Weakness in the US dollar this year has fuelled broad-based investment in commodities, helping send oil, gold, copper and tin to record highs. Commodity markets made a sluggish start to the second quarter. Supply concerns and evidence of rising demand from China drove oil to a record of close to US$ 120 a barrel on April 22. Gold appears to have lost some of its momentum in recent weeks, sinking below the US$ 900 level from a recovery in the dollar. Copper prices remain supported at elevated levels by dwindling stockpiles ands fears of a supply shortage linked to a mining strike in South America. Tin touched a lifetime high of $ 24,000 a ton on concerns about supply tightness after Indonesia formalised an export limit of 100,000 tons for this year. Congestion at major coal and iron ore ports in Brazil and Australia has pushed up freight rates for commodities such as iron ore, coal, copper concentrate and alumina, while Panama Canal delays have contributed to the shortage of ships at the key loading ports in the Mexican Gulf, affecting grain, bauxite and fertilizers, according to ship brokers. New US home sales plunged to a 17-year low in March. Single family- home sales slumped 8.5 percent in March to a 526,000 annual rate, the lowest since October 1991, 36.6 percent below the same period the previous year. The US Conference Board’s index of consumer sentiment fell to 62.3 in April, the lowest since March 2003, from a upwardly revised 65.9 in March. The euro rose on April 22 above $ 1.60 for the first time since its launch almost a decade ago before dropping back, after a survey showed that German corporate sentiment deteriorated more than expected. The Ifo German business climate index fell from 104.80 in March to 102.40 in April, its weakest level since January 2006 and well below forecasts for a reading of 104.3 China’s economy grew by 10.6 percent in the first quarter, compared with the first three months of 2007. Growth in the first quarter was down slightly compared with the final three months of 2007, when it stood at 11.7 percent, mainly due to the slowing pace of export growth and the impact of severe weather.

In London, the Lead cash settlement price was US$ 2,680.50 per ton while the Zinc cash settlement price was US$ 2,195.50 per ton on April 30, 2008. India’s Hindustan Zinc Ltd. announced expansion project that will take its total zinc and lead metal capacity to 1.065 million tons per year by mid-2010, making it the world’s largest integrated zinc-lead producer. Zinc and lead metal production will increase by 210,000 and 100,000 tons per year respectively through two smelter projects and a captive power plant at Rajpura Dariba in Rajasthan state in India. HZL will expand its ore production capacity to support the increase in smelting capacity. The company recently upgraded its reserves and resources by 14.1 percent to 232.3 million tons, containing around 27.5 million tons of zinc and lead metal. Australian miner Zinifex will invest another US$ 35 million in its 700,000 tons per year Rosebery lead and zinc mine, located on the west coast of Tasmania. This decision is primarily a result of an exploration programme launched in 2006, which extended the mine life to 2020. Total resource estimates now stand at 11.7 million tons. The money will be primarily spent on installing a new ventilation system as well as the commissioning of a surface renewal feasibility study to evaluate the possibility of a new milling and concentrating facility.

In London, the Copper settlement price was US$ 8,655 a ton with a backwardation of US$ 155 on April 30, 2008. Copper prices have surged 30 percent so far this year to a fresh record of US$ 8,800 a ton, supported by a record low in the US dollar and a strike by subcontractors at Chile’s Codelco. Codelco, the world’s largest copper producer with annual output of 1.7 million tons a year, generates about 10 percent of global copper supply. While supply remains tight, with stockpiles more than 40 percent below the levels they stood at the beginning of the year, analysts said the demand picture is uncertain given worries over the economy. Demand from the US is expected to remain depressed by a fall-off in housebuilding activity there and analysts also fear Chinese demand could be affected by high prices. Southern Copper, a Mexico-based company with its main mines and smelters in Mexico and Peru, will increase its output this year by 6.7 percent to 640,000 tons compared with last year. In Zambia, Equinox Minerals’ Lumwana copper project should begin production in July 2008. The project is expected to produce 169,000 tons per year of contained copper in concentrate and is Zambia’s single largest investment at a total cost of US$ 584 million.

In London, the tin settlement price was US$ 23,600 per ton with a backwardation of US$ 145 on April 30, 2008. Output from major tin producers Indonesia and China have been falling over recent months, leading to a slump in stockpiles and sending the metal to a series of record highs. Global inventories fell to levels not seen in 2 years and half. Prices have risen by about one third since the end of last year. China remained a net importer of refined tin for a third consecutive month in March according to official customs statistics. Exports in March amounted to only 58 tons, while imports were 1,195 tons. Tin concentrate imports in March amounted to 886 tons, bringing the first quarter total up to 2,193 tons, 67 percent higher than in the same period of 2007. China’s net tin exports are forecast to fall 43 percent to 6,000 tons this year, due to rising domestic consumption, according to Antaike. The state-run metals information provider is projecting a 10.4 percent increase in Chinese refined tin consumption to 146,000 tons in 2008.

In London, the Gold AM fixing was US$ 867,75 per ounce and spot Silver traded at US$ 16.47 per ounce April 30, 2008. The recent strength in the US dollar combined with oil latest decline have sent gold prices lower prompting heavy selling by bullion investors. A firmer dollar makes gold costlier for holders of other currencies and often lowers bullion demand. Australia-based Oxiana Ltd. plans to spend US$ 310 million this year to build a gold and silver plant in North Sumatra. The project, called the Martabe project, will begin construction in August. The plant is expected to start production at the end of 2009, with a total output of 200,000 ounces of gold and 2 million tons of silver per annum. The area, with a size of 2,563 square kilometres, has resources of 6 million ounces gold and 60 million ounces of silver. Newmont Mining, the world’s second largest gold producer posted a sharp rise in profit and still forecast gold sales between 5.1 million and 5.4 million ounces for the year.

In London, Nickel traded at US$ 28.905 per ton, equivalent to US$ 13.11 per pound on April 30, 2008. Cobalt min. 99.8% traded at US$ 48.50 per pound and Cobalt min. 99.3% at US$ 46.65 per pound on April 30, 2008. World primary nickel consumption is expected to reach a record high in 2008 due to a recovery in nickel-containing stainless steel production around the world, particularly in China, the International Nickel Study Group said. World primary nickel consumption is estimated to grow by 13 percent in 2008 to reach 1.47 million tons, up from 1.33 million tons in 2007. Primary nickel consumption declined in 2007 on the year from 1.4 million tons in 2006 Low-grade and high-grade cobalt prices continued to trade at lower levels after the sharp falls seen since the start of April as a flurry of profit-taking added to weakening market sentiment. High-grade prices edged down to US$ 48-50 per pound as consumers preferred to focus on the lower grades which were reportedly traded at around US$ 46.50-47 per pound. China-owned China Railway Group and Sinohydro Corp will form a joint venture with investors in the Democratic Republic of Congo to mine for copper and cobalt, and build infrastructure in the African state. The preliminary proven reserves are around 6.8 million tons with copper grade of 3.3 percent and for cobalt, around 420,000 tons with cobalt grade of 0.24 percent.