The metal markets were eager to get going when they came back from the May day holidays, which meant that trading had stayed closed in China, parts of continental Europe and on the London Metal Exchange during the long weekend.
Last week, the European Commission launched its spring 2014 forecasts, anticipating economic growth across the eurozone of 1.2% this year, but revising down its 2015 forecast by 0.1 percentage points to 1.7%. The respective UK forecasts were for 2.7% and 2.5%.
The Commission’s inflation predictions expect prices in 2014 to rise even more slowly, by 0.8% compared with 1% three months ago. The forecasts were released before the European Central Bank’s meeting on 8 May, after MRW went to press.
Siim Kallas, Commission vice-president, declared that “the recovery has now taken hold” across the EU.
The eurozone was also showing improvement on other indexes. The composite output index compiled by Markit Economics rose to 54.0 in April from 53.1 in March, reaching a three-year high. The PMI for manufacturing in the eurozone had risen to a final reading of 53.4 in April, from a preliminary figure of 53.3 and a March figure of 53.0.
There was good news from the US in the form of better than expected non-farm payroll data. This showed that the economy had created some 288,000 new jobs in April, comfortably exceeding forecasts of a rise of about 220,000. It was accompanied by a drop in unemployment to 6.3% in April from 6.7% in March.
This partially made up for the poor annualised US gross domestic product growth of 0.1% in the first quarter of this year, which analysts tended to dismiss as the result of the harsh winter.
The Institute for Supply Management’s purchasing managers’ index (PMI) for manufacturing in the US in April also helped by moving up to 54.9 from 53.7 in March, suggesting increased activity. It was the 11th month of expansion in a row.
But Chinese data was disappointing. The final figure for April for the manufacturing PMI compiled for the bank HSBC was 48.1, down from the preliminary figure of 48.3 and only just up from the 48.0 recorded in March. The official PMI for manufacturing, which favours large state-owned enterprises, rose to 50.4 in April, below the 50.5 being forecast by analysts.
On the London Metal Exchange, aluminium for delivery in three months dropped to around $1,778 per tonne earlier this week from $1,841 about a week earlier, probably under the influence of a technically inspired trader who spotted a sell signal of some kind. Stocks of aluminium in warehouses approved by the exchange edged up to 5,347,750 tonnes earlier this week from 5,347,575 about a week earlier.
Three month aluminium alloy eased to $1,895 per tonne earlier this week, from $1,940 about a week earlier. LME stocks stood at 54,440 tonnes earlier this week, unchanged from about a week earlier.
Three month copper eased back $6,666 per tonne earlier this week from $6,751 per tonne about a week earlier. LME stocks eased to 229,800 tonnes earlier this week from 237,000 tonnes about a week earlier.
Three month lead slipped to around $2,082 per tonne earlier this week, up from $2,151 about a week earlier. LME stocks rose to 193,875 tonnes earlier this week from 192,975 tonnes about a week earlier.
Three month nickel edged back to $18,230 per tonne earlier this week from $18,585 about a week earlier. LME stocks rose to 279,528 tonnes earlier this week, from 277,638 tonnes about a week earlier.
Three month tin stood at $23,900 per tonne earlier this week up from $23,700 about a week earlier. LME stocks rose to 9,540 tonnes earlier this week, from 8,845 about a week earlier.
Three month zinc eased to around $2,013 per tonne earlier this week, from $2,068 about a week earlier. LME stocks dipped to 767,800 tonnes earlier this week from 783,550 tonnes about a week earlier.
Steel billet’s three month position held at $410 per tonne earlier this week, unchanged from about a week earlier. LME stocks fell to 9,425 tonnes earlier this week from 11,960 tonnes about a week earlier.
Spot gold bullion rose to around $1,312.00 per ounce earlier this week, up from $1,290.50 about a week earlier. Spot silver climbed to $19.67 per ounce from $19.45, while spot platinum rose to $1,452 per ounce from $1,418.