Monthly Metal Review

Overview (September 2018)

The main focus entrapping global business and investment senti-ment is the continuing US trade dispute with China, the latest escalation being the 10% tariff on an extra $200 billion of Chinese imports, which may rise to 25% in the New Year, should China retaliate. China’s response so far was for tariffs on $60 billion worth of US goods and a statement that it would not join trade talks unless the US stops threatening to increase tariffs. This sug-gests the trade dispute will grind on, although President Donald Trump, while wanting to look tough in the run up to the mid-term elections, may try to pull a deal out of the bag just before the elec-tion. Away from the trade disputes, but not disconnected, the situation in the financial markets is quite diverse, with the US econ-omy appearing to be racing forward as equity markets set fresh records, the Dow Jones Industrial Average is up 8% year-to-date, and consumer confidence and manufacturing activity are at multi-year highs. US GDP was running at an annualized rate of 4.2% in the second quarter, which is the fastest pace for four years. Economic growth in emerging markets is near a seven-month low and confidence in Europe is in the doldrums, with Italy’s finances once again a threat to EU financial stability and all the uncertainty surrounding Brexit. US treasury markets are also relatively buoyant despite the rising yields and the divergence between US interest rates and those in the other major economies. US ten-year treasury yields were recently as highs as 3.1%, while German ten-year bunds yield 0.53%. A diversified group of emerging market economies have started to suffer country-specific crises, whether political or finan-cial, and whether triggered by higher US interest rates, poor gov-ernance or the threat of sanctions and trade tariffs. The countries currently in focus are Turkey, Argentina, Iran, South Africa, Russia, Brazil and even Italy, but while these countries’ issues may have started in isolation, they are now being seen as more connected, which raises the risk of contagion and an emerging market crisis. Higher oil prices, with Brent crude prices reaching $82 per barrel, brought about by the US stance on sanctions against Iran and Opec’s reluctance to raise output in a hurry, are also headwinds for non-oil producing economies. Whether the diverging paths within the global economy prompt central bankers and politicians to change tack or run the risk of causing another global financial crisis, remains to be seen. Ironically, even President Donald Trump sees the rising US interest rate policy and stronger dollar as undermining America’s competitive advantage. With metals prices having already retreated since June, but hav-ing spent recent weeks building bases, and with the physical market still showing strength and the metals’ fundamentals generally tighten-ing, as seen by rising premiums, stock falls and the emergence of some backwardations in the spreads – it may be that the metals are now looking for an excuse to rally. A weaker dollar may well be the trigger for that. With the funds’ short positions at an extreme, any sustained price rally would likely prompt short-covering and lead to some fast upside corrections. Any progress on trade talks, or further stimulus measures by China, which are widely expected, could lead to a similar result. The headline German Ifo business climate climbed to 103.7 in September, marginally weaker than August’s 103.8 but surpassing market expectations. Germany’s dependence on exports and its sig-nificant trade surplus expose the country to global trade frictions. Souring sentiment in Europe’s largest economy supports ECB Presi-dent Mario Draghi’s claim that protectionism, emerging-market vola-tility and financial turmoil risk weighing down growth. Still, the Bundesbank said the German economy can cope thanks to strong domestic demand. U.S. Jobs and wages moved higher in August, a government report said. But the largely positive Labor Department report hinted that trade-war tariffs could be starting to take a toll on manufacturing jobs. Gold prices fell modestly following a U.S. jobs report that slightly topped market expectations. August non-farm payrolls rose by 201,000. The overall unemployment rate was 3.9 percent from 3.8 in July. Still, U.S. wages, which had been lagging, ticked up more than expected in August whilst hiring also rose. South Africa slipped into recession in the second quarter, the first in almost a decade. Moody’s rating service said 2018 economic growth would be no greater than 1 percent. But it said there is little chance the debt-burdened nation’s credit rating would be downgrad-ed at an October review meeting, given Moody’s stable outlook on the nation. Still, Moody’s warned that a commitment to fiscal con-solidation would be vital to maintaining its rating.

Daily Prices

October 2018

Copper
Date(Fix.) ($/MT)
Average 6239.46
16-10-2018 6202
15-10-2018 6296
12-10-2018 6325
11-10-2018 6155
10-10-2018 6294
09-10-2018 6219
08-10-2018 6169
05-10-2018 6182.5
04-10-2018 6310
03-10-2018 6275
02-10-2018 6274
01-10-2018 6172
Silver
Date(Fix.) ($/OZ)
Average 14.56
16-10-2018 14.755
15-10-2018 14.74
12-10-2018 14.6
11-10-2018 14.4
10-10-2018 14.375
09-10-2018 14.325
08-10-2018 14.465
05-10-2018 14.635
04-10-2018 14.63
03-10-2018 14.735
02-10-2018 14.505
01-10-2018 14.55
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average 1202.69
16-10-2018 1228.85
15-10-2018 1233
12-10-2018 1218.75
11-10-2018 1201.1
10-10-2018 1186.4
09-10-2018 1187.4
08-10-2018 1194.8
05-10-2018 1201.1
04-10-2018 1199.45
03-10-2018 1203.5
02-10-2018 1192.65
01-10-2018 1185.3
Date(Fix.) ($/OZ)
Average 1203.41
16-10-2018 1229.775
15-10-2018 1231.475
12-10-2018 1219.25
11-10-2018 1203.325
10-10-2018 1187.5
09-10-2018 1186.475
08-10-2018 1190.875
05-10-2018 1202.45
04-10-2018 1201.45
03-10-2018 1202.35
02-10-2018 1198.675
01-10-2018 1187.325
Date(Fix.) ($/OZ)
Average 1204.13
16-10-2018 1230.7
15-10-2018 1229.95
12-10-2018 1219.75
11-10-2018 1205.55
10-10-2018 1188.6
09-10-2018 1185.55
08-10-2018 1186.95
05-10-2018 1203.8
04-10-2018 1203.45
03-10-2018 1201.2
02-10-2018 1204.7
01-10-2018 1189.35
Lead
Date(Fix.) ($/MT)
Average 1997.29
16-10-2018 2079
15-10-2018 2091
12-10-2018 2037
11-10-2018 1909
10-10-2018 1915
09-10-2018 1934
08-10-2018 1981
05-10-2018 1971
04-10-2018 2020
03-10-2018 2020.5
02-10-2018 2001
01-10-2018 2009
Zinc
Date(Fix.) ($/MT)
Average 2660.83
16-10-2018 2630
15-10-2018 2662
12-10-2018 2677
11-10-2018 2638
10-10-2018 2697.5
09-10-2018 2691.5
08-10-2018 2649
05-10-2018 2645
04-10-2018 2696
03-10-2018 2632
02-10-2018 2693
01-10-2018 2619
Tin
Date(Fix.) ($/MT)
Average 19001.25
16-10-2018 19175
15-10-2018 19100
12-10-2018 19050
11-10-2018 18975
10-10-2018 19010
09-10-2018 18975
08-10-2018 18985
05-10-2018 18950
04-10-2018 19000
03-10-2018 18920
02-10-2018 18925
01-10-2018 18950
Nickel
Date(Fix.) ($/MT)
Average 12530.42
16-10-2018 12450
15-10-2018 12650
12-10-2018 12710
11-10-2018 12420
10-10-2018 12775
09-10-2018 12660
08-10-2018 12395
05-10-2018 12400
04-10-2018 12770
03-10-2018 12390
02-10-2018 12420
01-10-2018 12325
Cobalt
Date(Fix.) ($/MT)
Average 58292.50
16-10-2018 62500
15-10-2018 62500
12-10-2018 62500
11-10-2018 58010
10-10-2018 58000
09-10-2018 57000
08-10-2018 55500
05-10-2018 57000
04-10-2018 55500
03-10-2018 55000
02-10-2018 58000
01-10-2018 58000