Monthly Metal Review

Overview

Tensions in financial markets are running high as the lack of progress on US trade talks and a US Federal Reserve that is still tightening monetary policy, are unnerving investors and busi-nesses alike. Even the US markets, which has seen strong growth this year, are now under pressure with the S&P 500 on course to see its largest quarterly fall since the financial crisis – the index is down 15 percent from the end of September highs. Equities in Europe and Asia have also seen widespread corrections. Year-to-date, the Euro Stoxx 50 is down 15 percent, the Nikkei is down 11 percent and China’s CSI 300 is off 25%. The metals prices have not followed the other markets lower recently, but that is because the metals have already weakened, with prices down an average of 28.5 percent at the lows seen in the second half, com-pared with the highs seen in the first half. The concern now is that the down turn in economic activity gains too much momen-tum before a new trade deal is worked out. At the G20 meeting in early December, Chinese President Xi Jinping and US President Donald Trump called a 90 day trade truce, but while that gave the markets a boost, it was short-lived as traders seems nervous that any signs of progress could easily be undone by a tweet from Trump. As such, it seems likely the market will want a signed deal before it puts the trade war behind it. If the US and China can come up with a new deal, then we would expect confidence in the downstream supply chain to pick-up and for restocking to follow. In November, China’s imports from the US were 25 percent lower than a year earlier, although this has meant China is trying to boost imports from other regions, but it will take time for other regions to build up extra capacity. The other measures taken by China to ease the impact of the trade war are also likely to take time to take effect, so it could be than once a new trade deal is signed, Chinese growth rebounds strongly as trade resumes and fiscal stimulus kicks-in. Until a trade deal is struck, the current situation looks gloomy with purchasing managers indices (PMI) falling, the JP Morgan Global Manufacturing PMI was at 52 in November, unchanged from October’s level, but still the lowest it had been for 23 months. The bulk of third quarter GDP annualised data has been weak too: Japan (-0.6%), EU (0.2%), German (-0.2%) and China (6.5%), with US GDP falling to 3.4% from 4% in the second quarter. One indicator of financial stress is the US treasury market, the 10-year yield has fallen to 2.75 percent, this despite the December 25 basis point interest rise. Earlier in the year the yield had been at 3.2 percent, which shows investors are prepared to take a lower yield to benefit from the safety a treasury bond provides. In addition, the US treasury two and five year yields have inverted, meaning the two year yield is higher than the five-year yield, which tends to be a precursor to a recession. Likewise, gold prices have been trending higher, reaching $1,266.70 per oz on December 20, up from August’s low of $1,160.30 per oz, which is another sign that investors are parking their money in safe-havens as they sell higher risk assets. The interest differential between the US and other major currencies is keeping the dollar index in high ground, it was recently quoted at 96.50, but it has been fairly flat since the start of November, this despite the US interest rate rise. Sterling has been particularly weak on the back of the Brexit negotiations fiasco, dropping to a low of 1.2477, the lowest since April 2017, the Euro at 1.1400 is off the lows seen in November, but the EUs standoff with Italy over its budget is likely to cap the upside on the euro, while the yen at 110.90 is strengthening and seems to have regained its status as a safe-haven. With Trump shutting down the federal government it does look as though there is no end of issues that could keep markets nervous. All in all, the base metals prices are range bound in low ground waiting for more direction from trade talks. However, not everything looks gloomy in the short term. The falling crude oil price since October 2018 has helped reduce the import bills of major emerging economies. Many trade ana-lysts expect the USD to remain at current levels which should bring some respite to the developing countries that were already caught in the midst of the US-China trade war. In short, how the trade-war is played by the US and the extent of slowdown in the Chinese economy during next few months will be major drivers in deciding the direction that the world will take in 2019.

Daily Prices

December 2018

Copper
Date(Fix.) ($/MT)
Average 6094.21
31-12-2018 5965
28-12-2018 6018
27-12-2018 5990
24-12-2018 5931.5
21-12-2018 5987
20-12-2018 6015
19-12-2018 5987
18-12-2018 6043
17-12-2018 6095.5
14-12-2018 6104
13-12-2018 6196
12-12-2018 6151
11-12-2018 6163
10-12-2018 6112
07-12-2018 6173
06-12-2018 6112
05-12-2018 6162
04-12-2018 6278
03-12-2018 6307
Silver
Date(Fix.) ($/OZ)
Average 14.70
31-12-2018 15.465
28-12-2018 15.295
27-12-2018 15.055
24-12-2018 14.675
21-12-2018 14.69
20-12-2018 14.77
19-12-2018 14.645
18-12-2018 14.655
17-12-2018 14.6
14-12-2018 14.58
13-12-2018 14.68
12-12-2018 14.655
11-12-2018 14.64
10-12-2018 14.53
07-12-2018 14.485
06-12-2018 14.38
05-12-2018 14.48
04-12-2018 14.545
03-12-2018 14.385
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average 1249.89
31-12-2018 1281.65
28-12-2018 1277.25
27-12-2018 1271.1
24-12-2018 1261.25
21-12-2018 1257.6
20-12-2018 1255
19-12-2018 1248.6
18-12-2018 1248.8
17-12-2018 1239.1
14-12-2018 1239.15
13-12-2018 1244.45
12-12-2018 1244.75
11-12-2018 1248.25
10-12-2018 1246.8
07-12-2018 1241.2
06-12-2018 1236.45
05-12-2018 1236.15
04-12-2018 1239.25
03-12-2018 1231.05
Date(Fix.) ($/OZ)
Average 1250.14
31-12-2018 1281.65
28-12-2018 1278.125
27-12-2018 1269.55
24-12-2018 1261.25
21-12-2018 1257.875
20-12-2018 1257.375
19-12-2018 1251.8
18-12-2018 1247.55
17-12-2018 1240.375
14-12-2018 1237.25
13-12-2018 1243.6
12-12-2018 1245.25
11-12-2018 1246.775
10-12-2018 1246.075
07-12-2018 1242.25
06-12-2018 1239.5
05-12-2018 1236.025
04-12-2018 1239.775
03-12-2018 1230.675
Date(Fix.) ($/OZ)
Average 1250.40
31-12-2018 1281.65
28-12-2018 1279
27-12-2018 1268
24-12-2018 1261.25
21-12-2018 1258.15
20-12-2018 1259.75
19-12-2018 1255
18-12-2018 1246.3
17-12-2018 1241.65
14-12-2018 1235.35
13-12-2018 1242.75
12-12-2018 1245.75
11-12-2018 1245.3
10-12-2018 1245.35
07-12-2018 1243.3
06-12-2018 1242.55
05-12-2018 1235.9
04-12-2018 1240.3
03-12-2018 1230.3
Lead
Date(Fix.) ($/MT)
Average 1965.47
31-12-2018 2009
28-12-2018 2033
27-12-2018 1996.5
24-12-2018 1976.5
21-12-2018 1958
20-12-2018 1961.5
19-12-2018 1942
18-12-2018 1939
17-12-2018 1912
14-12-2018 1927
13-12-2018 1953
12-12-2018 1965
11-12-2018 1969.5
10-12-2018 1975.5
07-12-2018 1965
06-12-2018 1947
05-12-2018 1976
04-12-2018 1974
03-12-2018 1964.5
Zinc
Date(Fix.) ($/MT)
Average 2625.61
31-12-2018 2510.5
28-12-2018 2542.5
27-12-2018 2553
24-12-2018 2536
21-12-2018 2585
20-12-2018 2600
19-12-2018 2596
18-12-2018 2600
17-12-2018 2580
14-12-2018 2560
13-12-2018 2685
12-12-2018 2664
11-12-2018 2675
10-12-2018 2678
07-12-2018 2709
06-12-2018 2692
05-12-2018 2705.5
04-12-2018 2740
03-12-2018 2675
Tin
Date(Fix.) ($/MT)
Average 19242.63
31-12-2018 19500
28-12-2018 19425
27-12-2018 19475
24-12-2018 19405
21-12-2018 19400
20-12-2018 19375
19-12-2018 19260
18-12-2018 19300
17-12-2018 19500
14-12-2018 19365
13-12-2018 19410
12-12-2018 19180
11-12-2018 19020
10-12-2018 18930
07-12-2018 18930
06-12-2018 18950
05-12-2018 19200
04-12-2018 19110
03-12-2018 18875
Nickel
Date(Fix.) ($/MT)
Average 10836.84
31-12-2018 10595
28-12-2018 10670
27-12-2018 10650
24-12-2018 10800
21-12-2018 10785
20-12-2018 10885
19-12-2018 10775
18-12-2018 10885
17-12-2018 10935
14-12-2018 10740
13-12-2018 10800
12-12-2018 10720
11-12-2018 10765
10-12-2018 10740
07-12-2018 10815
06-12-2018 10855
05-12-2018 11020
04-12-2018 11265
03-12-2018 11200
Cobalt
Date(Fix.) ($/MT)
Average 55289.47
31-12-2018 55500
28-12-2018 55500
27-12-2018 55500
24-12-2018 55500
21-12-2018 55000
20-12-2018 55000
19-12-2018 56000
18-12-2018 58000
17-12-2018 52000
14-12-2018 55250
13-12-2018 55250
12-12-2018 55250
11-12-2018 55250
10-12-2018 55250
07-12-2018 55250
06-12-2018 55250
05-12-2018 55250
04-12-2018 55250
03-12-2018 55250