Monthly Metal Review
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
Political change and uncertainty dominated in May as economic concerns deepened and anti-austerity voters rejected ruling parties in France, Greece, and Westphalia, Germany's largest state.
The reelection of Vladimir Putin to a third term as Russia's president offered some form of stability in that region. However, in France, voters elected pro-growth Socialist Fran�ois Hollande. Greeks rejected politicians who supported cutbacks and higher taxes for a bailout, but winners couldn't form a government. New Greek parliamentary elections June 17 will be a virtual referendum on whether the country will remain in the European Union. Some major banks told clients to prepare for a rally if Greece exits. London risk analysts warned Greek departure could erase 10 percent from the value of British banks.
The party of German Chancellor and austerity advocate Angela Merkel lost to a center-left challenger in North Rhine-Westphalia. EU leaders at a G-8 meeting at Camp David pressed Germany for growth policies. Skittish financial markets braced for policy shifts, austerity fatigue and, perhaps, a fractured EU. Germany's encouraging 0.5 percent GDP growth in Q1 may help ease fears.
Asia markets rallied on Chinese Premier Wen Jiabao's call for proactive policies to foster growth. Wen suggested increasing loans for infrastructure projects, tax cuts, credit for small and medium busi-nesses, and lower financing costs. The head of Xstrata's copper division predicted China's demand will rise in 2012's second half citing underlying market strength, Charlie Sartain said Xstrata will increase copper output by 60 percent in the next three years.
The Euro traded at 1.32 on May 1st and finished the month of May at 1.24 against the USD, which represent a 6% fall.
Moody's cut the credit-worthiness rating for 16 Spanish and 26 Italian banks. Spain announced an $11-billion bailout and takeover of Bankia.
The US reported marginally better job numbers as the unemployment rate fell a tenth of a point to 8.1 percent and employers added 115,000 workers. But joblessness in the eurozone rose to 10.9 percent. Britain was officially in recession, although Royal Bank of Scotland Q1 operating profits were up 4 percent to $1.9 billion.
Billiton and Rio Tinto reassessed spending as shareholders pushed for cost controls and higher short-term returns. Billiton officials said they wouldn't spend a planned $80 billion. Citigroup predicted mining-sector spending would drop from an estimated 34 percent hike to 13 percent.
China's April PMI rose .02 to 53.3, above growth-friendly 50 for five months, and inflation fell from 3.6 percent to April's 3.4. China lowered the amount banks must reserve and set a 7.5 percent 2012 growth target. The US PMI also rose, from 53.4 to April's 54.8, and home-foreclosure numbers shrunk in May for a third month.