Market Analysis

The Global Precious Monthly Metals Index, a basket of precious metals, gained five points for a January MMI reading of 110.

Platinum, palladium prices rise after South Africa outages

Palladium and platinum prices received a boost last month after outages at South African mines, MetalMiner’s Stuart Burns explained.

“Power cuts earlier this year pushed the country close to recession,” Burns wrote. “The most recent outages have intensified over the last 36 hours, as heavy rains have flooded some power stations.

“Multiple failures affecting about a quarter of the country’s power plants have forced the utility to introduce severe rolling ‘stage 4’ cuts of 4,000 megawatts of power on Tuesday of last week, but it was still scrambling to fix breakdowns affecting another 15,000 megawatts — roughly a third of its generating capacity — by the end of the week.

“The rolling blackouts were escalated to stage 4 on Friday last week, with a rise to stage 6 (a complete loss of power) bringing many mining companies to a complete halt.”

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The Raw Steels Monthly Metals Index (MMI) showed some strength again this month with another three-point increase, rising to 72.

U.S. HRC and scrap prices increased quite a bit, while LME billet prices also registered double-digit increases.

Key forms of steel increased across the board in the first half of December 2019. Plate prices increased the most, with prices spiking a couple of times during the month.

Source: MetalMiner data from MetalMiner IndX(™)

However, HRC, CRC and HDG increases lost some steam later in December.

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The Rare Earths Monthly Metals Index (MMI) ticked up one point for a January reading of 20.

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Malaysian regulators opt not to increase Lynas’ processing limit

Lynas Corp., the largest rare earths firm outside of China, announced in December that Malaysian regulators did not increase the firm’s lanthanide concentrate processing limit for calendar year 2019.

The Australia-based miner and processor operates a refinery in Kuantan, Malaysia. Last year, the Malaysian government granted Lynas a six-month renewal of its license to operate in the country.

However, regulators opted not to extend the firm’s permitted lanthanide concentrate processing limit for 2019.

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Following from the long-running case recently won by the U.S. over whether the European Union (E.U.) provided Airbus with subsidies, on Dec. 2 the World Trade Organization (WTO) rejected the E.U.’s claim that subsidies were no longer provided to Airbus.

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This ruling gave the U.S. scope to execute an additional Review of New Tariffs on E.U. imports.

On Dec. 12, the U.S. Trade Representative (USTR) issued a notice additional products may see tariff rates of up to 100%, as listed in Annex II, posted at

This annex includes only products not currently affected by Airbus-related Section 301 tariffs issued during late 2019.

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals coverage here on MetalMiner, including: a natural gas transit deal between Russia and Ukraine; aluminum prices; the impact of escalating U.S.-Iran tensions on oil prices; and the copper demand picture.

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Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.

The Stainless Steel Monthly Metals Index (MMI) gained one point for a January reading of 75.

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Just a few months back, in September 2019, the index hit a five-year high of 91.

LME nickel prices increased again in the second half of December after finding support just above the $13,000/mt price level:

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Gold and silver prices in India have hit new highs recent days, to the glee of traders and the consternation of retail buyers.

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Multiple reasons are being attributed to the price rises, first and foremost being rising geopolitical tensions following the U.S. airstrike that killed top Iranian general Qassem Soleimani. Other factors include the fall of the Indian rupee versus the U.S. dollar in currency markets following the rise in the price of petroleum products.

As trends show, gold is normally considered to be a safe-haven asset in times of political or economic strife, as investors and even everyday buyers back off from buying equity or trading in currencies.

Last Monday, gold prices moved past the approximately $569.31 (Rs 41,000) per 10 grams mark, which was in line with sentiments in the international markets.

On India’s Multi Commodity Exchange (MCX), February gold futures, too, surged by 2.4% to a record high of about $570 (Rs 41,073) per 10 grams the same day, clearly underlining the market was betting on the price rise to continue in the coming days.

Last Friday, gold had already breached the $555 (Rs 40,000) mark per 10 grams. In the two days since the rally, the price rose by $25 (Rs 1,800) per 10 grams.

Silver futures on the MCX also went up 2.25% on Monday to trade at about $675 (Rs 48,595) per kilogram.

On Tuesday, however, gold and silver prices fell sharply in Indian markets because of the rupee’s rebounding.

On the MCX, gold futures rates fell 0.51% to $327.12 (Rs 40,265) per 10 grams, Livemint reported.

Back on Wednesday morning, the shine was back in India’s bullion market, riding on the back of prices escalating in the international markets by over 2% to touch $1,610.90, its highest level since March 2013. Gold prices in India hit an all-time high of about $573 (Rs 41,278).

Silver prices, too, were up 1.25% to $18.62 in the global markets, according to CNBCTV18.

Part of the resurgence in prices was attributed to Iran’s firing of rockets at U.S. bases in Iraq, read as a sign of an escalation in Middle East tensions.

Most analysts in India think if geopolitical tensions continue to boil, gold and silver’s upward momentum will also continue.

In addition to the tensions between the U.S. and Iran, other factors that are pushing bullion prices up, including uncertainties related to Brexit and the Hong Kong protests.

Some analysts are even forecasting Indian gold prices to touch $616 (Rs 44,300).

Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.

Also on gold traders’ radar is U.S. Vice President Mike Pence’s speech next week, in which he is expected to lay out the government’s policy on Iran.

The Copper Monthly Metals Index (MMI) increased by three points this month to 76, the highest value seen since hitting 78 in May. Individual price increases in the Copper MMI basket fell in the range of roughly 1-6%.

LME copper prices managed to regain the $6,200 level but proceeded to move sideways from there due to a lack of further indications regarding a pickup in demand.

Source: MetalMiner analysis of London Metal Exchange (LME) and FastMarkets

From a longer-term perspective, copper prices do not appear particularly strong, but they have not dropped all the way back to 2016 price levels — indicating some level of supply dynamics is still at work and supporting prices.

Source: MetalMiner analysis of FastMarkets

Overall, recent weekly trading volumes looked positive overall but muted from a volume perspective, indicating limited support at this time for the recent uptrend (reflected in the sideways turn in the second half of December).

SHFE copper prices finally break six-month sideways trading band

Like LME prices, SHFE copper prices broke out of a short-term sideways trading band that formed in June and are now trading higher.

Source: MetalMiner analysis of FastMarkets

Breaking the next critical resistance level of CNY 50,000/mt will provide a clearer signal that higher prices will hold throughout Q1 2020.

Source: MetalMiner analysis of FastMarkets

Positive reports regarding a pickup in manufacturing demand late in the year supported prices.

Additionally, recent government measures — particularly monetary easing — appeared to support construction demand, a positive development for copper prices.

Demand for copper, a critical industrial, automotive, and construction metal, will remain high.

Current prices remain supported from a long-term perspective, even in the weaker demand environment seen since last year.

Source: U.S. FRED

Chinese construction demand corresponded with noticeable price increases beginning in 2004. That was followed by a drastic decline in prices and trading volumes in 2008-2009, corresponding to the timing of the global recession, which stalled out property growth in China.

While copper presently trades with lower volumes than during the peak years of China’s construction activity, overall copper trading volumes remain higher than during past decades. Baseline demand should continue to support the somewhat higher copper price level. Falling mining output also matters but may exert less immediate impact on prices.

Looking at the long-term chart of price values provides some sense of the metal’s price downside,  upside risk and potential volatility.

Assuming that supply moves toward surplus, as projected for the year by the International Copper Study Group (ICSG) according to its October annual forecast for 2020, it may be difficult for copper prices to increase this year unless demand improves, despite the long-term downtrend in mine supply.

What this means for industrial buyers

Copper prices increased but then stalled out and have not yet regained momentum.

With prices already somewhat higher, industrial buying organizations will need to watch the prices carefully from here for further increases.

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Buying organizations seeking more monthly insight into copper price trends can learn more about our MetalMiner Monthly Buying Outlook.

Free Partial Sample Report: 2020 MetalMiner Annual Metals Outlook

Actual copper prices and trends

Copper prices increased across the board this month, with the LME primary three-month price showing the largest gain at 5.8%, to $6,215/mt. Japan’s primary cash price increased by 5.4% to $6,421/mt.

China’s primary cash and copper wire prices both increased by 4.6%, up to $7,045/mt and $7,040/mt, respectively. China’s copper bar price increased by 4.5% to $7,034/mt. China’s copper #2 scrap price increased by 1.0% — the weakest increase in the index this month — to $5,514/mt.

U.S. producer copper grade 110 and grade 122 increased by 4.3%, both now at $3.62 per pound. U.S. producer copper grade 102 increased by 4.1% to $3.84 per pound.

Korean copper strip increased by 2.8% to $8.14 per kilogram.

The Indian copper cash price increased by 2.3% to $6.20 per kilogram.

The Aluminum Monthly Metals Index (MMI) bounced off last month’s three-year low with a three-point increase to 86. All prices in the index increased by more than 3%.

LME aluminum prices increased in December and surpassed $1,830/mt in early January.

Source: MetalMiner analysis of London Metal Exchange (LME) and FastMarkets

Now analysts are watching to see if lackluster demand will allow recent increases to stick.

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The Construction Monthly Metals Index (MMI) picked up one point for a January MMI reading of 79.

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