METALS COMMENTARY — Stagnant markets expected to improve as demand holds firm

Metals remain stagnant, characterized by rumors, opinions, volatile prices and slowly tightening inventories, but little news that could be characterized as seriously negative.

It appears likely that demand in 1995 will prove stronger than forecast, as suggested by the continued decrease in inventories held by producers, traders, exchanges and consumers.

U.S. ferrous plate & structural scrap prices remain reasonably steady at around $151 per unit. Stainless 304 edged down to $1,100-$1,125 ($1,150-$1,175 in September), while 316 slipped to $1,425-$1,450 ($1,575-$1,650).

The following average prices and inventories on the London Metal Exchange (LME) refer to the first three weeks of October, with the previous month’s figures shown in parentheses (unless stated otherwise).

In base metals, slowly falling prices on the LME contrasted with declining inventory levels.

The need to reduce some overbuilt stocks of stainless scrap pushed nickel to US$3.57 (US$3.81) per lb., as inventories fell to 54,090 (60,546) tonnes.

Increased consumer demand nudged cobalt free-market quotes for Western A Grade ahead to US$29.25 per lb. (US$29 on Aug. 31).

Steady battery sales continued to support lead at US27.9 cents (US26.9 cents) per lb. as stocks fell again, to 200,375 (210,375) tonnes.

Meanwhile, zinc sat at US44.4 cents (US44.8 cents) per lb., as stocks fell to 730,150 (744,925) tonnes.

Beset by increased supply and firm demand, copper weakened to US$1.279 (US$1.322) per lb. The combination of inventories on the LME and Commodity Exchange of New York rose to 188,456 (178,100) tonnes.

Spot molybdenum oxide prices firmed at $5 ($4.50) per lb., as markets remain balanced. Ferro-molybdenum hovered around $6 ($7) per lb.

At the same time, precious metals have been virtually inert, with little news to stir them. Gold sat at US$383.54 (US$383.03) per oz., while silver, equally lacklustre, eased to US$5.38 ($5.43) per oz.

In platinum group metals, slowing auto sales and a lull in Japanese demand had the combined effect of softening prices. Platinum slid to US$414.32 (US$430.01) per oz., while palladium fell to US$137.91 (US$143.76) per oz. Rhodium did not fare much better; it slumped and then recovered to US$345 per oz. (US$330 on Sept. 30).

— Jack Dupuis is an agent, broker and consultant specializing in the marketing of metals.