The outlook for the global economy has declined rapidly in the past few weeks increasing expectations of a protracted and severe downturn. Consequently, worldwide governments have started to cut interest rates and to launch stimulus packages aimed at spurring economic recovery. But these will take time to feed through into the real economy. However, in late November, global equity markets rebounded strongly as investors applauded the US government’s rescue plan for Citigroup. In the US, Democratic Senator Barack Obama has been elected the first black president of the United States. The US automotive industry is in crisis and unemployment is on the rise. US sales of light vehicles have been declining all year and in October dropped by 31.9% year on year. In China, industrial production growth slowed dramatically in October to 8.2% year on year while during the first ten months, IP was up by 14.4%. Shrinking export markets mean that Chinese manufacturers are likely to face further declines in coming months. However, the stimulus package revealed earlier this month by the Chinese Government is aimed at boosting domestic demand to counteract the global slowdown. The government has announced spending of 4 trillion yuan ($586 billion) through to 2010 focusing on housing and infrastructure development, social welfare and tax reform. The Euro Zone entered recession in Q3 2008, propelled by the decline in German GDP and widespread weakness across member countries. German economic output fell by 0.5% in Q3 from Q2 and the Euro Zone declined by 0.2%. Consumer confidence has collapsed to its lowest level since January 1994 and retail sales are continuing on a downward trend as the threat of rising unemployment takes hold. However in the UK, Prime Minister Gordon Brown announced a stimulus package, to total more than £15 billion, which includes lowering the VAT from 17.5% to 15%. It also plans to impose a new 45% income-tax rate on incomes above £150,000. Furthermore, the UK's central bank cut Britain's base interest rate by a record 1.5 percentage points to 3 percent, while the ECB followed with a half a point cut to 3.25 percent. The US government rode to the rescue of Citigroup, entering an agreement to guarantee up to $306 billion in problematic assets and inject $20 billion in capital to restore confidence.

In London, the Lead cash settlement price dropped to US$ 1,080 per tonne while the Zinc cash settlement price has risen to US$ 1,185 per tonne on November 28, 2008.
Zinc is the worst performer, trading substantially below the marginal cost of $1,600-1,700 per tonne, thus enticing further cuts in production and projects deferrals. Global construction, the metal’s principle market, was one of the first sectors to get hit in the current downturn, and the global picture for new car sales is nothing less than appalling.
Lead, however, produced mainly as a zinc by-product, can only benefit as zinc output falls. In Australia, OZ Minerals Ltd announced a production cut of 20,000 tonnes at its Century mine in 2009 as well as the deferral of Dugald River zinc sulphide project. Dugald River was forecast to produce concentrates containing 200,000 tonnes per year of zinc, 30,000 tonnes per year of lead and 1.5 million ounces of silver over more than 16 years. In Mexico, Hochschild Mining Plc reported that it will delay development of its San Felipe zinc project, review capital spending and cut 150 office jobs.
In China, Zijin Mining Group revealed it would reduce zinc output by 30% at its 100,000 tonnes per year zinc smelter operated by its subsidiary Bayannur Zijin Nonferrous Co. Eventually, Nyrstar NV, the world’s largest zinc metal producer, warned it would reduce output at smelters in Belgium and the Netherlands by 28%. Zinc LME stocks rose to 193,100 tonnes, while LME lead stocks were of 41,600 tonnes.

In London, the Copper settlement price was US$ 3,581 a tonne with a contango of US$ 39 on November 28, 2008.
Copper prices collapsed further during November reflecting a stronger US dollar, rising inventories and growing concerns over the global economy. However, copper prices momentarily rallied as China introduced its new stimulus package. Chinese refined imports increased in October reflecting tight scrap availability and a more favourable Shanghai Exchange/LME arbitrage.
In the Democratic Republic of the Congo, TEAL Exploration said it would scale down output at its Lupoto copper mine project. In Tamil Nadu, India, Sterlite industries Ltd said that output at its 185,000 tonnes Tuticorin plant would be disrupted for a month after a failure at its main cooling tower. The resulting production loss is estimated at 23,000 tonnes.
In Belgium, Norddeutsche Affinerie reported it will close part of its copper plant in Olen. The unit to be closed has a capacity to produce 150,000 tonnes per year of copper products but production this year is only expected to reach 50,000 tonnes. In Chile, Codelco, the world’s biggest copper producer, has announced an expected 10% year-on-year reduction in its copper production at its Norte division. The reason given is that they plan to move more earth to minimize the risk of structural failures at the Chuquicamata open pit.
Codelco Norte made up of the Radomiro Tomic and Chuquicamata mines, is Codelco’s largest division and was expected to produce 830,000t of contained copper this year. LME stocks increased by 26% to 291,650 tonnes.

In London, the tin settlement price was US$ 12,310 per tonne with a backwardation of US$ 110 on November 28, 2008.
Supply-side constraints proved a strong support in October and early November,with the price falling just over 8% from mid-September. Although it slid with the other base metals on recessionary fears, the announced cutbacks by the two top tin producers, China and Indonesia, and violent unrest in the tin ore (cassiterite) producing eastern North Kivu Province in the DRC proved a decisive price floor.It is the nature of the supply-side risks that sets tin apart from other base metals.
In Indonesia, tin exports have collapsed, as small independent smelters on the Bangka-Belitung Islands have shut up shop on lower prices. In addition, Indonesia’s two biggest producers, PT Koba and PT Timah, have also reduced output. In China, the government has set new qualifications for tin exporters as part of efforts to tighten sales overseas. China’s top producer, Yunnan Tin, has also announced it will cut its output by 30% in Q4 2008.
The market is dominated by two producing countries, which are ensuring the tin market stays tight. LME tin stocks are at extremely low levels with 4530 tonnes, representing only three days of global consumption.

In London, the Gold AM fixing was US$ 813.50 per ounce and spot Silver traded at US$ 10.12 per ounce, on November 28, 2008.
In Alaska, NovaGold will suspend its Rock Creek mine operations owing to mechanical problems, difficulty meeting state environmental requirements, and predicted lower cash flow owing to weaker gold prices and a stronger US dollar. In Indonesia, OZ Minerals Ltd announced that the suspension of the Martabe gold-silver project targeting an average annual production of 200,000oz of gold and 2Moz of silver over at least nine years, beginning in 2010. In Chihuahua, Mexico, Minefinders Corp has poured the first gold-silver doré at its Dolores mine after months of delays caused by protests against the mine. The mine has a 15.5 year life and is forecast to produce about 128,000 ounces of gold and 3 million ounces of silver next year, the first full year of operation.
Global demand for gold rose by 18% year-on-year to an all-time high of 1,133.4 tonnes in the September quarter, reversing a weaker trend earlier this year, as lower prices encouraged buying from jewellers and as investors sought refuge from the financial crisis, the World Gold Council said. However, industrial demand for gold dropped 11% to 103.7 tonnes in the quarter on weaker buying from the electronics sector.
Gold supply was down 9.7% on year-earlier levels, largely driven by a significant reduction in central bank sales, the WGC said.

In London, Nickel slumped to US$ 9,705 per tonne, with a Contango of US$100, on November 28, 2008. Cobalt min. 99.8% traded at US$ 15.50 per pound and Cobalt min. 99.3% at US$ 13.00 per pound on November 28, 2008.
Many companies are still curtailing mining and smelting operations due to the significant increase in the cost of inputs, coupled with the steep decline in nickel and cobalt prices. Xstrata announced a major restructuring of Sudbury nickel, with early closure of older mines to allow commissioning of the new Nickel Rim South and Fraser Morgan mines. In Western Australia, OAO Norilsk Nickel, the world’s largest nickel miner, has suspended production at its Waterloo and Silver Swan mines.
 These mines together produced about 10,000 tonnes of contained nickel over the last 12 months. In Zimbabwe, African mining firm Mwana Africa plc has announced the shutdown of its nickel mines due to low prices and operating problems. Mwana Africa’s majority-owned unit, Bindura Nickel Corp, has decided to place the Trojan and Shangani mines on care-and-maintenance with immediate effect.
In the Democratic Republic of Congo, Katanga Mining Ltd has temporarily suspended production of cobalt concentrate at the Tilwezembe open pit and ore processing at the Kolwezi concentrator. Nickel LME stocks are at a nine-year high with 63,606 tonnes.