Source: Jeff Yoders/MetalMier
Metal prices are falling across the board, more concerning is this fall is happening while the dollar has weakened this month. Recent data shows that US consumer price inflation rose less than expected in May.
A weaker dollar usually helps push metal prices up but this month that doesn’t seem to be the case. For the month to date, most industrial metals are down on the London Metal Exchange:
Aluminum: -2.9%. The light metal was trading this week below $1,700 per metric ton and near record lows.
Copper: -3.3%. The metal rallied from January through May (in a dead cat bounce) but the rally stopped last month and prices seem to be heading back to the lows recorded in January.
Nickel: Flat. The metal is holding its value in June but as with any other metal, it seems to lack upside momentum.
Lead: -7.2%. Lead made a very suspicious rally in April, it fell sharply in May and the fall continues in June. The metal is now nearing a 5-year low.
Zinc:-5%. Like lead, zinc rallied in April but didn’t succeed. The metal is proving incapable of making significant upside moves while commodities are bearish.
Tin: -3.8%. The metal keeps falling, as if that was the only thing it can do since 2014.
What This Means For Metal Buyers
Weakness in metal prices can be seen across the board. Industrial buyers might be tempted to buy a lot of metal as prices look cheap. Contrary, we recommend to wait for signals that the market is turning up. In bear markets, what looks cheap can become cheaper…