Base metals have come under pressure in recent weeks amid growing concerns over the possibility of a US recession and knock-on effects in the rest of the world. Copper, the bellwether of the base metals sector, has fallen almost 18 percent since the start of October because of a substantial increase of almost 55,000 tons in LME stocks. Zinc has plunged some 47 percent this year as supplies are set to improve. Lead sank below the US$ 3,000 a ton level after Ivernia said it was confident that shipments would restart from the Magellan mine in Australia in the first quarter of 2008. Gold hit its record high of US$ 845 an ounce, helped by renewed weakness in the US dollar, which fell to a new record low against the euro. Gold has since then retreated to US$ 800 an ounce.

US house prices fell at their fastest rate in more than two decades during the third quarter, according to a measure of house prices widely followed by investors. The S&P/Case-Shiller index suggests that house prices nationwide fell 1.7 percent from the second quarter and were down on average by 4.9 percent year on year.
Non defense capital good orders decreased in October by 3.1 percent, giving signs of a possible slowing economy.
Business confidence in Germany, Europe’s largest economy, rose unexpectedly in November, according to a closely-watched survey. The increase in the Munich-based Ifo’s business climate index will damp speculation that the European Central Bank might be forced to cut its main interest rate next year. It suggested that economic growth was only gradually slowing - despite the euro’s rise to record levels and higher borrowing costs.
China ’s trade surplus rose to a record US$ 27.1 billion in October. China’s accumulated trade surplus for the first 10 months of the year reached US$ 212.4 billion, an increase of 59 percent from the same period a year earlier.
 
Japan ’s exports hit a record high in October, boosted by European and Asian demand. Overall exports increased 13.9 percent from a year earlier to a record US$ 69 billion despite a stronger yen. Imports rose 8.6 percent, boosted by crude oil import costs, leaving Japan with a trade surplus of US$ 9.1 billion, up 66.1 percent from a year earlier.

In London, the Lead cash settlement price was US$ 3,059.50 per ton while the Zinc cash settlement price was US$ 2,495 per ton on November 29, 2007. 
 
Zinc was under intense pressure from some stock increases and concerns that global mine production could rise strongly in the coming years as new projects add to supply. The market looks as if it is moving from big deficits back to surpluses in 2008 and 2009 due to mine growth. The Reuters Metal Production Database indicates that over 900,000 tons per year of zinc in concentrates capacity could be added between 2007 and 2009 from new mines and restarts (San Cristobal in Bolivia, Lennard Shelf in Australia, Cerro Lindo in Peru...etc). Consultants CRU Group said it expected global mine output to rise 11 percent in 2008 and 5 percent in 2009 after a 7.5 percent increase in 2007.
 
There are also reports that zinc exports from China are flooding the market as producers try to get rid of stock now, amid speculation that the government is going to withdraw a 5 percent export tax rebate on super-high-grade refined metal and impose an export tax of between 5 and 15 percent next year. China’s refined zinc exports increased 29.5 percent year on year to 257,196 tons in the first 10 months of this year. China is the world’s largest zinc producer, accounting for 30 percent of the world total last year. The Chinese zinc market is in surplus and metal exports from China are expected to rise and push the global market into oversupply.
 
Lead fell sharply on the news that the Magellan mine in Australia could resume exports by the middle of next year. The closure of the mine on environmental grounds in March this year was one of the key reasons that lead eventually rallied to an all time high of US$ 3,890 a ton.

In London, the Copper settlement price was US$ 6,825 a ton with a contango of US$ 15 on November 29, 2007.

Copper was under pressure from further increases in LME stockpiles and ongoing worries
over the demand outlook. While US growth is believed to have been heavily checked by the housing and credit market woes, concerns are now emerging that recent monetary tightening will weaken Chinese demand. China is the world’s largest copper consumer, followed by the US. China’s copper production increased 16.5 percent month on month in October to 358,000 tons, a rise of 42.5 percent over the same period last year. High levels of domestic production are expected to reduce the need for refined copper imports which declined by 3.8 percent in October compared to the previous month.
 
BHP Billiton, the Australian diversified mining company, has launched a takeover offer for Rio Tinto, but Rio has dismissed the proposal as significantly undervaluing the firm. A combination of the two companies would create a US$ 380 billion mining group that would dominate the copper, iron ore, coal and aluminium markets. BHP and Rio jointly own the Escondida copper mine in Chile.
 
Chinese state-owned China Metallurgical Group has won the tender to develop a large copper deposit in Afghanistan. The deposit, at Aynak, east of the capital Kabul, has estimated reserves of 690 million tons copper ore and proven reserves of 11.33 million tons of copper metal. The Chinese company plans to invest almost US$ 3.7 billion in the project and expects to produce 200,000 ton per year of copper metal, without specifying a timeline.

In London, the tin settlement price was US$ 16,900 per ton with a contango of US$ 55 on November 29, 2007. 
 
Yunnan Tin Company, the world’s largest producer, is running trials at a 20,000 tons a year smelter operated by its Indonesian unit, which is to supply crude tin for refining in Singapore. According to Reuters, YTC will produce 60,000 tons of refined tin this year, including about 7,000 tons from its joint-venture plant in Singapore and 53,000 tons from plants in Yunnan and Hunan provinces in China.
 
The global tin market recorded a market surplus of 6,500 tons in the first nine months of 2007 after allowing for reported deliveries from US stockpiles, the World Bureau of Metal Statistics said. Production fell in Indonesia, particularly after the government clampdown on illegal mining at the end of last year reduced the amount of tin available. However, output in Indonesia has since recovered some of the lost ground in the last quarter. Tin mine production was 241,000 tons, slightly below the January to September 2006 total.
 
Zhongyue Posco Qinhuangdao Tinplate, which has a tinplate production capacity of 250,000 tons per year, recently began operations, according to China Industrial Daily News. The new operation is the joint venture between Zhongshan Zhongyue Tinplate (66 percent) and Korea’s Posco (34 percent).

In London, the Gold AM fixing was US$     807.25 per ounce and spot Silver traded at US$ 14.38 per ounce on November 29, 2007. 

Gold has performed strongly, approaching the US$ 850 an ounce, a 28 year high as investors see gold as a safe haven asset, before retreating around US$ 800 towards month’s end. So far, the metal is up around 30 percent on the year.
 
Global jewellery consumption grew 6 percent in the third quarter, compared with the same period last year, well below the 25.5 percent increase registered in the second quarter, according to the World Gold Council. The slowdown was due to the increase in price volatility and the impact of the sharp rise in the price on Asian and Middle East markets which account for around two thirds of global jewellery.
 
The State Bank of India plans to launch a gold exchange-traded fund next year. India is the world’s biggest gold consumer and rising income levels due to the boom in its economy are expected to increase demand for gold.
 
Gold mines union in South Africa, the world’s largest producer of gold, is to stage a one-day nationwide strike on December 4 to protest on safety issues. The strike would mark the first total shutdown of all mines in the country in some 20 years.

In London, Nickel traded at US$ 27,755 per ton, equivalent to US$ 12.59 per pound on November 29, 2007. Cobalt min. 99.8% traded at US$ 34.75 per pound and Cobalt min. 99.3% at US$ 33.50 per pound on November 28, 2007.

PT International Nickel Indonesia (Inco) said it was still on track to produce 160-165 million pounds of nickel in matte this year despite a strike by workers since November 15. According to figures compiled by The Jakarta Post, in the third quarter of this year, Inco produced more than 75 percent of the company’s targeted annual production, leaving only 36.9 million pounds to be mined in the last three months of the year. In the July-September quarter alone, the company produced 42 million pounds of nickel in matte, an 11 percent increase from 37.8 million pounds during the same period last year.

Global consumption of nickel may gain 10 percent next year on rising demand from stainless steel mills in the US and China, the International Nickel Study Group said. High demand for the metal will erode the surplus to 100,000 tons in 2008 from 130,000 tons this year.
China ’s output of primary cobalt will fall by 21 percent to 13,300 tons this year as the country’s imports of cobalt concentrate decrease, according to Chinese analysts Beijing Antaike Development Co. China may only import a total of 120,000 tons of cobalt concentrates this year, down about 27 percent compared with last year. The analyst company also forecast that China’s cobalt consumption will be 12,500 tons this year, up 7.1 percent year on year and the country’s cobalt consumption could reach 16,000 tons by 2010.