Monthly Metal Review

Overview

As we approach mid-2009, the global economic outlook has shifted from one of pessimism and fear of the unknown to optimism and a feeling that the worst of the financial crisis and global recession may be behind us.
External influences on the base metals are somewhat supportive, with equities trading positively in the European session, and Asian equities putting together a robust performance. Crude oil is also stronger, and seems to have established a foothold above the $60 per barrel level.
The USD is mixed, weaker against the EUR and the JPY but unchanged to lower against the commodity currencies. In the US, existing home sales increased by 2.9% month-on-month in April, according to the National Association of Realtors, although they remained down by 3.5% year-on-year.
The premise for the recovery in base metals prices has been based on very little evidence, however. The fact that Chinese imports of refined metal have exceeded expectations is not based on any real pick-up in consumption, but more on the shifting of surplus metal from one location to another. The main forces behind this have been Chinese consumer and State Reserves Bureau restocking, and the strong arbitrage trade in copper, zinc and aluminium.
In fact, the SRB might have been far more active in the copper market than currently thought, and China plc is stocking up on raw materials in order to drive its huge infrastructure-focused economic stimulus programme.
The economic outlook in the West may be less blitzed-out than it was in December, but the West has not yet turned a corner, only glimpsed the possibility of a corner that might be able to get round. Therefore, the evidence from steel and the minor metals’ prices suggests where we really are today, without any solid indication that industrial activity (and therefore demand) has started recovering.
Speculative investment has accounted for the relatively better price performance of base metals so far this year, with investors betting that the bottom of the cycle has been reached and that as a consequence, base metals’ prices have bottomed.
The price rally is largely based on Chinese imports and a swing of the pendulum away from deep pessimism to optimism. This may not be illogical, but there still exists significant structural overcapacity in most markets, and price rallies may soon be capped by supply reactivations. However, the sharp destocking in the rest of the world should end in the second half, and recent readings from steel and other sectors in the US indicate that the destocking there is almost over.
Those expecting a big hole in world demand as Chinese imports ease may be surprised by the extent to which a recovery outside China may gather pace.

Daily Prices

May 2009

Copper
Date(Fix.) ($/MT)
Average 4568.63
29-05-2009 4776
28-05-2009 4637
27-05-2009 4661
26-05-2009 4538
22-05-2009 4586
21-05-2009 4504
20-05-2009 4539
19-05-2009 4601
18-05-2009 4400
15-05-2009 4348
14-05-2009 4309
13-05-2009 4508
12-05-2009 4626
11-05-2009 4527
08-05-2009 4752
07-05-2009 4760
06-05-2009 4591
05-05-2009 4640
01-05-2009 4501
Silver
Date(Fix.) ($/OZ)
Average 14.03
29-05-2009 15.52
28-05-2009 14.88
27-05-2009 14.5
26-05-2009 14.3
22-05-2009 14.66
21-05-2009 14.23
20-05-2009 14.29
19-05-2009 13.88
18-05-2009 13.79
15-05-2009 13.92
14-05-2009 13.84
13-05-2009 14.14
12-05-2009 14.09
11-05-2009 13.9
08-05-2009 13.9
07-05-2009 14.01
06-05-2009 13.44
05-05-2009 13.11
01-05-2009 12.15
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average -
29-05-2009 -
28-05-2009 -
27-05-2009 -
26-05-2009 -
22-05-2009 -
21-05-2009 -
20-05-2009 -
19-05-2009 -
18-05-2009 -
15-05-2009 -
14-05-2009 -
13-05-2009 -
12-05-2009 -
11-05-2009 -
08-05-2009 -
07-05-2009 -
06-05-2009 -
05-05-2009 -
01-05-2009 -
Date(Fix.) ($/OZ)
Average -
29-05-2009 -
28-05-2009 -
27-05-2009 -
26-05-2009 -
22-05-2009 -
21-05-2009 -
20-05-2009 -
19-05-2009 -
18-05-2009 -
15-05-2009 -
14-05-2009 -
13-05-2009 -
12-05-2009 -
11-05-2009 -
08-05-2009 -
07-05-2009 -
06-05-2009 -
05-05-2009 -
01-05-2009 -
Date(Fix.) ($/OZ)
Average 928.64
29-05-2009 975.5
28-05-2009 957.75
27-05-2009 951
26-05-2009 945
22-05-2009 959.75
21-05-2009 937.5
20-05-2009 939.5
19-05-2009 924.75
18-05-2009 921
15-05-2009 929.5
14-05-2009 925.25
13-05-2009 924
12-05-2009 917
11-05-2009 913
08-05-2009 907
07-05-2009 912.25
06-05-2009 910
05-05-2009 910
01-05-2009 884.5
Lead
Date(Fix.) ($/MT)
Average 1440.16
29-05-2009 1530
28-05-2009 1437
27-05-2009 1427.5
26-05-2009 1409
22-05-2009 1422.5
21-05-2009 1420
20-05-2009 1436
19-05-2009 1527.5
18-05-2009 1460
15-05-2009 1422.5
14-05-2009 1395
13-05-2009 1451
12-05-2009 1461
11-05-2009 1440.5
08-05-2009 1473.5
07-05-2009 1481
06-05-2009 1408
05-05-2009 1426.5
01-05-2009 1334.5
Zinc
Date(Fix.) ($/MT)
Average 1483.79
29-05-2009 1509
28-05-2009 1425
27-05-2009 1457
26-05-2009 1460
22-05-2009 1467.5
21-05-2009 1443
20-05-2009 1449
19-05-2009 1519.5
18-05-2009 1479
15-05-2009 1460.5
14-05-2009 1430
13-05-2009 1435
12-05-2009 1551
11-05-2009 1505
08-05-2009 1541
07-05-2009 1589
06-05-2009 1522
05-05-2009 1501
01-05-2009 1448.5
Tin
Date(Fix.) ($/MT)
Average 13793.42
29-05-2009 14325
28-05-2009 13680
27-05-2009 13955
26-05-2009 13900
22-05-2009 13975
21-05-2009 13705
20-05-2009 14000
19-05-2009 14000
18-05-2009 13695
15-05-2009 13775
14-05-2009 13600
13-05-2009 13895
12-05-2009 14400
11-05-2009 13850
08-05-2009 14340
07-05-2009 14025
06-05-2009 13400
05-05-2009 12750
01-05-2009 12805