No shortage of market influences

No shortage of market influences

With no shortage of market influences, somehow prices have remained reasonably steady for yet another week. With details of the Carbon Tax being released over the weekend, the Australian dollar lost ground amid uncertainty concerning jobs and manufacturing in the country. Meanwhile in Europe, the economy seems to be balancing on a knife’s edge as the following article explains.

Scrap Traders on the international market continue to trade cautiously. Historically, when LME market prices are high, traders reduce their prices as a percentage of LME as they prefer to wait for a good steady average price over a number of trading days in which to base the purchases on.

Please see the following article for your perusal;

LME Metals Slip Amid Growth, Debt Contagion Fears By Francesca Freeman Of DOW JONES NEWSWIRES

Base metals are trading lower on the London Metal Exchange Monday as concerns over the global economic recovery weigh on sentiment, although short-term losses in flagship copper look to be kept in check by a mix of bullish fundamental news, said analysts.

The hangover from Friday’s weaker-than-expected June nonfarm payrolls—which came in well below estimates at 18,000–continued to be seen across a number of markets Monday, as investors sought to pare back their exposure to perceived risky assets, such as stocks and commodities. In addition, data over the weekend showed Chinese inflation hit a three-year-high of 6.4% last month, sparking concern that further economic tightening measures may be required to tame escalating prices. As the world’s biggest consumer of metals, China’s monetary policy is closely eyed as an indicator for future metals demand.

Also denting confidence was renewed fear over debt contagion in the euro zone, after Italy’s stock-market regulator, Consob, introduced temporary measures over the weekend aimed at curbing speculative attacks on the Milan stock market, after a wave of selling hit Italian bank stocks Friday. “Euro-zone debt problems continue to dominate the headlines, putting downward pressure on the euro. Therefore, metal prices are struggling,” Standard Bank analyst Walter de Wet said in a note. Metals, which are priced in US dollars, tend to suffer when the euro-dollar falls, as they appear more expensive to foreign currency buyers.

But on the fundamental side, things weren’t looking so gloomy for the copper market Monday, said Fairfax analyst Angus Burt. Chinese copper imports increased 280,000 tons in June, while copper stockpiles on the Shanghai Futures Exchange continued to fall last week. Additionally, Monday saw the commencement of a 24-hour strike at the world’s largest copper producer, Corporacion Nacional del Cobre. Still, Credit Suisse downgraded its forecasts for a range of base metals Monday, citing weaker-than-anticipated fundamental prospects going forward.

While the copper market should be in a “sizeable” 460,000-ton deficit in 2011, larger-than-expected hidden stocks in Chinese bonded warehouses have been able to support this shortfall, the bank said. “It is now apparent that the globe will not run out of copper this year,” Credit Suisse said.

Kind regards,

Brett Russell
Assistant Manager
Total Metal Recyclers Pty Ltd
9 Morgan Street, Rockingham, WA 6169
Tel +61 8 9528 7879 Mob +0417 915 955

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