke said the economy was improving but officials were wary. Fears include threats by Congressional Republicans to shut down the government in October over political issues.

Higher mortgage-interest rates slowed U.S. multifamily construction, but a permit surge for single-family homes indicated strengthening in housing-market recovery. August housing starts rose 0.9 percent to a seasonally adjusted 891,000 yearly. Multifamily-home starts dropped 11.1 percent to a 263,000-unit rate, but groundbreaking for single-family homes, the largest segment, increased 7.0 percent to a 628,000-unit pace. Auto sales surged 17 percent in August to a seasonally adjusted annual 16.1 million.
With German unemployment near a two-decade low, voters returned Chancellor Angela Merkel to office. Her euro zone-austerity policy was validated politically. The ZEW poll of economic sentiment had jumped from August’s 42.0 to 49.6 on an improved euro-zone outlook. The still-healing zone economy saw business activity grow as September orders arrived at the fastest pace in more than two years, economic surveys showed. They indicated a broad-based recovery with growth in both Germany and France.
The European Union said a bounce in exports and spending pulled the euro zone from recession in the second quarter. Stronger-than-expected growth from Germany to Portugal helped the economy expand 0.3 percent April-to-June, the EU’s statistics office said. Exports to the non-EU world rose sharply in the quarter, and government spending made its first positive contribution to the economy since late 2009.

Asian copper-smelting fees jumped nearly a third since July to the highest in more than two years as concentrate supplies expanded. A smelter in China reportedly received TC/RC of $100 per tonne and 10 cents per pound in mid-September for spot clean, standard South American concentrates. China’s con-centrate imports surged 37 percent through July to 5.4 million tonnes. July inflows reached 938,503 tonnes.

China’s growth rebound gathered September momentum, especially in exports. The Shanghai Stock Exchange Composite Index, a manufacturing measure, reached a six-month high. The preliminary HSBC-Markit Economics Purchasing Managers’ Index (PMI) exceeded expectations to register 51.2. Readings above 50 signal expansion. HSBC’s report on China showed increases in output, new orders, export orders and prices, whilst employment fell more slowly. Citigroup raised its third-quarter China-growth forecast to 7.8 percent from 7.4, while Deutsche Bank raised it from 7.7 percent to 7.9.

Anglo American abandoned the proposed Alaska Pebble-Mine copper-gold project. It will pay 50-percent partner Northern Dynasty Minerals a $300-million impairment charge but avoids a nasty political and regulatory struggle. Whilst Pebble could become the largest open-pit copper-gold mine, critics said waste would damage the valuable Bristol Bay salmon population. The deposit could be worth up to half a trillion dollars, with 55 billion pounds of copper, 76 million ounces gold, and 3.3 billion pounds of molybdenum. Northern Dynasty said it will continue.

Stung by a proposed 7.5-percent Mexican min-ing royalty, miners threatened to reduce investments. The world's biggest silver producer says it has been too generous to miners. The proposal is part of President Enrique Pena Nieto's plan to boost Mexico's low tax haul, close corporate loopholes and widen the tax base. Mexico charges miners a 30-percent income tax, lower than Brazil and Peru. The government also wants a quarterly fee for mines dormant for two years. The royalty could rise to as much as 8 percent for gold, silver and platinum miners.

Daily Prices

Copper
Date(Fix.) ($/MT)
Average 6825.00
00-00-0000 6825
Silver
Date(Fix.) ($/OZ)
Average 16.55
00-00-0000 16.55
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average 1303.50
00-00-0000 1303.5
Date(Fix.) ($/OZ)
Average 1304.43
00-00-0000 1304.425
Date(Fix.) ($/OZ)
Average 1305.35
00-00-0000 1305.35
Lead
Date(Fix.) ($/MT)
Average 2445.50
00-00-0000 2445.5
Zinc
Date(Fix.) ($/MT)
Average 3100.00
00-00-0000 3100
Tin
Date(Fix.) ($/MT)
Average 20800.00
00-00-0000 20800
Nickel
Date(Fix.) ($/MT)
Average 15200.00
00-00-0000 15200
Cobalt
Date(Fix.) ($/MT)
Average 89000.00
00-00-0000 89000