Monthly Metal Review

Overview

The dominant feature in the global economy remains the US trade war and the potential for it to escalate continues to weigh on market sentiment. While some progress has been made on the trade front with a US-Mexico trade deal, the fact it does not yet include Canada and there has been no major progress between US and China, suggests the lack of progress still outweighs what progress has been made. The value of the Chinese yuan has fallen some ten percent to 6.9347 against the US dollar, from around 6.3000 in the first quarter of the year. This goes some way to offsetting the tariffs the US has implemented, which in turn has rattled US President Donald Trump. Indeed, Trump now sees the rise in the US dol-lar, driven by interest rate hikes, as undermining his efforts to increase America’s competitive advantage That said, US preliminary GDP for the second quarter showed growth of 4.2 percent against the advanced reading for second quarter growth of 4.1 per cent (it should be remembered that GDP data is backward looking and the trade wars only start-ed to escalate from June onwards). Weakness in emerging market currencies is also a warning that rising US interest rates are a headwind for global growth and financial stability, which may play into Trump’s hand. If the dollar does start to weaken then that could soon underpin metals’ prices, especially if it coincided with the ending of the summer lull in the northern hemisphere. Although the US trade stance dominates events, it is im-portant to see the current weakness in metals’ prices in context. What started in early 2018 as a consolidation in markets after the strong rebounds and rallies in 2016 and 2017, has turned increas-ingly into a down turn. Business and investor sentiment has been negatively affected by Trump’s hostile stance over trade and the situation feels fairly grim, especially as it has become drawn out. The index of LME prices climbed 64 percent between No-vember 2015 and January 2018, it has since fallen, but in late-August the Index was still 43 percent above the 2015 lows. The fact copper prices managed to continue rebounding even when news of a wage deal was announced at Escondida, suggests the appetite to increase short exposure in the metals has diminished. The U.S. government revised its tally of second-quarter economic growth to an annualized 4.2 percent, up slightly from an earlier 4.1 percent. It was the best quarterly figure in almost four years, helping send Wall Street share markets higher. On a non-annualized basis, the economy grew 1 percent during the quarter. The UK economy grew 0 by.4 percent during the same period. The Federal Reserve left its benchmark interest rate unchanged and signaled further gradual rate hikes this year. Fed Chief Jerome Powell said he sees little risk of economic overheating. With US equities at or near record highs and with gold prices weak, there does not seem to be too much concern that the trade wars, or tightening US monetary policy, are about stop global growth. Growth may be weak and metals prices may have corrected, but both have potential to recover once a US-China trade deal is made. Gold hit a 19-month low as the dollar strengthened in mid-August and worries about China’s economy overshadowed the battered Turkish lira’s rebound and a rise for European stocks. The fall came as Turkey’s lira hit an all-time low and investors shied away from emerging markets as risk appetites faltered despite a lira rally. Germany posted a budget surplus of €48.1 billion in first-half 2018, the highest since German reunification in 1990. The news sparked calls for tax cuts and more public investment. China’s economy has been slowing. Retail sales this year grew at their slowest pace in over a decade. Private-sector wages are grow-ing at their slowest since the global financial crisis, and the stock market has fallen by one-fifth. In late August, the Bank of China injected Rmb149 billion (US$22 billion) into the banking system through loans to commercial banks. China is to expand infrastructure spending to stimulate the econo-my as the trade war escalates. Beijing plans to spend some US$ 1 billion on metals-heavy railway building, investing heavily in existing projects including a planned rail line between Sichuan Province and the Tibetan region. It restarted approving subway construction throughout the country.

Daily Prices

August 2018

Copper
Date(Fix.) ($/MT)
Average 6039.75
31-08-2018 6019
30-08-2018 6066.5
29-08-2018 6065
28-08-2018 6118
24-08-2018 6001
23-08-2018 5910.5
22-08-2018 6000
21-08-2018 6025.5
20-08-2018 5963
17-08-2018 5844
16-08-2018 5860
15-08-2018 5843
14-08-2018 6059
13-08-2018 6081
10-08-2018 6120
09-08-2018 6247
08-08-2018 6113
07-08-2018 6132
06-08-2018 6040
03-08-2018 6167
02-08-2018 6063
01-08-2018 6137
Silver
Date(Fix.) ($/OZ)
Average 15.00
31-08-2018 14.655
30-08-2018 14.665
29-08-2018 14.69
28-08-2018 14.9
24-08-2018 14.62
23-08-2018 14.625
22-08-2018 14.81
21-08-2018 14.785
20-08-2018 14.755
17-08-2018 14.605
16-08-2018 14.605
15-08-2018 14.825
14-08-2018 15.035
13-08-2018 15.185
10-08-2018 15.375
09-08-2018 15.48
08-08-2018 15.345
07-08-2018 15.47
06-08-2018 15.35
03-08-2018 15.36
02-08-2018 15.45
01-08-2018 15.475
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average 1201.86
31-08-2018 1206.85
30-08-2018 1202.35
29-08-2018 1204.3
28-08-2018 1212.75
24-08-2018 1189.95
23-08-2018 1187.3
22-08-2018 1196.85
21-08-2018 1194.1
20-08-2018 1188.75
17-08-2018 1176.7
16-08-2018 1179.65
15-08-2018 1186.7
14-08-2018 1195.3
13-08-2018 1204.4
10-08-2018 1211.65
09-08-2018 1215.5
08-08-2018 1212.35
07-08-2018 1215.4
06-08-2018 1212
03-08-2018 1207.7
02-08-2018 1217.6
01-08-2018 1222.75
Date(Fix.) ($/OZ)
Average 1201.55
31-08-2018 1204.65
30-08-2018 1199.825
29-08-2018 1204.25
28-08-2018 1212.5
24-08-2018 1193.825
23-08-2018 1189.825
22-08-2018 1196.75
21-08-2018 1192.525
20-08-2018 1186.55
17-08-2018 1177.55
16-08-2018 1180.025
15-08-2018 1184.35
14-08-2018 1196.15
13-08-2018 1202.375
10-08-2018 1213.025
09-08-2018 1214.925
08-08-2018 1210.95
07-08-2018 1213.875
06-08-2018 1210.825
03-08-2018 1212
02-08-2018 1216.525
01-08-2018 1220.875
Date(Fix.) ($/OZ)
Average 1201.25
31-08-2018 1202.45
30-08-2018 1197.3
29-08-2018 1204.2
28-08-2018 1212.25
24-08-2018 1197.7
23-08-2018 1192.35
22-08-2018 1196.65
21-08-2018 1190.95
20-08-2018 1184.35
17-08-2018 1178.4
16-08-2018 1180.4
15-08-2018 1182
14-08-2018 1197
13-08-2018 1200.35
10-08-2018 1214.4
09-08-2018 1214.35
08-08-2018 1209.55
07-08-2018 1212.35
06-08-2018 1209.65
03-08-2018 1216.3
02-08-2018 1215.45
01-08-2018 1219
Lead
Date(Fix.) ($/MT)
Average 2064.86
31-08-2018 2062
30-08-2018 2071
29-08-2018 2065.5
28-08-2018 2069
24-08-2018 2079
23-08-2018 2006
22-08-2018 1998
21-08-2018 1999
20-08-2018 1997
17-08-2018 1977
16-08-2018 2002
15-08-2018 1992
14-08-2018 2090
13-08-2018 2070
10-08-2018 2092
09-08-2018 2136.5
08-08-2018 2131
07-08-2018 2122.5
06-08-2018 2073
03-08-2018 2136
02-08-2018 2143
01-08-2018 2115.5
Zinc
Date(Fix.) ($/MT)
Average 2510.52
31-08-2018 2504
30-08-2018 2485
29-08-2018 2506
28-08-2018 2535
24-08-2018 2508
23-08-2018 2442
22-08-2018 2439
21-08-2018 2434
20-08-2018 2382
17-08-2018 2360
16-08-2018 2338
15-08-2018 2325
14-08-2018 2458
13-08-2018 2492.5
10-08-2018 2552.5
09-08-2018 2684.5
08-08-2018 2656
07-08-2018 2648
06-08-2018 2586
03-08-2018 2651
02-08-2018 2617
01-08-2018 2628
Tin
Date(Fix.) ($/MT)
Average 19278.41
31-08-2018 19025
30-08-2018 19000
29-08-2018 19010
28-08-2018 19200
24-08-2018 19250
23-08-2018 19065
22-08-2018 19175
21-08-2018 18875
20-08-2018 18850
17-08-2018 18680
16-08-2018 18675
15-08-2018 18725
14-08-2018 19075
13-08-2018 19405
10-08-2018 19560
09-08-2018 19650
08-08-2018 19775
07-08-2018 19775
06-08-2018 19725
03-08-2018 19875
02-08-2018 19780
01-08-2018 19975
Nickel
Date(Fix.) ($/MT)
Average 13432.95
31-08-2018 13010
30-08-2018 13290
29-08-2018 13415
28-08-2018 13460
24-08-2018 13310
23-08-2018 13140
22-08-2018 13570
21-08-2018 13680
20-08-2018 13560
17-08-2018 13240
16-08-2018 13115
15-08-2018 12985
14-08-2018 13345
13-08-2018 13680
10-08-2018 13635
09-08-2018 14060
08-08-2018 13920
07-08-2018 13750
06-08-2018 13225
03-08-2018 13130
02-08-2018 13225
01-08-2018 13780
Cobalt
Date(Fix.) ($/MT)
Average 63413.64
31-08-2018 64500
30-08-2018 65250
29-08-2018 65250
28-08-2018 64500
24-08-2018 64500
23-08-2018 64500
22-08-2018 64500
21-08-2018 64500
20-08-2018 64500
17-08-2018 64500
16-08-2018 64500
15-08-2018 64250
14-08-2018 64250
13-08-2018 64250
10-08-2018 62000
09-08-2018 61500
08-08-2018 56500
07-08-2018 55000
06-08-2018 59000
03-08-2018 64000
02-08-2018 66100
01-08-2018 67250