Monthly Metal Review
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
This month it was reported that China’s top planning body was warming up to permit foreign commodities exchanges, to open warehouses in free-trade zones. Which if successful, could give the Lon-don Metal Exchange (LME) coveted mainland access. The LME is highly likely to be the first in line for approval, possibly in Shanghai’s new free-trade zone.
However, China's annual GDP growth slowed to 7.5 percent in the second quarter from 7.7 in the first, matching forecasts but putting pressure on officials favoring domestic consumption before growth. China uses about 42 percent of the world's copper and is the world’s largest car market by volume. China passenger vehicle shipments were 1.4 million units in June, up 9.7 percent on-year, according to the China Passenger Car Association.
Not far in Indonesia, underground production resumed at Freeport-McMoRan’s Grasberg mine, following an Indonesian investigation of fatal May accidents. Grasberg is the world’s largest gold and third-largest copper mine.
The Democratic Republic of Congo (DRC) postponed enforcement of its threatened ban on export of copper and cobalt concentrates until January 1. DRC officials have been reported hiking taxes on cobalt-concentrate exports by $40 per metric tonne. The ban would require miners to process metals and minerals in the DRC.
Eurozone private-sector industry returned to growth in July, according to the Market Eurozone Purchasing Managers' Index (PMI). The business-output index rose from 48.7 in June to July’s 50.4, an 18-month high. European Central Bank (ECB) Presi-dent Mario Draghi pledged to keep interest rates low after borrowing costs for euro-region firms rose in June to an eight-month high.
While Europe’s June new-car sales were the weakest since 1996, with demand falling to 1.134-million vehicles, down 5.6 percent from last June. First-half sales dropped 6.6 percent. The UK was the only major market to expand, up 13.4 percent in June and 10 percent for the first half. First-half sales in Germany fell 8.1 percent on-year. France plunged 11.2 percent.
U.S. Federal Reserve Chairman Ben Bernanke confirmed plans to taper asset purchases later this year, but said reduction must be tied to sustained labor-market improvement or inflation increase. He said the $85-billion monthly stimulus helping keep interest rates low would continue if needed. U.S. employers added a robust 195,000 jobs in June whilst new-home sales surged 8.3 percent from May to an annualized 497,000, the highest in five years.
LME warehouses were reported reducing incentives paid to attract metal into locations like Detroit to cut back queues. The exchange said it may require warehouses to deliver out more metal than loaded in where metal-withdrawal queues exceed 100 days. Participants will be consulted until Sept. 30 and the board is to review the plan in October. If approved, it would take effect April 1.
Bank-owned warehouses faced scrutiny. The U.S. Federal Reserve was reviewing a 2003 decision allowing bank holding companies to trade physical commodities. A Senate panel questioned whether banks should control warehouses and other infra-structure used to store and transport essential goods. The Commodity Futures Trading Commission was gathering information on warehouse operations.