Monthly Metal Review

Overview

    Commodities markets rallied sharply in mid-June, hitting their highest level in a month as investors rediscovered some risk appetite and the dollar fell. The gains came as the Eurozone industrial production rose 9.5% in April from a year earlier, the biggest increase since the data series began in 1991, easing fears that the Eurozone debt crisis would hit the manufacturing sector and so knock demand for base metals and bulk minerals. 
      However problems in the debt-laden Eurozone and other vulnerable countries in Eastern Europe, such as Hungary and Romania somehow clouded such positive macro data. Compounding a febrile atmosphere was a warning from Fitch Ratings that the UK faced a "formidable" challenge in reducing its budget deficit and would need to speed up cuts to retain its triple-A credit rating.
    The other ongoing concern dogging commodity markets, that Chinese demand growth may slow on the back of monetary policy tightening, also appears to have receded. In fact, China’s surprise decision to allow greater flexibility for its currency spurred LME base metals and most precious metals prices to rise substantially. On June 19, the People’s Bank of China announced its decision “to proceed further with reform of the renminbi exchange rate regime and to enhance its exchange rate flexibility”. The announcement effectively ends the renminbi’s de facto peg to the US dollar and paves the way for its appreciation against the greenback, as demanded by the US and other major partners. The central bank cited economic developments in China and abroad as playing an important role in the decision to revert to a managed float against a basket of currencies. A more valuable renminbi would boost Chinese purchasing power for commodities, but it would also make Chinese exports of manufactured goods less competitive, reducing overall raw materials demand. China is the world’s largest importer of a range of commodities. Its growing appetite for raw materials has transformed the commodities markets over the past decade, pushing prices up to record levels.
    In addition, China will also scrap export the 5% export tax rebate on some copper, lead, nickel and tin products from mid-July. The rebates, introduced last year to help exporters struggling with a downturn in demand, will be cancelled from July 15, according to the ministry of finance. The affected products include some semi-finished or fabricated products made from copper, lead or zinc, such as rods, bars, profiles, and wires. The move is intended to avert any trade friction, and is line with Beijing's attempts to streamline some key energy-intensive industries and to reorient the economy away from reliance on exports.
    In parallel, the home appliance scrappage scheme will be extended up to the end of 2011. It may also cover the whole country instead of just the ten pilot cities. The home appliance scheme is one of the most effective stimulus policies to drive domestic consumption since the global recession began. It includes televisions, refrigerators, washing machines, air conditioners and computers. Of course, given the use of many copper components by the sector, this is good news for copper consumption.
    In Australia, mining deals have hit a 5-years low after the controversial Rudd tax plan. There have been 47 announced deals valued at $914 million this quarter compared with 89 deals worth 9-11 billion in the quarter ended June 30 a year ago. With a 40% tax on mine profits, Australia will have the highest tax rate in the world for mining companies and risks losing its relevance as a market for investment in global mining companies.

Daily Prices

June 2010

Copper
Date(Fix.) ($/MT)
Average 6499.30
30-06-2010 6515
29-06-2010 6585
28-06-2010 6800
25-06-2010 6604.5
24-06-2010 6525.5
23-06-2010 6576
22-06-2010 6460
21-06-2010 6607
18-06-2010 6315.5
17-06-2010 6480.5
16-06-2010 6592.5
15-06-2010 6625
14-06-2010 6610
11-06-2010 6462
10-06-2010 6292
09-06-2010 6295.5
08-06-2010 6091
07-06-2010 6157
04-06-2010 6450
03-06-2010 6620.5
02-06-2010 6605
01-06-2010 6715
Silver
Date(Fix.) ($/OZ)
Average 18.45
30-06-2010 18.74
29-06-2010 18.57
28-06-2010 19.11
25-06-2010 18.65
24-06-2010 18.38
23-06-2010 18.91
22-06-2010 18.625
21-06-2010 19.37
18-06-2010 18.77
17-06-2010 18.5
16-06-2010 18.51
15-06-2010 18.42
14-06-2010 18.43
11-06-2010 18.31
10-06-2010 17.98
09-06-2010 18.27
08-06-2010 18.34
07-06-2010 17.36
04-06-2010 17.76
03-06-2010 18.27
02-06-2010 18.43
01-06-2010 18.3
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average -
30-06-2010 -
29-06-2010 -
28-06-2010 -
25-06-2010 -
24-06-2010 -
23-06-2010 -
22-06-2010 -
21-06-2010 -
18-06-2010 -
17-06-2010 -
16-06-2010 -
15-06-2010 -
14-06-2010 -
11-06-2010 -
10-06-2010 -
09-06-2010 -
08-06-2010 -
07-06-2010 -
04-06-2010 -
03-06-2010 -
02-06-2010 -
01-06-2010 -
Date(Fix.) ($/OZ)
Average -
30-06-2010 -
29-06-2010 -
28-06-2010 -
25-06-2010 -
24-06-2010 -
23-06-2010 -
22-06-2010 -
21-06-2010 -
18-06-2010 -
17-06-2010 -
16-06-2010 -
15-06-2010 -
14-06-2010 -
11-06-2010 -
10-06-2010 -
09-06-2010 -
08-06-2010 -
07-06-2010 -
04-06-2010 -
03-06-2010 -
02-06-2010 -
01-06-2010 -
Date(Fix.) ($/OZ)
Average 1232.90
30-06-2010 1244
29-06-2010 1234.5
28-06-2010 1261
25-06-2010 1254
24-06-2010 1236.25
23-06-2010 1226.5
22-06-2010 1236
21-06-2010 1254
18-06-2010 1256
17-06-2010 1245
16-06-2010 1234.5
15-06-2010 1225
14-06-2010 1223.75
11-06-2010 1220
10-06-2010 1217.5
09-06-2010 1233.5
08-06-2010 1246
07-06-2010 1215
04-06-2010 1203.5
03-06-2010 1215
02-06-2010 1215
01-06-2010 1227.75
Lead
Date(Fix.) ($/MT)
Average 1703.95
30-06-2010 1690
29-06-2010 1741.5
28-06-2010 1828
25-06-2010 1802
24-06-2010 1780.5
23-06-2010 1782
22-06-2010 1766
21-06-2010 1786
18-06-2010 1706.5
17-06-2010 1715
16-06-2010 1701
15-06-2010 1685
14-06-2010 1674
11-06-2010 1676
10-06-2010 1655.5
09-06-2010 1655
08-06-2010 1562.5
07-06-2010 1558.5
04-06-2010 1621
03-06-2010 1640.5
02-06-2010 1709.5
01-06-2010 1751
Zinc
Date(Fix.) ($/MT)
Average 1742.84
30-06-2010 1730
29-06-2010 1759.5
28-06-2010 1852
25-06-2010 1810.5
24-06-2010 1804
23-06-2010 1775.5
22-06-2010 1727
21-06-2010 1778
18-06-2010 1703.5
17-06-2010 1727.5
16-06-2010 1778
15-06-2010 1772.5
14-06-2010 1742.5
11-06-2010 1721.5
10-06-2010 1685.5
09-06-2010 1738.5
08-06-2010 1623
07-06-2010 1595
04-06-2010 1665.5
03-06-2010 1741
02-06-2010 1791
01-06-2010 1821
Tin
Date(Fix.) ($/MT)
Average 17319.77
30-06-2010 17475
29-06-2010 17750
28-06-2010 18110
25-06-2010 18050
24-06-2010 17900
23-06-2010 17810
22-06-2010 17875
21-06-2010 17980
18-06-2010 17450
17-06-2010 17300
16-06-2010 17700
15-06-2010 17080
14-06-2010 16925
11-06-2010 16845
10-06-2010 16500
09-06-2010 16395
08-06-2010 15830
07-06-2010 16150
04-06-2010 17245
03-06-2010 17585
02-06-2010 17650
01-06-2010 17430