NEWS - Industrial metals set for worse month for four years - S&P Dow Jones

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Martin Hayesmartin.hayes@fastmarkets.com+44 (0) 20 7337 2148

London 25/05/2016 - Industrial metals prices are set to notch up their worst monthly performance for four years - the sector has markedly underperformed compared with other markets, S&P Dow Jones Indices said.

"While most of the markets have calmed as investors wait for Brexit and the Fed rate decision, industrial metals are crashing," S&P said in a report on Wednesday.

The S&P GSCI Industrial Metals Total Return is down 8.7 percent in the month to date and on target to record its worst month since May 2012 when it lost 9.7 percent, Jodie Gunzberg, global head of commodities and real assets at S&P Dow Jones Indices, said.

"At this rate, the sector is having not only its worst month in four years but its seventh-worst May since 1978, when the index history started," she said.

Metals are being pressured by the strength of the dollar - now around seven week highs - and rising inventories, S&P said.

Among the major base metals, copper has fallen to its lowest for three months this month, tin to levels last seen in mid-February and nickel its weakest for seven weeks. Nickel is the biggest index loser - it is down 12 percent in May.  

Warehouse stock levels have climbed as well heading into the slow summer period.  

"It is difficult for producers to supply exactly the amount needed. After some mining closures and supply reductions, prices rose to cause suppliers to bring more of the metals to the market," Gunzberg said.


(Editing by Mark Shaw) 



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