Monthly Metal Review

Overview

    Mounting concerns about the Eurozone debt and fears about the tightening of Chinese monetary policy were the headlines this month as the focus shifted away from the US quantitative easing program and global currency wars. After a sharp correction in base metal prices from their mid-November highs, prices now seem to have stabilized.
    In late November, the European Union finance ministers evenyually signed off on a €85 billion bail-out package for Ireland and approved the outlines of a new permanent mechanism for dealing with debt crises in the Eurozone, in an attempt to head off further contagion affecting borrowing for Portugal and Spain. Such news brought some much needed calm to the markets, with the euro hovering around €1.3 against the dollar in European trading.
    In the US, the Federal Reserve has launched an all-out effort to bolster the US economic recovery with a fresh round of quantitative easing - nicknamed QE2 - and will buy $600 billion of longer-term Treasury securities until the end of next June. That buying will come on top of some $300 billion in additional Treasury purchases from the Fed, as it reinvests the proceeds from maturing mortgage bonds back into government bonds. The underlying rationale of the Fed's policy action is to lower Treasury yields, force banks to lend money and push investors out of government debt into riskier securities. The start of QE2 is one of the most significant decisions the Fed has made in years. The move is probably the last chance to boost economic growth and tackle the 9.6% US unemployment rate as there is little chance that the new divided Congress will agree to further fiscal stimulus.
    For commodity producers, QE2 has provided such a tonic boost that the recent negative developments such as sovereign debt issue have failed to dampen the sentiment. Investor interest remains largely intact. Globally, in the commodity market, assets under management have reached a record $340 billion. The emerging markets, largely represented by Asia covering China and India, are currently driving global commodity demand, and particularly industrial metals.     In China, inflation is now too severe to be ignored - purchasing prices for industrial companies are rising at an annual rate of more than 8%. And China's inflation problem also extends to areas where the Fed's QE2 can have no effect - such as the price of eggs, which has jumped 25% over the past 12 months. Chinese inflation is nothing new, but the food situation is reaching a critical point - one of potential unrest, especially in poorer regions. This spectre of social disorder has prompted Chinese authorities to start attacking the problem on several fronts. The National Development and Reform Commission, China's economic planning body, has said its specific aim is to force down commodity prices by "clamping down strictly on market manipulation and other illegal activity, and curb excessive speculation". Firstly, it is making it more expensive to trade. The Shanghai Futures Exchange has pledged to increase margins for copper, aluminium, steel wire, gold and fuel oil to 10%. Then, there has been a sell-off of central stockpiles, in an attempt to flood the market with more commodities and force down prices.
    According to analysts from RBS, the State Reserve Bureau has made significant sales of hard commodities - including 50 kilotons of zinc and 30 kilotons of lead - which have been offered to the open market in recent weeks. There has simultaneously been a decrease in demand for imports, with a general decline across base metals in October, as the market is so well supplied.
    Eventually, Standard & Poor’s released a fresh base metals’ outlook, forecasting that copper, nickel and zinc prices will rise again in 2011, due mostly to a steady rise in demand and less abundant supply. Based on the Global Insight forecast of 3.3% global GDP growth in 2011, versus 3.8% global growth in 2010, worldwide demand for base metals should rise from 2010's levels. They also believe that in 2011, mine production will rise less rapidly, and that metal exchange inventories will decline again. However a market surplus of copper in 2010 should partly offset the forecasted demand increase and inventory decline in 2011.

Daily Prices

November 2010

Copper
Date(Fix.) ($/MT)
Average 8469.89
30-11-2010 8375
29-11-2010 8319.5
26-11-2010 8288
25-11-2010 8290
24-11-2010 8254.5
23-11-2010 8149
22-11-2010 8405.5
19-11-2010 8409
18-11-2010 8386
17-11-2010 8145
16-11-2010 8483.5
15-11-2010 8590
12-11-2010 8715
11-11-2010 8925
10-11-2010 8729
09-11-2010 8844.5
08-11-2010 8672
05-11-2010 8700
04-11-2010 8521.5
03-11-2010 8400.5
02-11-2010 8396
01-11-2010 8339
Silver
Date(Fix.) ($/OZ)
Average 26.54
30-11-2010 27.13
29-11-2010 26.74
26-11-2010 26.62
25-11-2010 27.44
24-11-2010 27.41
23-11-2010 27.31
22-11-2010 27.42
19-11-2010 27.07
18-11-2010 26.57
17-11-2010 25.2
16-11-2010 25.48
15-11-2010 26.01
12-11-2010 26.79
11-11-2010 27.75
10-11-2010 27.53
09-11-2010 28.55
08-11-2010 26.72
05-11-2010 26.14
04-11-2010 25.38
03-11-2010 25
02-11-2010 24.73
01-11-2010 24.91
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average -
30-11-2010 -
29-11-2010 -
26-11-2010 -
25-11-2010 -
24-11-2010 -
23-11-2010 -
22-11-2010 -
19-11-2010 -
18-11-2010 -
17-11-2010 -
16-11-2010 -
15-11-2010 -
12-11-2010 -
11-11-2010 -
10-11-2010 -
09-11-2010 -
08-11-2010 -
05-11-2010 -
04-11-2010 -
03-11-2010 -
02-11-2010 -
01-11-2010 -
Date(Fix.) ($/OZ)
Average -
30-11-2010 -
29-11-2010 -
26-11-2010 -
25-11-2010 -
24-11-2010 -
23-11-2010 -
22-11-2010 -
19-11-2010 -
18-11-2010 -
17-11-2010 -
16-11-2010 -
15-11-2010 -
12-11-2010 -
11-11-2010 -
10-11-2010 -
09-11-2010 -
08-11-2010 -
05-11-2010 -
04-11-2010 -
03-11-2010 -
02-11-2010 -
01-11-2010 -
Date(Fix.) ($/OZ)
Average 1369.89
30-11-2010 1383.5
29-11-2010 1357
26-11-2010 1355
25-11-2010 1373.25
24-11-2010 1372.5
23-11-2010 1377.5
22-11-2010 1356.5
19-11-2010 1342.5
18-11-2010 1350.25
17-11-2010 1337.5
16-11-2010 1349
15-11-2010 1368.5
12-11-2010 1388.5
11-11-2010 1398.5
10-11-2010 1390.5
09-11-2010 1421
08-11-2010 1388.5
05-11-2010 1395.5
04-11-2010 1381
03-11-2010 1345.5
02-11-2010 1351
01-11-2010 1354.5
Lead
Date(Fix.) ($/MT)
Average 2376.73
30-11-2010 2210
29-11-2010 2255
26-11-2010 2264
25-11-2010 2221
24-11-2010 2199
23-11-2010 2150
22-11-2010 2226.5
19-11-2010 2247
18-11-2010 2306
17-11-2010 2222
16-11-2010 2384
15-11-2010 2420
12-11-2010 2534
11-11-2010 2593.5
10-11-2010 2575
09-11-2010 2553.5
08-11-2010 2484
05-11-2010 2505
04-11-2010 2500
03-11-2010 2490
02-11-2010 2476
01-11-2010 2472.5
Zinc
Date(Fix.) ($/MT)
Average 2291.68
30-11-2010 2097
29-11-2010 2119.5
26-11-2010 2118
25-11-2010 2119
24-11-2010 2093.5
23-11-2010 2078.5
22-11-2010 2133
19-11-2010 2132
18-11-2010 2143
17-11-2010 2085
16-11-2010 2260
15-11-2010 2305
12-11-2010 2434
11-11-2010 2517.5
10-11-2010 2513.5
09-11-2010 2510.5
08-11-2010 2461.5
05-11-2010 2510
04-11-2010 2482.5
03-11-2010 2427
02-11-2010 2431
01-11-2010 2446
Tin
Date(Fix.) ($/MT)
Average 25519.09
30-11-2010 24135
29-11-2010 24400
26-11-2010 24060
25-11-2010 24275
24-11-2010 24350
23-11-2010 23950
22-11-2010 25200
19-11-2010 25250
18-11-2010 25395
17-11-2010 24350
16-11-2010 25150
15-11-2010 25565
12-11-2010 26775
11-11-2010 27100
10-11-2010 27050
09-11-2010 27350
08-11-2010 26390
05-11-2010 26400
04-11-2010 26600
03-11-2010 25850
02-11-2010 25905
01-11-2010 25920