Monthly Metal Review

Overview

     Commodity prices are set for their next significant rise in the fourth quarter in a move that could extend into 2012 and push mining shares sharply higher. The market appears to be struggling to see beyond the near-term slowing of China and the rest of the world, but evidence that the Chinese economy has bottomed out will be the next catalyst for the outperformance of mining shares, similar to those in 2001, 2005, 2007 and 2009. Analysts say a rebound in China is likely to be followed by growth acceleration and demand normalisation in the rest of the world in 2012, and as a consequence, commodities markets should remain structurally tight and prices high.
     Besides, the Chinese government has released further details on its plans to eliminate inefficient capacity in steel and base metals production. The aim of this policy is to increase the market share of capacity using advanced technologies, reduce surplus capacity and promote healthy industry development. Capacity reduction targets in zinc (5% of capacity), copper (3%) and aluminium (2%) have also been set. In addition, the Chinese authorities plan to tighten environmental protection regulations at smelters. After a number of pollution incidents over the last few years, the authorities have announced that smelters which do not meet new regulations will be closed and must spend two years reorganizing before being permitted to reapply for operating rights.
     Anyway, fears that the Chinese economy is running out of steam eased after surveys showed that factory activity accelerated in August, while manufacturing in India was also strong. Indeed, India’s economy grew a brisk 8.8% in June quarter-on-quarter, its fastest pace since early 2008, highlighting the strength of the economy despite the impact of high inflation on consumer spending. However, other Asian economies, including Japan and South Korea, did not perform as strongly, amid slackening demand from beyond the region.
     In the US, weaker than expected employment data for June and July triggered sharp falls in the markets this month. Subsequently, investors are preparing for a week of crucial economic data that could decide the US Federal Reserve's next move after Ben Bernanke, its chairman, said it would ease monetary policy if the outlook deteriorated "significantly". Non-farm payrolls data - the most important indicator on the health of the US labour market and the economy - are expected to show that private sector employers created only 42,000 jobs in August and the unemployment rate rose, according to economists surveyed by Reuters. A sustained rise in unemployment is a likely trigger for the Fed to launch further quantitative easing by buying billions of dollars of long-term assets such as Treasury bonds in an attempt to stimulate the economy.
     Similarly, the Bank of Japan will hold an emergency meeting to ease policy very soon. The BoJ is under intense pressure to act after the yen soared to Y85 to the dollar, threatening the recovery in Japan's exports.
     In the European Union, the central bank is also set to maintain very easy policy and is likely to keep lending banks all of the short-term funds they demand until the end of the year. Meanwhile a fresh ratings downgrade of Ireland has shown worries over the euro zone's fiscal health are far from over. However, the European Union growth accelerated sharply in the three months to June. Data showed EU unemployment had held steady since February, albeit at almost 10% of the workforce. Forward-looking indicators suggest the momentum will be maintained well into the second half of the year. The European Commission reported its Eurozone “economic sentiment” indicator had risen unexpectedly strongly in August. Consumers were more optimistic than at any time since the end of 2007.

Daily Prices

August 2010

Copper
Date(Fix.) ($/MT)
Average 7283.95
31-08-2010 7355.5
27-08-2010 7287
26-08-2010 7195.5
25-08-2010 7067
24-08-2010 7171
23-08-2010 7250
20-08-2010 7205.5
19-08-2010 7442
18-08-2010 7353.5
17-08-2010 7315.5
16-08-2010 7205
13-08-2010 7200
12-08-2010 7180
11-08-2010 7204
10-08-2010 7225
09-08-2010 7425
06-08-2010 7420
05-08-2010 7395
04-08-2010 7370.5
03-08-2010 7360
02-08-2010 7336
Silver
Date(Fix.) ($/OZ)
Average 18.36
31-08-2010 18.87
27-08-2010 19.03
26-08-2010 19.11
25-08-2010 18.63
24-08-2010 17.88
23-08-2010 17.94
20-08-2010 18.14
19-08-2010 18.45
18-08-2010 18.36
17-08-2010 18.54
16-08-2010 18.2
13-08-2010 18.06
12-08-2010 17.92
11-08-2010 18.12
10-08-2010 18.09
09-08-2010 18.48
06-08-2010 18.3
05-08-2010 18.35
04-08-2010 18.5
03-08-2010 18.42
02-08-2010 18.11
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average -
31-08-2010 -
27-08-2010 -
26-08-2010 -
25-08-2010 -
24-08-2010 -
23-08-2010 -
20-08-2010 -
19-08-2010 -
18-08-2010 -
17-08-2010 -
16-08-2010 -
13-08-2010 -
12-08-2010 -
11-08-2010 -
10-08-2010 -
09-08-2010 -
06-08-2010 -
05-08-2010 -
04-08-2010 -
03-08-2010 -
02-08-2010 -
Date(Fix.) ($/OZ)
Average -
31-08-2010 -
27-08-2010 -
26-08-2010 -
25-08-2010 -
24-08-2010 -
23-08-2010 -
20-08-2010 -
19-08-2010 -
18-08-2010 -
17-08-2010 -
16-08-2010 -
13-08-2010 -
12-08-2010 -
11-08-2010 -
10-08-2010 -
09-08-2010 -
06-08-2010 -
05-08-2010 -
04-08-2010 -
03-08-2010 -
02-08-2010 -
Date(Fix.) ($/OZ)
Average 1215.81
31-08-2010 1246
27-08-2010 1235
26-08-2010 1237
25-08-2010 1237.5
24-08-2010 1222
23-08-2010 1226
20-08-2010 1223.5
19-08-2010 1233.5
18-08-2010 1218
17-08-2010 1226
16-08-2010 1223.5
13-08-2010 1214.25
12-08-2010 1213
11-08-2010 1205.5
10-08-2010 1192.5
09-08-2010 1203
06-08-2010 1207.75
05-08-2010 1192.5
04-08-2010 1199.5
03-08-2010 1187.5
02-08-2010 1188.5
Lead
Date(Fix.) ($/MT)
Average 2075.24
31-08-2010 2010.5
27-08-2010 2010
26-08-2010 1980.5
25-08-2010 1937
24-08-2010 1991
23-08-2010 2021.5
20-08-2010 2040
19-08-2010 2103.5
18-08-2010 2119
17-08-2010 2113
16-08-2010 2040.5
13-08-2010 2065.5
12-08-2010 2028
11-08-2010 2047
10-08-2010 2100.5
09-08-2010 2171
06-08-2010 2167.5
05-08-2010 2190.5
04-08-2010 2183
03-08-2010 2175.5
02-08-2010 2085
Zinc
Date(Fix.) ($/MT)
Average 2044.57
31-08-2010 2047
27-08-2010 2011
26-08-2010 1996
25-08-2010 1942
24-08-2010 1970.5
23-08-2010 2014
20-08-2010 2032
19-08-2010 2098.5
18-08-2010 2105.5
17-08-2010 2101
16-08-2010 2041
13-08-2010 2032
12-08-2010 2010
11-08-2010 2023
10-08-2010 2059.5
09-08-2010 2128.5
06-08-2010 2110
05-08-2010 2081
04-08-2010 2073.5
03-08-2010 2059.5
02-08-2010 2000.5
Tin
Date(Fix.) ($/MT)
Average 20754.76
31-08-2010 21350
27-08-2010 21400
26-08-2010 20875
25-08-2010 20250
24-08-2010 20550
23-08-2010 20750
20-08-2010 20840
19-08-2010 21495
18-08-2010 21450
17-08-2010 21750
16-08-2010 20800
13-08-2010 20740
12-08-2010 20250
11-08-2010 20345
10-08-2010 20605
09-08-2010 21480
06-08-2010 20800
05-08-2010 20645
04-08-2010 19875
03-08-2010 19775
02-08-2010 19825