Metal prices held more or less steady in the New Year, as traders decided that the modest taper decided on by the Federal Reserve (US central bank) was not the end of the world, and as other data pointed to modest and perhaps faltering growth this year, but growth nevertheless.
The tapering was, in any case, modest. The Fed is buying $75 (£46) billion of bonds every month instead of $85 (£52) billion. Coincidentally, there were some reports of the Chinese authorities helping certain local banks overcome a cash shortage.
US manufacturing was expected to grow slightly less fast, as the purchasing managers’ index for the sector compiled by the Institute for Supply Management eased to 57.0% in December from 57.3% in November. While this may be down, it is comfortably above 50%. The associated new manufacturing orders index was up by 0.6% at 64.2%, which was its best showing since 65.1% in April 2010. The institute’s non-manufacturing PMI slipped to 53.0% in December, deceiving expectations of 54.6%, but again it was above 50%.
US gross domestic product rose at an annual rate of 4.1% between the second and third quarters of last year, according to the Bureau of Economic Analysis, up from 2.5% between the first and second quarters.
Chinese indices were also lower, but still just about pointing to growth. The official PMI for manufacturing, published by the National Bureau of Statistics, was 51.0% in December, down from 51.4% in November. The official non-manufacturing PMI stood at 54.6% in December, compared with 56.0 in November.
The unofficial indicators, compiled for the bank HSBC by Markit Economics, showed the PMI for manufacturing in China to be 50.5% in December, down from 50.8% in November. The corresponding composite output index was trimmed to 51.2% in December from 52.3% in November.
In contrast, the eurozone was looking its best for over two and a half years. The PMI for the zone’s manufacturing, compiled by Markit, was up to 52.7% in December, up from 51.6% in November. The Netherlands, Germany, Ireland, Italy, and Austria all continued to see manufacturing expanding, and even Spain had moved into positive territory before the end of last year. Greece was at a 52-month high, just below 50% at 49.6%.
On the London Metal Exchange, aluminium for delivery in three months slipped to around $1,762 per tonne earlier this week, from $1,791 before Christmas. Stocks of aluminium in warehouses approved by the exchange rose to 5,455,400 tonnes earlier this week from 5,392,350 before the holiday.
Three month aluminium alloy held at $1,810 per tonne earlier this week, down from $1,840 in mid-December. LME stocks edged down to 56,440 tonnes earlier this week, from 56,860 during this period.
Three month copper eased back to $7,291 per tonne earlier this week, from $7,310 before the holiday. LME stocks eased to 356,125 tonnes earlier this week from 389,175 tonnes in mid-December.
Three month lead edged down to around $2,163 per tonne earlier this week, from $2,172 during this period, while LME stocks dipped to 215,000 from 221,175.
Three month nickel was trading at around $13,640 per tonne earlier this week, down from $14,140 before Christmas. LME stocks rose to 260,862 tonnes earlier this week, from 255,354 tonnes before the holiday.
Three month tin eased to $21,410 per tonne earlier this week, from $22,850 in mid-December. LME stocks dipped to 9,655 tonnes earlier this week, from 10,315 before Christmas.
Three month zinc rose to around $2,017 per tonne earlier this week, up from $1,991 before the holiday. LME stocks also rose, to 922,850 tonnes earlier this week from 913,925 tonnes before Christmas.
Steel billet’s three month position rose to $300 per tonne earlier this week, from $260 in mid-December. LME stocks slipped to 16,510 tonnes from 17,290 tonnes during this time.
Precious metals were little changed. Spot gold bullion was trading at around $1,240.10 per ounce earlier this week, against $1,239.20 before the holiday. Spot silver was at $20.19 per ounce against $20.02, while spot platinum was firmer at $1,416 per ounce against $1,365.