Another tumultuous week on commodities markets with the extreme volatility of world stock markets and locally the sad news that Bluescope will close half of its steel production in the next 2 months (and reduce its demand for scrap). We expect there will be a flow on affect to the local ferrous scrap market as local demand dries up.
For non-ferrous, notwithstanding the volatility the commodity prices have remained relatively steady with most items unchanged from last week. Fears of a slowdown in United States and Government defaults in Europe still hover on investors minds.
Please find the following article for your perusal;
METALS-Copper edges down on growth concerns By Harpreet Bhal and Silvia Antonioli
Copper edged down on Monday, on growing concerns about a slowdown in the United States and a debt crisis in Europe, which raised fears about the outlook for global growth and demand for metals, but upbeat Chinese import data and a softer dollar were limiting losses. Benchmark copper traded at $8,766 by 1443 GMT, down slightly from Friday’s close of $8,825 a tonne. “The market is still very nervous,” said Daniel Briesemann, an analyst at Commerzbank. “The market players are very uncertain….everything still seems to be on a shaky footing. Many are waiting on the sidelines and don’t want to get in now.”
Investors are growing increasingly uneasy about global recovery prospects, with disappointing data from the United States and a debt crisis in the euro zone prompting investment flows into safe haven assets such as gold, which rallied to a new record high near $1,900 an ounce. Copper posted its third consecutive weekly loss last week, and is down more than 10 percent this month.
“It’s all a bit quiet at the moment. We saw some Chinese buying in recent weeks and that has helped limit further falls in copper,” said an LME ring trader. The dollar was flat after edging lower against a basket of currencies, which had offered a modest boost to metals prices. A weak dollar makes commodities priced in the U.S. unit cheaper for holders of other currencies. Investors will closely watch a speech from U.S. Federal Reserve Chairman Ben Bernanke on Friday at a lodge in Wyoming’s Jackson Hole, for reassurance from the Fed that it stands ready to deal with the turmoil engulfing financial markets. “After soft German growth and a poor U.S. state manufacturing report last week, the Federal Reserve symposium at Jackson Hole, Wyoming, will be the pivotal event for commodities,” ANZ wrote in a note.
In a boost to the demand outlook for copper, China’s imports of refined copper rose 8.8 percent to a six-month high in July on spot shipments booked in May and June. “The data showed import numbers were better than the month before and it’s still a good number,” said Andrey Kryuchenkov, analyst at VTB Capital. But China has warned that the eurozone’s debt crisis will hurt the country by sapping demand for exports, the nation’s top official newspaper said on Monday. However, it added that Beijing’s relatively small holdings of euro assets will limit any damage to foreign exchange reserves.
China accounts for nearly 40 percent of global copper demand, estimated at around 19 million tonnes this year.