Monthly Metal Review

Overview

The US/China trade dispute, although currently cushioned by a 90 day trade truce, remains the single biggest outstanding issue that is affecting the global economy and keeping a lid on metal prices. China’s December trade figures showed falling exports and imports, with exports off by 4.4 percent and imports down by 7.6 percent, compared with December 2017. Flash purchasing managers’ indices (PMI) for manufacturing in January showed steep declines in most areas with Japan and the EU on the brink economic contraction, while US economy remains robust. An-other sign of weakness was that China’s GDP fell to 6.4 percent for the fourth quarter 2018, from 6.5 percent in the third quarter – the low in GDP in the 2015 to 2016 economic slowdown was 6.7 percent. The metals intensive Chinese auto industry has also suffered at the hands of the trade tariffs, with auto sales down 6 percent to 22.7 million vehicles in 2018, according to the China Passenger Car Association. Other trade data is also ringing alarm bells, with South Korean exports, often seen as a bellwether for the health of the global economy, reportedly falling 14.6 percent in the first 20 days of January. Given how long the US-China trade dispute has run, although market sentiment does improve when there is positive noise about the trade negotiations, the market is unlikely to have too much confidence until a trade deal is signed and sealed. Equity markets ended 2018 on a weak footing, but dovish comments from Federal Reserve (Fed) chair Jerome Powel on January 4, did instil some confidence in markets as it now seems likely that US rate rises will not be automatic but only happen if the economy and global situation warrant it. According to CME data, there is now a 25 percent chance of a 25 basis point rise in interest rates this year, compared to more than a 50 percent chance in December. This has led to strong rebounds in equities that has seen the Dow jones Industrial Average rebound 13.5 percent since the December 24 low, while the Euro Stoxx 50 has rallied 7.7 percent from late-December lows. Even the monthly index of IHS Markit showed a slump in German manufacturing sector for the first time in four years. Various observers are con-sidering this as another indicator signalling an apparent slow-down in the European economy. The more dovish stance by the Fed has also halted the dollars’ stronger tone, with the dollar index recently quoted at 95.80, down from mid-December highs of 97.71 and has helped take the steam out of US treasuries with the 10-year treasury yield falling to around 2.72 percent and well down from the 2018 high of around 3.23%. The 2-year and 5-year treasury yields have also inverted, which is something that tends to precede US recessions. When nearby yields are higher than further forward yields it can dampen banks interest in providing long term finance, thereby choking off lending for capital projects . The International Monetary Fund (IMF) has also warned of lower global growth, forecasting growth of 3.5 percent in 2019, after 3.7% in 2018. The forecast for 2019 was 0.2% lower than the forecast it made in October last year. Given considerable uncertainty over the plight of the global economy, of which much of it is in political hands including US/China trade negotiations and Brexit talks, it is not surprising that gold is once again playing a role as a safe-haven. The fact that the yen and the dollar are also relatively strong, and major gov-ernment bond yields are lower, despite past monetary policy tightening, are also an indication of safe-haven demand. The weaker government bond yields are keeping the opportunity cost of gold low. The US ten-year treasury yield was trading around 2.72 percent and the two-year and five-year US treasury yields remain inverted, which tends to happen ahead of a US recession. The constitutional court of mineral rich Democratic Repub-lic of Congo declared Felix Tshisekedi as president after contro-versial election in December last year. The runner up Martin Fayu-lu had alleged fraud in the polling process. With this verdict, Congo is no longer being run by a member of the Kabila family although there were allegations of a backroom deal between outgoing president Joseph Kabila and the incumbent Tshisekedi. DRC supplies around 60% of global cobalt require-ment and is also a large producer of copper.

Daily Prices

January 2019

Copper
Date(Fix.) ($/MT)
Average 5932.02
31-01-2019 6148
30-01-2019 6077
29-01-2019 6007
28-01-2019 5996
25-01-2019 5901
24-01-2019 5885
23-01-2019 5920.5
22-01-2019 5926.5
21-01-2019 5951.5
18-01-2019 6022
17-01-2019 5933
16-01-2019 5911
15-01-2019 5882
14-01-2019 5861
11-01-2019 5926.5
10-01-2019 5908.5
09-01-2019 5964
08-01-2019 5904.5
07-01-2019 5889.5
04-01-2019 5840
03-01-2019 5811
02-01-2019 5839
Silver
Date(Fix.) ($/OZ)
Average 15.59
31-01-2019 16.075
30-01-2019 15.915
29-01-2019 15.855
28-01-2019 15.685
25-01-2019 15.375
24-01-2019 15.3
23-01-2019 15.385
22-01-2019 15.26
21-01-2019 15.26
18-01-2019 15.47
17-01-2019 15.575
16-01-2019 15.54
15-01-2019 15.6
14-01-2019 15.62
11-01-2019 15.68
10-01-2019 15.705
09-01-2019 15.62
08-01-2019 15.64
07-01-2019 15.75
04-01-2019 15.705
03-01-2019 15.535
02-01-2019 15.44
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average 1291.63
31-01-2019 1322.5
30-01-2019 1312.95
29-01-2019 1308.35
28-01-2019 1301
25-01-2019 1282.95
24-01-2019 1279.75
23-01-2019 1284.9
22-01-2019 1284.75
21-01-2019 1278.7
18-01-2019 1285.05
17-01-2019 1294
16-01-2019 1290.5
15-01-2019 1289.35
14-01-2019 1293.7
11-01-2019 1292.8
10-01-2019 1292.4
09-01-2019 1281.3
08-01-2019 1283.9
07-01-2019 1291.5
04-01-2019 1290.35
03-01-2019 1287.95
02-01-2019 1287.2
Date(Fix.) ($/OZ)
Average 1291.69
31-01-2019 1322.875
30-01-2019 1311.825
29-01-2019 1307.95
28-01-2019 1301.575
25-01-2019 1288.425
24-01-2019 1281.725
23-01-2019 1282.35
22-01-2019 1283.425
21-01-2019 1279.125
18-01-2019 1284.625
17-01-2019 1292.35
16-01-2019 1291.4
15-01-2019 1291.875
14-01-2019 1293.225
11-01-2019 1290.875
10-01-2019 1292.15
09-01-2019 1284.95
08-01-2019 1285.175
07-01-2019 1291.85
04-01-2019 1285.125
03-01-2019 1289.2
02-01-2019 1285.05
Date(Fix.) ($/OZ)
Average 1291.75
31-01-2019 1323.25
30-01-2019 1310.7
29-01-2019 1307.55
28-01-2019 1302.15
25-01-2019 1293.9
24-01-2019 1283.7
23-01-2019 1279.8
22-01-2019 1282.1
21-01-2019 1279.55
18-01-2019 1284.2
17-01-2019 1290.7
16-01-2019 1292.3
15-01-2019 1294.4
14-01-2019 1292.75
11-01-2019 1288.95
10-01-2019 1291.9
09-01-2019 1288.6
08-01-2019 1286.45
07-01-2019 1292.2
04-01-2019 1279.9
03-01-2019 1290.45
02-01-2019 1282.9
Lead
Date(Fix.) ($/MT)
Average 1994.16
31-01-2019 2090
30-01-2019 2066
29-01-2019 2075.5
28-01-2019 2107.5
25-01-2019 2085
24-01-2019 2026.5
23-01-2019 2011.5
22-01-2019 2002.5
21-01-2019 2003
18-01-2019 1972
17-01-2019 1948
16-01-2019 1952.5
15-01-2019 1954
14-01-2019 1962
11-01-2019 1961.5
10-01-2019 1960
09-01-2019 1965.5
08-01-2019 1940
07-01-2019 1934.5
04-01-2019 1975
03-01-2019 1943
02-01-2019 1936
Zinc
Date(Fix.) ($/MT)
Average 2559.18
31-01-2019 2719.5
30-01-2019 2673
29-01-2019 2680
28-01-2019 2699.5
25-01-2019 2635.5
24-01-2019 2606
23-01-2019 2607.5
22-01-2019 2602
21-01-2019 2569
18-01-2019 2577
17-01-2019 2502
16-01-2019 2490
15-01-2019 2472.5
14-01-2019 2467.5
11-01-2019 2470
10-01-2019 2476
09-01-2019 2532
08-01-2019 2541
07-01-2019 2535
04-01-2019 2505
03-01-2019 2480
02-01-2019 2462
Tin
Date(Fix.) ($/MT)
Average 20480.00
31-01-2019 20950
30-01-2019 20805
29-01-2019 20850
28-01-2019 20760
25-01-2019 20750
24-01-2019 21055
23-01-2019 20780
22-01-2019 20890
21-01-2019 20790
18-01-2019 20900
17-01-2019 20745
16-01-2019 20775
15-01-2019 20675
14-01-2019 20650
11-01-2019 20500
10-01-2019 20275
09-01-2019 20225
08-01-2019 19820
07-01-2019 19765
04-01-2019 19575
03-01-2019 19500
02-01-2019 19525
Nickel
Date(Fix.) ($/MT)
Average 11454.55
31-01-2019 12380
30-01-2019 12245
29-01-2019 11885
28-01-2019 11845
25-01-2019 11715
24-01-2019 11540
23-01-2019 11615
22-01-2019 11615
21-01-2019 11670
18-01-2019 11610
17-01-2019 11450
16-01-2019 11580
15-01-2019 11430
14-01-2019 11420
11-01-2019 11400
10-01-2019 11225
09-01-2019 11205
08-01-2019 11055
07-01-2019 11040
04-01-2019 10920
03-01-2019 10715
02-01-2019 10440
Cobalt
Date(Fix.) ($/MT)
Average 39340.91
31-01-2019 34000
30-01-2019 36000
29-01-2019 36000
28-01-2019 36000
25-01-2019 36000
24-01-2019 36000
23-01-2019 36000
22-01-2019 36000
21-01-2019 38000
18-01-2019 38000
17-01-2019 38000
16-01-2019 38000
15-01-2019 39000
14-01-2019 40000
11-01-2019 42000
10-01-2019 42000
09-01-2019 42000
08-01-2019 44000
07-01-2019 45000
04-01-2019 45000
03-01-2019 47000
02-01-2019 41500