Monthly Metal Review
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
During the month of July, financial markets have been under pressure, from the late vote on the US budget.
Gold and other precious metals have seen their prices rise again, while the US dollar initially weak, recovered grounds at 1.42 against the Euro, once the vote went through.
Meanwhile some economic indicators are not showing any strong expansion in the quarters to come and this has for the time being just affected the equity markets.
In Chile, the strike at Escondida mine is lasting, as negotiations seem to be difficult and the mine has had to declare “Force Majeure”. Some other Chilean mines seem to also risk some strikes. On the back of this situation, copper prices have been able to rise during June, reaching about 9700 $ towards the end of June.
Today, in spite of economic worries in almost every part of the world, consumption of most commodities continues to grow - in some cases, strongly.
And yet investors have turned tail. Their positioning in US commodity futures, as reported by the Commodity Futures Trading Commission, is the least bullish since July last year.
Investors have become increasingly unsure about the outlook for commodities amid signs that tighter credit conditions are holding back growth in China, while high energy prices and the spectre of sovereign default have knocked US and European growth.
Traders and analysts say that the underlying fundamentals of physical supply and demand remain robust for many commodities. Indeed, there are early signs of a pick-up in interest in the wake of recent price falls.
According to the opinion of market specialists investors have overreacted to the negative news. They feel that it is expected to have a tremendous price increase in commodities in the next quarter and it is a good time to buy. On the Asian market China has issued in July fresh orders to slash capacity at steel and base metal smelters as it revamps its industrial sector. The move could backfire and boost capacities instead, as outdated units are replaced and modernized.
The world's top consumer of copper, aluminum and steel told local governments to phase out more than 2 million tonnes of aluminum, copper, lead and zinc smelting capacity in a plan to decrease energy-heavy and polluting industries, around 13 percent more than objectives set in May.
It was confirmed in July that logistics and warehousing company CWT Group will acquire a major stake in Marc Rich-founded MRI Trading for $94 million. CWT Group will have access to as much as 16.4% of the addressable market for copper concentrates. CWT certainly sees two opportunities: to profit from metal trading, and through its metal traders to ensure that its warehouses are stocked, expanded and used optimally. They say that all eyes are now on independent warehousing company Steinweg. Will it too seek to integrate itself with a trading company? Recent developments testify to the fact that the market of minerals remains optimistic, intriguing and highly promising.