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Nonferrous Market Update

Among the major base metals, lead and zinc prices have outperformed this year, rising 29 percent and 26 percent, respectively, for the year-to-date as of early October on the London Metal Exchange, while LME aluminum prices have advanced nearly 26 percent YTD as of this writing:

Oct25NFMktUpdChart1500

According to the International Lead Zinc Study Group, world refined lead metal demand exceeded supply by 119,000 metric tons during the first eight months of 2017 as apparent demand for lead increased 12.4 percent in China, was up 3.5 percent in Europe, and rose 3.1 percent in the United States. ILZSG also reports that “…the global market for refined zinc metal was in deficit by 287kt over the first eight months of 2017 with total reported inventories declining by 274kt over the same period.”

In comparison, LME 3-mo. copper prices were up just over 24 percent year-to-date through early October. Red metal prices rallied between June and September thanks in part to reports that China would curb mixed and machinery scrap metal imports as part of their efforts to improve environmental protection and boost investment in their domestic recycling infrastructure, presumably resulting in higher Chinese demand for copper ore, concentrates, and cathode imports. And while a number of analysts signaled in September that copper had become overbought, copper prices resumed their ascent after Chinese market participants returned from the Golden Week holidays in early October. Expectations for improving Chinese copper demand, positive readings on manufacturing output, rising consumer confidence, and potential copper supply disruptions were also seen as supportive. Here’s the year-to-date trend in copper prices at the London Metal Exchange:

Oct25NFMktUpdChart2

Nonferrous Beat

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