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LME 6 July 2013

Metal prices were a little steadier this week as the panic subsided over the probable tapering of US quantitative easing. Matters were also helped by Chinese data avoiding any nasty surprises.

Gold, the quintessential investment metal, fell briefly below $1,200 per ounce last week, a dip of about $400 in three months, before recovering to the $1,260s.

The official and HSBC purchasing managers’ indices (PMIs) for manufacturing in China in June came in at 50.1 and 48.2 respectively, very close to expectations.  While these figures suggest that the Chinese economy is struggling, that is something that the markets have already had time to factor in.

In the US, the PMI for manufacturing compiled by the Institute for Supply Management rose to 50.9 in June from 49.0 in May.  This was the fifth expansion noted in the sector in the last six months, and it encouraged analysts to expect an increase in US factory orders of the order of 2%, when that figure is announced shortly.

But the main US data for which the market is waiting this week is the non-farm payroll number, due on Friday, which will show how many new permanent jobs the American economy has created in the course of June.

Earlier, the US Census Bureau reported that new orders for manufactured durable goods had risen by 3.6% in May, following a similar increase in April; the indicator was up three times in the last four months.  In a similar vein, the trade association Conference Board noted that US consumer confidence improved in June; the board’s index rose to 81.4 for last month from 74.3 in May. 

Japan’s quarterly Tankan survey, carried out by the Bank of Japan (the country’s central bank) showed sentiment improving to plus 4 from minus 8.  In particular, the survey noted a significant increase in plans for capital expenditure.

In the eurozone, the final PMI for manufacturing in June (compiled by Markit Economics) reached a 16-month high of 48.8.  The company’s analyst saw this as evidence of eurozone manufacturing stabilising, and suggested that manufacturing could start to grow in the third quarter of this year.

In detail

On the London Metal Exchange, copper for delivery in three months had recovered to around $6,919 per tonne earlier this week, from $6,676 a week earlier. Stocks of copper in warehouses approved by the exchange eased to 662,275 tonnes earlier this week from 678,225 tonnes a week earlier.

Three month aluminium had risen to around $1,794 per tonne earlier this week, from $1,776 a week earlier.  LME stocks moved up to 5,450,175 tonnes earlier this week, from 5,440,325 tonnes a week earlier.

Three month aluminium alloy was trading at around $1,820 per tonne earlier this week, up from $1,780 a week earlier. LME stocks remained at 69,040 tonnes earlier this week unchanged from a week earlier.

Three month nickel moved up to around $13,890 per tonne earlier this week, from $13,730 a week earlier.  LME stocks rose to 187,716 tonnes earlier this week, from 186,198 tonnes a week earlier.

Three month zinc was trading at around $1,866 per tonne earlier this week, up from $1,821 a week earlier.  LME stocks eased to 1,056,075 tonnes earlier this week, from 1,065,850 tonnes a week earlier.

Three month lead was quoted at around $2,071 per tonne earlier this week, up from $2,003 a week earlier.  LME stocks rose to 198,200 tonnes earlier this week, up from 195,875 tonnes a week earlier.

Three month tin was trading at around $19,850 per tonne earlier this week, up from $19,630 a week earlier.  LME stocks edged up to 14,290 tonnes earlier this week from 14,190 tonnes a week earlier.

Steel billet’s three month position fell to around $160 per tonne earlier this week, from $210 a week earlier.  LME stocks eased to 74,880 tonnes earlier this week, from 75,335 tonnes a week earlier.

Gold developed selling momentum which took the price below $1,200 per ounce, before a reaction set in.  Spot gold bullion was trading at around $1,264.10 per ounce earlier this week, still down from $1,286.00 a week earlier.  Spot silver stood unchanged from a week earlier at $19.79 per ounce.  Spot platinum recovered to $1,387 per ounce earlier this week, from $1,357 a week earlier.

 

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