Monthly Metal Review

Overview


    Commodities rose across the board as the two main drivers of prices — Chinese demand growth and US monetary policy — appeared to be aligning in their favour. Chinese manufacturing growth accelerated in October, with the latest purchasing managers’ index showing a rise to 54.7 from 53.8 in September, beating expectations, while the HSBC China manufacturing PMI moved up to 54.8 from 52.9. Same wise in India, the HSBC PMI rose to 57.2, from 55.1 in September. The unexpected strength of the manufacturing sector surprised economists, who attributed it to a recovery in domestic demand as the country’s buoyant economy gathers steam. However, some said the recovery might encourage the Reserve Bank of India to raise interest rates, potentially slowing the economy.
    At the same time, US GDP data that highlighted the sluggish growth of the world’s largest economy hardened market expectations for a fresh round of quantitative easing, sending the dollar lower. That boosted raw materials prices across the board, with industrial commodities such as oil and metals being matched by agriculturals and precious metals.   Precious metals were the biggest beneficiaries of the uncertain economic climate in the West, which is expected to push the Federal Reserve to unleash a second round of quantitative easing in November.
    In parallel, China announced it would hike two key interest rates by a quarter point each . The one-year lending rate in renminbi rise from 5.31% to 5.56%, while the one-year deposit rate goes up to 2.5% from 2.25%. China's interest rate hike could signal a period of slower, steadier growth for commodities prices, as the central bank tightens just enough - but not too much. The rate hike was both a vote of confidence in the economic recovery and an antidote to speculation, which is booming because inflation is higher than interest rates, encouraging people to park their savings in hard assets. The biggest magnet for speculators is property, but excess cash has also poured into commodity futures and other assets, pushing up prices. A pullback in property prices does not imply a fall in demand for construction-related metals such as steel and copper, since the government also plans a massive building program to increase the availability of affordable housing.
    In fact, the International Monetary Fund said in an upbeat look at commodities that the current era of higher prices and scarcity in base metals such as copper and tin could “continue for some time”. The warning came as the price of tin hit a fresh all-time high, up nearly 60% since January, copper rose to a two-year high and the cost of other metals such as nickel rose on the LME. Although the IMF was bullish across all commodities in its “World Economic Outlook” biannual report, it specifically highlighted base metals. “The medium-term balance of risks for prices should remain tilted toward the upside, particularly for copper.” 
    China did take advantage of such situation well ahead of the others and is now sitting on a profit of nearly $1.5 billion from a bold trading strategy in copper based on expectations of an emerging markets-led boom. Beijing’s bet that a ‘super-cycle’ in metals markets would keep copper prices high, despite the financial crisis, has paid off, according to dealers’ calculations. The substantial paper profits come after China’s State Reserves Bureau, the official body in charge of the country’s strategic commodities reserves, mopped up copper surpluses last year when the crisis was at its worst and prices had tumbled. As demand for metals has recovered, copper markets have tightened dramatically and prices have soared. Metals traders estimate that the SRB bought between 250,000 and 300,000 tons of copper, equal to nearly 2% of global annual production, in early 2009 at a price of less than $3,500 a ton. The SRB does not disclose its purchases. As copper prices rose this month to a two-year high of $8,500 a ton, traders and industry executives calculated Beijing’s paper profits to be about $1.2billion- $1.5billion.

Daily Prices

October 2010

Copper
Date(Fix.) ($/MT)
Average 8292.40
29-10-2010 8225
28-10-2010 8332
27-10-2010 8332
26-10-2010 8466
25-10-2010 8501
22-10-2010 8309.5
21-10-2010 8406
20-10-2010 8250
19-10-2010 8295
18-10-2010 8340.5
15-10-2010 8362.5
14-10-2010 8412
13-10-2010 8400
12-10-2010 8266
11-10-2010 8335.5
08-10-2010 8104.5
07-10-2010 8262
06-10-2010 8215.5
05-10-2010 8125
04-10-2010 8085.5
01-10-2010 8115
Silver
Date(Fix.) ($/OZ)
Average 23.39
29-10-2010 23.96
28-10-2010 23.73
27-10-2010 23.77
26-10-2010 23.48
25-10-2010 23.71
22-10-2010 23.05
21-10-2010 23.9
20-10-2010 23.71
19-10-2010 24.26
18-10-2010 24.02
15-10-2010 24.42
14-10-2010 24.49
13-10-2010 23.53
12-10-2010 23.03
11-10-2010 23.31
08-10-2010 22.37
07-10-2010 23.38
06-10-2010 22.92
05-10-2010 22.24
04-10-2010 22.03
01-10-2010 21.95
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average -
29-10-2010 -
28-10-2010 -
27-10-2010 -
26-10-2010 -
25-10-2010 -
22-10-2010 -
21-10-2010 -
20-10-2010 -
19-10-2010 -
18-10-2010 -
15-10-2010 -
14-10-2010 -
13-10-2010 -
12-10-2010 -
11-10-2010 -
08-10-2010 -
07-10-2010 -
06-10-2010 -
05-10-2010 -
04-10-2010 -
01-10-2010 -
Date(Fix.) ($/OZ)
Average -
29-10-2010 -
28-10-2010 -
27-10-2010 -
26-10-2010 -
25-10-2010 -
22-10-2010 -
21-10-2010 -
20-10-2010 -
19-10-2010 -
18-10-2010 -
15-10-2010 -
14-10-2010 -
13-10-2010 -
12-10-2010 -
11-10-2010 -
08-10-2010 -
07-10-2010 -
06-10-2010 -
05-10-2010 -
04-10-2010 -
01-10-2010 -
Date(Fix.) ($/OZ)
Average 1342.02
29-10-2010 1346.75
28-10-2010 1333.5
27-10-2010 1324.5
26-10-2010 1329.5
25-10-2010 1337.5
22-10-2010 1322.5
21-10-2010 1343.5
20-10-2010 1339
19-10-2010 1339
18-10-2010 1367.25
15-10-2010 1367.5
14-10-2010 1373.25
13-10-2010 1365.5
12-10-2010 1348.5
11-10-2010 1351.5
08-10-2010 1341.5
07-10-2010 1345
06-10-2010 1346.5
05-10-2010 1330.5
04-10-2010 1313.5
01-10-2010 1316.25
Lead
Date(Fix.) ($/MT)
Average 2379.67
29-10-2010 2437
28-10-2010 2480
27-10-2010 2532
26-10-2010 2541
25-10-2010 2560
22-10-2010 2494
21-10-2010 2475
20-10-2010 2381
19-10-2010 2377
18-10-2010 2373
15-10-2010 2377
14-10-2010 2402
13-10-2010 2408
12-10-2010 2275
11-10-2010 2270.5
08-10-2010 2199
07-10-2010 2281
06-10-2010 2293.5
05-10-2010 2275
04-10-2010 2265.5
01-10-2010 2276.5
Zinc
Date(Fix.) ($/MT)
Average 2372.14
29-10-2010 2392.5
28-10-2010 2464
27-10-2010 2515.5
26-10-2010 2556.5
25-10-2010 2552.5
22-10-2010 2489.5
21-10-2010 2457
20-10-2010 2383.5
19-10-2010 2376.5
18-10-2010 2365.5
15-10-2010 2380
14-10-2010 2399
13-10-2010 2381
12-10-2010 2309.5
11-10-2010 2302
08-10-2010 2232
07-10-2010 2302
06-10-2010 2298
05-10-2010 2260
04-10-2010 2205.5
01-10-2010 2193
Tin
Date(Fix.) ($/MT)
Average 26342.62
29-10-2010 25460
28-10-2010 26300
27-10-2010 26340
26-10-2010 26550
25-10-2010 26795
22-10-2010 26405
21-10-2010 26900
20-10-2010 26405
19-10-2010 26545
18-10-2010 26540
15-10-2010 26855
14-10-2010 27600
13-10-2010 26800
12-10-2010 26600
11-10-2010 26395
08-10-2010 26025
07-10-2010 26550
06-10-2010 26400
05-10-2010 25750
04-10-2010 24930
01-10-2010 25050