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
The Bloomberg commodity index which reflects the price of 20 commodities (including metals, petroleum, grains and others) dropped to a 5yr low, and is 12% lower this quarter. This is a direct consequence of a strengthening dollar, and concerns over weakening growth in China.
Figures released this month showed factory output in China is growing at its slowest level in 6 years. Furthermore the Peoples Bank of China began providing US$81.4 billion, 500 billion yuan, of liquidity to China’s five biggest banks. Each received 100-billion yuan in stimulus. Beijing’s 7.5-percent GDP-growth target is threatened by a property slump. China’s biggest banks plan to lower interest rates on home mortgages, reflecting Beijing’s concern about property-market health. Analysts at Bank of America Merrill Lynch said China may be entering an asset-deflation phase. They argued that China resembles early-1990s Japan, when a real-estate bubble began deflating.
The dollar hit a 4 year high whilst the euro sank to a 22 month low as Washington led a military coalition against militants in Iraq and Syria.
The U.S. Federal Reserve held key interest rates at near zero, with no suggestion of a near-term rise. The Fed renewed its pledge to keep super-low rates for a "considerable time," but indicated it could raise borrowing costs faster than expected when it moves.
U.S. manufacturing activity was near a 4.5-year high in September. Markit‘s preliminary U.S. Manufacturing PMI was at 57.9, unchanged from August, when it touched its highest level since April 2010. Factory employment increased for a second straight month. U.S. consumer prices fell.
The Bank of England kept key interest rates at a historic 0.5-percent low. The GBP was supported by Scotland’s vote to stay in the UK. The European Central Bank cut its benchmark rate to 0.05 percent, from 0.15, and tried to push funds into flagging eurozone economies to counter deflationary pressures.
Germany’s Ifo business-sentiment index dropped in September for a fifth month. The Purchasing Managers Index (PMI) fell to 50.3, lowest level since June 2013, hurt by fallout from western tensions with Russia.
Eurozone inflation was 0.4 percent in August, a fraction of the ECB’s goal of almost 2 percent.
Australia’s second-quarter spending on resource exploration hit a seven-year low. The Association of Mining and Exploration Companies said the cutback could have long-term effects on discoveries.
Australia legislators abolished a controversial 30-percent federal tax on mining profits on coal and iron ore. The Resource Rent tax was introduced in 2012 by a previous government to fund social-welfare programs.
The London Metal Exchange launched its new clearing house, LME Clear. Officials said Clear would accept the renminbi as collateral later this year.