Monthly Metal Review
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
Commodities closed out the year on a negative note as prices fell across the board. A fresh 8 1/2-year high in the U.S. dollar didn't help; the U.S. Dollar Index was last trading up by 0.3 percent to 90.26. Meanwhile, stock markets slipped from record high territory amid profit-taking by investors.
The U.S. economy grew at an annualized 5-percent rate in third-quarter 2014, the biggest gain in 11 years. But November durable-goods orders fell 0.7 percent on lower corporate investment and weaker military-equipment demand. Federal Reserve Chair Janet Yellen said U.S. interest rates are likely to be held near zero, at least through first-quarter 2015. She said rates would rise gradually and might not return to more-normal levels until 2017.
The US can satisfy almost 90 percent of its energy needs domestically. The EU imports 88 per cent of its oil. There are winners and losers, but economists estimate that every US$20 drop in the oil price boosts global growth by 0.4 percent within two to three years.
Russia’s rouble plunged in value as the price of Russia’s main export, oil, dropped drastically. The Bank of Russia raised its key interest rate to 17 percent, megaprojects were shelved, and grain exports curbed. Western sanctions over Moscow's activity in eastern Ukraine and Russia’s ban on Western food imports have kept inflation high and restricted access to Western financing. The bank warned of a 4.5- to 4.7-percent 2015 GDP shrinkage with oil at US$60 a barrel. Officials said inflation could climb above 10 percent.
China’s factory output fell for a second month in December. The HSBC/Markit flash China manufacturing PMI fell to 49.5 from November’s final 50. China’s central bank cut interest rates in late November as growth appeared set to fall below 2014’s 7.5-percent target. China’s top planning body approved a new, US$13-billion Beijing airport. The government is speeding infrastructure spending, including highways and 28 new rail lines, to cushion a slowdown. Most economists expect about 7.3-percent 2014 economic growth. Beijing is to lower its 2015 annual growth target.
The European Central Bank cut its eurozone growth and inflation forecasts, expecting the bloc to grow by 0.8 percent in 2014, 1.0 percent in 2015 and 1.5 percent in 2016.
ECB President Mario Draghi said policy makers will consider robust stimuli in first-quarter 2015, prompting the head of Germany’s Bundesbank to say QE may not work in Europe. The ECB left super-low interest rates unchanged. The Bank of England also kept key interest rate at 0.5 percent and bond buying at US$588 billion. The euro area experienced mediocre economic growth and an 11.5-percent jobless rate.
The UK government announced an 800-million (US$1.3 billion) property-tax cut. The government, facing a May general election, reduced transaction taxes, a stamp duty, on most home sales. It came amidst a cooling housing market, although its impact could be blunted by tougher mortgage rules.