Welcome to Spring and I hope all the Fathers had a relaxing Sunday enjoying Fathers Day.
This week has seen a slight rebound in the Non-ferrous markets in contrast to the Iron Ore and steel markets which continue to fall away.
In Australian dollar terms, both Copper and Aluminium have opened the month in their strongest positions since early July. The question is…..why? In what can only demonstrate just how fickle and fragile markets are, one of the reasons being reported for the rise in non-ferrous prices is that as manufacturing has slowed, a stimulus package is now expected to spur on the economy and therefore increase demand in raw materials.
**** Copper Rises as Chinese Factory Gauge Spurs Stimulus Speculation **** By Agnieszka Troszkiewicz – Sep 3, 2012
Copper rose in London as contracting Chinese manufacturing fueled speculation about economic stimulus in the world’s biggest consumer of the metal.
China’s official Purchasing Managers Index released Sept. 1 slid to 49.2 in August, the first reading since November below the level of 50 that divides expansion and shrinkage. The Federal Reserve may engage in more stimulus as needed to fuel growth in the U.S., the second-biggest copper user, Chairman Ben S. Bernanke said Aug. 31 in Jackson Hole, Wyoming.
“China remains very important for industrial metals,” Nic Brown, head of commodities research at Natixis SA in London, said today by e-mail. “Every indication of economic weakness opens up the prospect of further new stimulus measures.”
Copper inventories tracked by the LME fell 2 percent to 225,275 tons after shrinking for a 10th month in 11 in August, daily exchange figures showed. They’re at the lowest level since May 28. Orders to take metal from warehouses jumped 8.9 percent to 40,225 tons on bookings in New Orleans.
**** Dollar hits six-week low after retail data **** From AAP – September 03, 2012 1:22PM
THE Australian dollar has fallen to a fresh six-week low after the release of weaker-than-expected retail data. The currency fell as low as 102.40 US cents following the release of retail sales figures at 1130 AEST. Australian retail spending fell 0.8 per cent in July, data released by the Australian Bureau of Statistics on Monday show.
The Australian dollar has been on a downwards slide since miner BHP announced two weeks ago it would shelve its multi-billion dollar Olympic Dam mine expansion, raising fears the mining boom was over.
The release of Chinese economic data, on Saturday, showing a further contraction in the country’s important manufacturing sector, also had hurt the Australian currency, Mr Solar said