Metals End Week Mixed
Metals prices were mixed last week as China’s trade and production data revealed the world’s second biggest economy ended 2017 in fine fettle.
But there are a few niggles of doubt about the sustainability of the solid price gains saw last year for the likes of copper, nickel, lead, zinc, iron ore (in the closing months), coal and several other commodities.
That’s why there was a sense of uneasiness about some commodities last last week - rising US bond yields, the weaker dollar and fears of a US government shutdown made for a mixed and confusing end to the week as well.
Take iron ore - Chinese imports in December and 2017 were solid, steel production was OK, but showing signs of the cuts imposed by the government late in the year to curb pollution in 26 northern cities- but iron ore eased.
Despite a rise on Friday thanks to gains in China’s futures market to $76.75 a tonne for the Metal Bulletin iron ore index for 62% ore delivered to northern China, that was a way off the most recent high of $US79.08 a tonne hit on January 11.
Friday’s gain was $US1.88 a tonne or a rise of 2.5%.
In New York Comex gold futures settled higher Friday, trimming their losses for the week, amid the rising risk of a US government shutdown at the weekend, which happened.
That so-called safe haven effect (and a weaker US dollar) helped gold regain ground from the big fall on Thursday which was its largest one day drop in a month.
February gold rose $US5.90, or 0.4%, to settle at $US1,333.10 an ounce. On Thursday, gold fell $US12, or 0.9%, to settle at $1,327.20 an ounce, the biggest single-session dollar and percentage fall since December 7.
For the week, gold fell about 0.1% following gains in each of the last five weeks.
On Wednesday, the contract settled at its highest level since September 8 2017.
On Friday, the US dollar index closed down around 0.4% by the close on Friday night, our time.
The Aussie dollar ended the week a tic under 80 US cents for a gain of around one US cent on the week. US 10 year bond yield hit a 13 month high around 2.66% on those shutdown fears - our 10 year yields ended at 2.86% as well.
In other metals, Comex March silver rose 0.5% to $US17.036 an ounce, ending down 0.6% for the week.
Comex March copper fell 0.4% to $US3.188 a pound, losing about 1% for the week.
March palladium rose 0.5% to $US1,098.40 an ounce, a 0.6% loss on the week, while April platinum rose 1.3% to $US1,020.10 an ounce, for a weekly gain of 2.5%.
In London lead futures on the London Metal Exchange touched $US2,630.50 a tonne on Friday its highest since August 2011, before closing down 1.1% at $US2,581.
LME zinc did not trade at the close but was bid 1.2% higher at $US3,416 a tonne after touching $US3,444, the highest since 2007.
LME aluminium finished down 1% at $US2,219 a tonne a and three month copper lost half a per cent to end at $US7,041 a tonne, while nickel closed up 2% to $US12,720 and tin finished 0.9% higher at $US20,600.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.