Monthly Metal Review

Lead and Zinc (May 2019)

Global lead mine production of 1.259 million tonnes was up 6.9 percent in the first three months of 2019, compared with the same period in 2018, according to ILZSG. The main production increase came from China, where output rose 11 percent to 607,000 tonnes, with incremental increases seen in India (+12,000 tonnes) and the US (6,000 tonnes). Output fell 12,000 tonnes in Australia. Refined production was up by 9.8% over the same period, while demand increased 8.9%. China accounted for the bulk of the increase in both production and demand seeing gains of 21 percent and 25 percent respectively. While prices are weak, at $1,825 per tonne prices are in the bottom quartile of the $1,551-2,685 range that has held since 2012, exchange stocks are low. LME stocks stand at around 72,000 tonnes, compared with around 103,000 tonnes at the end of 2018. That said, stocks registered at Shanghai Futures Exchange warehouses have been climbing this year –they stand at 32,486 tonnes, up from 15,826 tonnes at the end of 2018, this is not surprising given the 21% rise in Chinese refined lead production in the first quarter, an increase of 245,000 tonnes over the same period in 2018. In line with most base metals prices, lead prices have re-mained under pressure due to a combination of the fallout from US/China trade wars that have escalated since no deal was reached in May and as auto sales globally are weak, especially in China. The auto industry could suffer further if the US imposes tariffs of imports from Mexico as the US imports a lot of cars from Mexico. Refined zinc metal production dropped 3 percent to 3.164 million tonnes in the first quarter, a drop of 97,000 tonnes from the same period in 2018. The delay reaction refined production has had to the pick-up in mine production, this despite a rise in treatment charges (TCs), helps explain why there is such a large backwardation in the LME forward curve, with the cash-to three month spread trading out to a backwardation of $161 per tonne in late May, the highest in 22 years, according to Reuters. The backwardation has attracted metal into LME warehouses, indeed stocks have doubled since reaching a low of 55,325 tonnes in late-March, but the stock rise has not put an end to the back-wardation. This suggests that the more speculative end of the market got short in anticipation of a supply response, but have been caught off-guard by the slow processing of the extra con-centrate into refined metal. Environmental inspections in China and the earlier closure of the Zhuzhou Smelter, ahead of the ramp-up of new smelter capacity, has hampered efforts to raise smelter output in China. The ILZSG’s forecast for 2019, is for the zinc market to be in a 121,000 tonne supply deficit.

Daily Prices

June 2019

Copper
Date(Fix.) ($/MT)
Average 5814.06
13-06-2019 5797.5
12-06-2019 5828.5
11-06-2019 5905
10-06-2019 5788
07-06-2019 5770
06-06-2019 5805
05-06-2019 5832.5
04-06-2019 5804
03-06-2019 5796
Silver
Date(Fix.) ($/OZ)
Average 14.80
13-06-2019 14.795
12-06-2019 14.79
11-06-2019 14.695
10-06-2019 14.745
07-06-2019 14.91
06-06-2019 14.955
05-06-2019 14.84
04-06-2019 14.72
03-06-2019 14.705
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average 1329.99
13-06-2019 1335.8
12-06-2019 1336.65
11-06-2019 1322.65
10-06-2019 1328.6
07-06-2019 1334.3
06-06-2019 1336.65
05-06-2019 1337.75
04-06-2019 1323.6
03-06-2019 1313.95
Date(Fix.) ($/OZ)
Average 1330.20
13-06-2019 1335.85
12-06-2019 1334.5
11-06-2019 1323.475
10-06-2019 1328.6
07-06-2019 1337.475
06-06-2019 1336.075
05-06-2019 1336.4
04-06-2019 1323.925
03-06-2019 1315.525
Date(Fix.) ($/OZ)
Average 1330.41
13-06-2019 1335.9
12-06-2019 1332.35
11-06-2019 1324.3
10-06-2019 1328.6
07-06-2019 1340.65
06-06-2019 1335.5
05-06-2019 1335.05
04-06-2019 1324.25
03-06-2019 1317.1
Lead
Date(Fix.) ($/MT)
Average 1882.94
13-06-2019 1903
12-06-2019 1918
11-06-2019 1949
10-06-2019 1888
07-06-2019 1837
06-06-2019 1945
05-06-2019 1881.5
04-06-2019 1834
03-06-2019 1791
Zinc
Date(Fix.) ($/MT)
Average 2627.78
13-06-2019 2604
12-06-2019 2640.5
11-06-2019 2670
10-06-2019 2620.5
07-06-2019 2621
06-06-2019 2637
05-06-2019 2605.5
04-06-2019 2636
03-06-2019 2615.5
Tin
Date(Fix.) ($/MT)
Average 19285.00
13-06-2019 19500
12-06-2019 19325
11-06-2019 19360
10-06-2019 19280
07-06-2019 19630
06-06-2019 19110
05-06-2019 19110
04-06-2019 19250
03-06-2019 19000
Nickel
Date(Fix.) ($/MT)
Average 11756.11
13-06-2019 11920
12-06-2019 11745
11-06-2019 11825
10-06-2019 11600
07-06-2019 11580
06-06-2019 11710
05-06-2019 11765
04-06-2019 11800
03-06-2019 11860
Cobalt
Date(Fix.) ($/MT)
Average 30000.00
13-06-2019 28000
12-06-2019 28000
11-06-2019 28000
10-06-2019 28000
07-06-2019 28000
06-06-2019 32500
05-06-2019 32500
04-06-2019 32500
03-06-2019 32500