Monthly Metal Review
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
March relayed February's positive tendency of showings for the stocks and encouraging manufacturing surveys from across the world. Indexes of manufacturing activity and employment occupation indicated industrial recovery being on the track of efficient performing. In general the expansion of the world's economies continues to provide a positive and supportive backdrop for non-ferrous metals though there is a warn that sustained rises in the oil price would menace economic growth and price stability.
Some analysts believe that commodity prices may be overheated and are due for a contraction, however some others contest this view. Most analysts continue to expect high gains in 2011 based on the enormous consuming appetite of China and other developing countries expanding their infrastructure. Supportive to the afore said forecast is Bulgarian KCM that plans to keep its production output targets unchanged due to stable and constant demand, namely lead and zinc.
China has been so far the world's largest consumer of raw materials and the single biggest driver of the commodities bull-run. This month it has adopted a 5-year economic blueprint, aiming for fairer, greener growth. The policies having been declared this week in the Great Hall of the People in Beijing will set the tone for China's consumption of everything from iron ore to copper and cotton. At the core of the plan, which will cover 2011-2015, is a shift towards cleaner, slower growth. But analysts believe this is unlikely to be interpreted as decreasing of demand for raw materials and that the latter will remain robust over the next five years.
The earthquake that hit Japan on March 11th was the catalyst for commodities indiscriminate sell-off amid fears about the fall-out of the unfolding nuclear crisis in Japan. It had created "further risk aversions for a market that is already inundated by unknowns", said D. Brebner, Deutsche Bank in London. Devastating impact of seism and tsunami on the energy and commodities sector, as well as the seaports was huge.
Japan the world's third-largest goods consumer produces little of raw materials and imports ores for conversion into refined metals. At the moment the demand for minerals has been considerably diminished but it is supposed that rebuilding of infrastructure and strengthening of buildings and tsunami defenses will boost country's consumption of industrial metals.
Sentiment evolved from panicked selling to a tentative to return bullishness as investors assessed the effects of the quake and nuclear crisis and found them to be positive or neutral for most commodities.Sustainability of the non-ferrous metals market is always a balancing act. It competes with primary metals for market share, on the one hand, and with geographical and political implications, on the other.
Soaring metals prices gave an impetus to miners to go as far as Greenland, which can become the next extracting frontier. Exploration moves forward to the world regions, normally, considered logistically and politically super risky to justify investments. In fact, operation in risky areas is not necessarily a valuation destroyer and PLC takes in a variety of factors. Optimism of the companies facing giant discoveries can justify the costs. To that extent London Mining, which intends to launch an iron-ore mine in Greenland by 2015 has become one of the highest-capitalized junior miners listed on London's Aim Board. A vivid proof of the postulate that mining companies have to go to where the geology is.
Summarizing the developments of March it could be said that regardless significantly increased risks to the global economic outlook in the wake of turmoil in the North Africa and the Middle East, as well as shocking tragedy in Japan, the macroeconomic backdrop to commodity markets remains supportive.