The non-ferrous metals market received a significant boost after the referendum vote to leave the EU in June 2016 as the weak pound boosted exports. Sterling fell by 14.97% against the dollar from January 2016 to April 2017.
After the General Election date was announced, prices started to fall but it is too soon to draw longer term conclusions.
The Brexit vote resulted in various metal grades seeing a double-digit percentage change in price at the top end of their ranges in some regions around the country.
Although prices have risen consistently, merchants have been at the mercy of volatile trading conditions, experiencing strong gains of £100-£200 per tonne one week and then losing such gains the following week depending on the movement of sterling.
Braziery copper, currently standing at £3,350 per tonne, has risen £1,350 since the start of 2016, an increase of 67.5%. Copper dry bright wire also made a strong 49.1% gain during the same period, an increase of £1,400 per tonne to £4,250 per tonne.
Gunmetal scrap went up by 65%, increasing by £1,300 to £3,300 per tonne while phosphor bronze metal went up by 58.9%, a rise of £1,260 per tonne to £3,400 per tonne.
Non-ferrous grades of lead and aluminium also made substantial gains during the past 14-month period.
Lead scrap was up £660 per tonne to £1,400 per tonne (89.2%). Aluminium wheels rose by 57.1% across the same period, a £400 per tonne increase to £1,100 per tonne.
Most non-ferrous metal grades dipped at the start of 2017 but have since recovered.
Meanwhile, high-value metals experienced a buoyant market in 2016, with prices rising sharply in response to the Brexit vote and Donald Trump’s unexpected presidency win in the US.
The price of gold jumped after the referendum. The metal is traditionally a safe haven in times of global economic and political uncertainty, and a sharp fall in the value of sterling at the same time also boosted prices and sales.
Nine-carat gold rose by more than 40% between January 2016 and April 2017, up by £3.40 per gramme.
Platinum also made strong gains in the same period, up by £7.30 per gramme (38.6%), as did silver which increased £0.47 per gramme (56.7%), benefitting from momentum created by the gold increase.
Palladium soared £8.80 per gramme (73.9%), but without the volatility and price corrections experienced by the other precious metals. It benefited from fears of supply shortages to hold on to the gains made.
- This article was prepared as the pound rose to a six-month high against the dollar following the General Election news, bringing down gold from its five-month high.
This change in the exchange rate means that traders are now split between those who made a ‘knee-jerk’ reaction and adjusted their prices straight away, which could require a later correction, and those who adopted a ‘wait and see’ approach by holding back and taking stock of the market.
High-value metal price rises
- Palladium - 73.9%
- Silver - 56.7%
- 9ct gold - 40.5%
- Platinum - 38.6%