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Blog
South Africa’s power woes are impacting metals
February 15, 2008
Aluminum continues to draw pricing strength from fears of reduced supply owing to power shortages in South Africa and China…prices were holding above the $2,800 level ($1.27/lb) at midday Friday in London…Reason: South Africa’s state utility is considering a complete power supply buy-back from both of the country's aluminum smelters plus one in Mozambique for the balance of 2008, which could remove around 1.5 million metric tons of aluminum from the global market…
Meanwhile, in precious metals, platinum prices are reflecting South Africa’s power problems with spot platinum hit another record high of $2,050…as for futures, following a (rare) down day on Tuesday, Wednesday’s April contract came roaring back, added $61.90 on the day, closing at an all-time high, and briefly trading above the $2,000 level…Thursday, the April contract finished up $22.20 at $2,005.90, a first-ever close above $2,000....
Still bullish on copper…Barclay’s Capital fundamental outlook has mine supply failing to keep up with demand with the shortfall being made up from the secondary side and from existing stocks (refined metal and concentrates)…Barclay’s is less convinced that this “gap” in 2008 can be filled by scrap and aboveground stocks, consequently, they’re forecasting that copper will test all-time highs in the first half of this year…
Natixis is predicting a tight tin market in 2008 with the global market, they figured, coming up short by 2,000 metric tons this year…the firm is forecasting London Metal Exchange cash tin to average $16,000/mt ($7.26/lb) this year…the January 2008 Reuters survey, meanwhile, had came up with a consensus guess of $15,388 ($6.98) with a range of $11,023 to $18,000 offered by respondents.
Posted by Robert J. (Bob) Garino on February 15, 2008 | Comments (0)