Monthly Metal Review
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
August marked the fifth year of financial woes, sparked by the U.S. sub-prime mortgage-market collapse. It spread to other nations where banks invested in sophisticated yet essentially worthless investment packages. In Q2, the eurozone economy dropped from stagnation to contraction. But European stocks at mid month were close to a five-month high, helped by better than expected GDP numbers from France and Germany, easing of euro-zone stresses, positive signs from the U.S., and sentiment that central banks are ready for more economic stimuli.
The U.S. Congressional Budget Office predicted U.S. GDP would shrink 0.5 percent next year in significant recession unless congress halts harsh, January-scheduled spending cuts and an expiration of tax cuts. Boeing took orders for 260 aircraft, the most since December. Housing showed modest gains while durable-goods orders were a bit weaker. Unemployment was essentially unchanged at 8.3 percent, but employment was up in manufacturing, professional and business services, and health care.
Chinese Premier Wen Jiabao said the government will increase efforts to boost the economy in the second half of 2012. Trade data showed miners were the heaviest losers as Chinese exports grew just 1 percent in July. Imports rose 4.7 percent. The Q2 Chinese economy expanded 7.6 percent from a year earlier as Europe’s problems reduced exports and a campaign against overheated property prices cooled domestic demand. Deutsche Bank reduced China-growth estimate for the three months through September from 7.9 percent to 7.5 percent.
Mining stocks had a thorny month, with many reporting declining profits and margins squeezed by higher costs and weaker commodity prices. One of the world's largest miners, at least by revenue, BHP Billiton mothballed its $30-billion Olympic Dam expansion in South Australia. The company announced a 35 percent drop in full-year profits to $15.4 billion after writing down assets. Revenues fell 0.7 percent to $72.2 billion. But a $24.4 billion cash flow let Billiton hike its dividend 11 percent.
Xstrata's first-half results show a 42-percent drop in operating profits to $2.5 billion, although results exceeded analysts' forecasts. It plans to spend $7.2 billion in 2012 and postpone $400 million in spending until 2013, Still, Xstrata approved a $360-million expansion of its McArthur River mine in Australia, intended as the world's biggest zinc mine.
Rio Tinto sold bonds worth $3 billion and reported first-half underlying earnings down 34 percent, to $5.2 billion. First-half profits fell 22 percent after copper, iron ore, and aluminum fell and costs rose. Net income dropped to $5.9 billion from $7.6 billion on year.
South African police shot at striking platinum workers, killing 34, at Lonmin's Marikana mine. Setting off a deep labor and political strife that is still evolving. Police said strikers, armed with clubs or machetes, charged them after drill operators refused to disperse, leading to at least 78 people being injured. Miners have been asking for a raise of some $1,000 a month, presently monthly wages are $500 to $600. The violence at these strikes sent shock waves through South Africa and the industry as a whole.