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As has been well reported this week, and as we have noted in our market commentary in the past few weeks, the economy in the United States and has found itself in troubled times. LME markets have also taken a battering with Copper down USD790, Aluminium down USD200, Lead down USD280, and Nickel down USD2780 since only the beginning of the month.

 

Fortunately for us in Australia, our dollar has also fallen from highs of over 1.10 at the beginning of the month, to a current trading level around 1.015. This fall in our dollar has reduced the impact of pricing for the time being.

 

Please see the following article for your perusal;

 

LME Metals Mostly Lower As Risk Assets Sold By Rhiannon Hoyle Of DOW JONES NEWSWIRES

 

Base metal prices are mostly lower on the London Metal Exchange Monday as European stock markets and the euro sink firmly into the red on heightened risk aversion and Standard & Poor’s downgrade of U.S. debt.

 

The industrial commodities have been weighed by poor risk sentiment, with investors moving into perceived safe haven assets after the world’s largest economy’s prized AAA rating was cut. Some analysts also said that recent prices for a number of the metals have been hard to justify, and that it is therefore unsurprising prices are correcting. “It’s time to ask ourselves whether copper’s return to above it pre-crash high was based on smoke and mirrors,” said Citi analyst Heath Jansen. A week ago, copper traded as high as $9,905/ton, less than 3% off its all-time high.

 

However, market participants note that, with the exception of tin, many of the metals have outperformed other risk assets, declining only moderately in comparison. Morgan Stanley said that, while the markets remain vulnerable amid the global growth scare, those with tighter fundamental outlooks, such as copper, may hold up relatively well.

 


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