Slowing Metal Market Adjustments

John Robertson

PortfolioDirect

Several indicators of raw material usage released in the last few days add to the evidence of a slowing cyclical adjustment in metal markets. The change in tempo is not surprising since metal markets usually need an acceleration in global growth to perform at their best. The World Steel Association has reported that global steel output in the first four months of 2015 fell 1.7% and Chinese production declined 1.2%. The International Lead Zinc Study Group has reported a 2.3% increase in zinc metal usage in the first three months of 2015. The 74,000 tonne increase was swamped by a 261,000 tonne increase in metal production. The International Copper Study Group reported a 3.5% decline in copper usage over the first two months of the year but a 5.0% increase in refined metal production. While still early in the year, these indicators of market conditions are broadly consistent as they suggest delays in inventory adjustments which were expected to underpin higher prices. The zinc market is probably the market segment most vulnerable to a change in expectations.


John Robertson
John Robertson
PortfolioDirect

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment