Monthly Metal Review
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
Early this month the LME tested its disaster center at Chelmsford, Essex. Things went smoothly despite some teething issues on a quiet day of trading as the US was on its Labor Day holiday. Most felt that the venue was fairly adequate though there were some concerns on whether there were sufficient phone lines and would there be struggles on a busier day. They will probably do a fuller days trade test in the near future but for now as one trader said, “It does exactly what is says on the tin.”
The same day, September 7th, base metal prices edged higher amid thin volumes as the LME had purposely chosen a day where large trading volumes were not expected to try out its disaster and recovery site. Despite some poor economic indicators the market continues to be rather bullish. Most base metals finding support in fund-driven performance while Lead was finding its strength in the Chinese crack down on lead producers. Authorities having already shut down and estimated lead smelting capacity of 400,000 tpy, following further investigation could potentially rise to 900,000 tpy, loss of smelting capacity.
Nevertheless China announced it would be giving preferential loans to producers in an attempt to offset the cost of raw material import theses including lead, zinc, and copper concentrates. This is seen as a symbolic statement intended to show support for producers dependant on overseas raw materials. However domestic smelters feel it would have little impact as the interest rates on loans appear as small differences in the face of more important factors as the volatility of prices. China has been engineering a rapid economic recovery to maintain production and employment by freeing up bank lending and offering inexpensive loans to industrial producers.
Chinas impressive economic boom has not come without its consequences as its “cancer villages” bear witness. Rivers viscous with heavy metal pollution leach through poisoning town wells and crops. An estimated 460,000 people died prematurely of cancer every year according to a 2007 World Bank study, 85 percent of these cases are stomach, liver, kidney, and colon cancer that can stem from heavy metal ingestion. Chinas top environmental officials have now called for a more effective way to tackle the heavy metal poisoning following a series of lead poisoning across the country.
It may seem futuristic but it could be just around the corner. Mining hydro thermal vents for not only a renewable form of energy but also drinking water and recovering the gold, silver, copper, iron, zinc, cadmium, manganese, and sulfur, as well as halides, sulfates, chromates, molybdates, and tugstates that are all abundant in the high temperature high pressure fluids of the geological ancient vents.
As the economy looks forward some feel it is still too soon to affirm a sustainable recovery is just around the corner. Viewing only a weak recovery in an environment of limited inflation, in emerging markets both growth and inflation could be stronger. The quest for high yield will dominate but large-scale risk-taking will continue to be limited, seems to be the forecasted them for next year.
Towards the end of this month industrial metals ended on a lower trend as the dollar rebounded though miners gained an upward momentum as optimism over the global economy helped drive the sector higher.