Monthly Metal Review

Overview

Is the end of recession in sight? Talks on the topic are endless this month and as might be expected at this point in the economic cycle, there is plenty of evidence - and argument - on both sides. In the more positive camp, the OECD said that its overall measure of advanced member countries now points to “recovery”. Besides, the IMF is considering revising its 2010 growth forecast up sharply from 1.9% (in April) to 2.4%, partly due to the collective global stimulus measures. On the other hand, the IMF warned this month that it was “still too early to assess whether [this] is a temporary or a more durable turning point”. And Dominique Strauss-Kahn added that: “The large part of the worst is not yet behind us”.
Having said that, base metals have enjoyed a remarkable recovery so far this year. The main driver of these rallies are the dramatically improved supply-demand fundamentals in China in 2009, which have tightened many markets from the dramatically oversupplied position that existed in late 2008 and looked set to persist for most of 2009. Secondly, the intense inventory destocking cycle that has hit non- Chinese demand looks set to end in the second half of 2009 and this could provide another positive catalyst for commodity markets, even if some of the Chinese buying seen of late starts to ease.
Prices for most of the industrial commodities found a floor in the 50th to 75th percentile of the cash cost curves as these prices induced significant supply adjustments. Now that some prices are rising, some of the large capacity closures seen since over the past 12 months can be reversed. For many commodities, supply restarts will dampen the price recovery - already recent rallies appear to be stimulating reopening of Chinese zinc and nickel capacity, for example.
In the Eurozone, annual inflation has turned negative for the first time since records began. The ECB has slashed its main policy interest rate by 325 basis points to 1 per cent since October, and pledged to meet in full bank demands for liquidity - resulting in the injection in late June of €442 billion in one-year loans into the banking system. The ECB’s governing council is expected to leave borrowing costs unchanged and analysts expect the rate to remain at 1 per cent for many months.
In the US, economic data continue to reaffirm expectations for an end to the recession by this summer. The mounting evidence on economic recovery has pushed markets to price a Fed policy reversal as early as December 2009.
Moreover, the manufacturing cycle is turning and this is expected to boost economic activity in S2. But prospects for later this year show there are potential risks of a spike in GDP growth as the inventory cycle gains momentum. However, the inventory cycle is essentially a one off “kicker” to growth that cannot be sustained in the absence of a firmer consumer recovery. Thus, a deeper and more sustained recovery remains conditional on a recovery in the durable goods cycle.

Daily Prices

June 2009

Copper
Date(Fix.) ($/MT)
Average 5013.95
30-06-2009 5108
29-06-2009 5085.5
26-06-2009 5101.5
25-06-2009 5023.5
24-06-2009 4890.5
23-06-2009 4810
22-06-2009 4821
19-06-2009 5020
18-06-2009 4901
17-06-2009 4903
16-06-2009 5049
15-06-2009 5075
12-06-2009 5240.5
11-06-2009 5266
10-06-2009 5180
09-06-2009 5047
08-06-2009 4936
05-06-2009 5055
04-06-2009 4870
03-06-2009 4951.5
02-06-2009 5026
01-06-2009 4947
Silver
Date(Fix.) ($/OZ)
Average 14.65
30-06-2009 13.94
29-06-2009 14.07
26-06-2009 14.26
25-06-2009 13.87
24-06-2009 13.88
23-06-2009 13.77
22-06-2009 13.83
19-06-2009 14.23
18-06-2009 14.19
17-06-2009 14.02
16-06-2009 14.3
15-06-2009 14.31
12-06-2009 15.07
11-06-2009 15.09
10-06-2009 15.39
09-06-2009 14.93
08-06-2009 14.84
05-06-2009 15.65
04-06-2009 15.305
03-06-2009 15.97
02-06-2009 15.62
01-06-2009 15.86
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average -
30-06-2009 -
29-06-2009 -
26-06-2009 -
25-06-2009 -
24-06-2009 -
23-06-2009 -
22-06-2009 -
19-06-2009 -
18-06-2009 -
17-06-2009 -
16-06-2009 -
15-06-2009 -
12-06-2009 -
11-06-2009 -
10-06-2009 -
09-06-2009 -
08-06-2009 -
05-06-2009 -
04-06-2009 -
03-06-2009 -
02-06-2009 -
01-06-2009 -
Date(Fix.) ($/OZ)
Average -
30-06-2009 -
29-06-2009 -
26-06-2009 -
25-06-2009 -
24-06-2009 -
23-06-2009 -
22-06-2009 -
19-06-2009 -
18-06-2009 -
17-06-2009 -
16-06-2009 -
15-06-2009 -
12-06-2009 -
11-06-2009 -
10-06-2009 -
09-06-2009 -
08-06-2009 -
05-06-2009 -
04-06-2009 -
03-06-2009 -
02-06-2009 -
01-06-2009 -
Date(Fix.) ($/OZ)
Average 945.67
30-06-2009 934.5
29-06-2009 935.5
26-06-2009 942
25-06-2009 937.25
24-06-2009 933.5
23-06-2009 920.75
22-06-2009 919.25
19-06-2009 935.25
18-06-2009 940.5
17-06-2009 930.5
16-06-2009 934
15-06-2009 932.25
12-06-2009 937.25
11-06-2009 947.5
10-06-2009 953.75
09-06-2009 956
08-06-2009 943.75
05-06-2009 962
04-06-2009 970.75
03-06-2009 976.75
02-06-2009 980
01-06-2009 981.75
Lead
Date(Fix.) ($/MT)
Average 1674.45
30-06-2009 1730
29-06-2009 1709
26-06-2009 1718
25-06-2009 1710
24-06-2009 1645
23-06-2009 1633
22-06-2009 1600
19-06-2009 1700
18-06-2009 1639
17-06-2009 1610
16-06-2009 1690
15-06-2009 1720
12-06-2009 1796.5
11-06-2009 1787
10-06-2009 1744.5
09-06-2009 1690
08-06-2009 1616
05-06-2009 1654.5
04-06-2009 1565.5
03-06-2009 1612.5
02-06-2009 1627.5
01-06-2009 1640
Zinc
Date(Fix.) ($/MT)
Average 1557.27
30-06-2009 1555
29-06-2009 1546
26-06-2009 1589.5
25-06-2009 1583
24-06-2009 1535.5
23-06-2009 1508
22-06-2009 1490.5
19-06-2009 1561
18-06-2009 1516
17-06-2009 1520
16-06-2009 1561
15-06-2009 1601.5
12-06-2009 1672.5
11-06-2009 1634.5
10-06-2009 1607.5
09-06-2009 1564.5
08-06-2009 1520.5
05-06-2009 1555.5
04-06-2009 1505
03-06-2009 1535
02-06-2009 1547
01-06-2009 1551
Tin
Date(Fix.) ($/MT)
Average 14985.68
30-06-2009 14950
29-06-2009 14790
26-06-2009 15000
25-06-2009 14800
24-06-2009 14700
23-06-2009 14595
22-06-2009 14615
19-06-2009 15000
18-06-2009 14900
17-06-2009 14880
16-06-2009 15150
15-06-2009 15340
12-06-2009 15700
11-06-2009 15825
10-06-2009 15850
09-06-2009 15150
08-06-2009 14675
05-06-2009 14725
04-06-2009 14650
03-06-2009 14840
02-06-2009 14750
01-06-2009 14800