moneycontrol
IIFL`s view on base metals
Edited by : AL CIRCLE
1 min read
Base metals complex witnessed annihilation in September, with double digit declines on a mom basis seen across the board. In fact, most of the metals, barring Aluminium are down by more than 20% on an YTD basis. Debt jitters in Europe have unnerved the markets, as market participants have lost confidence in European authorities to resolve the escalating debt crisis. Till now, fire-fighting measures by EU officials have been futile, as their endeavour is dwarfed by the huge quantum of the debt load. Effectively, bond yields have soared in countries, which are deemed to the most pregnable to the debt contagion. Specifically, Greece, Italy, Portugal, Spain, and Ireland or colloquially named as “PIIGS” are considered to be the most susceptible. On the manufacturing front, Purchasing Managers survey across various geographies has entered the contraction zone. GDP rates in the West have moved dangerously close to recession. Effectively Chinese economic activity is clearly showing signs of slowing.
As usual, global supply-demand equation constantly changes in all base metals.In case of Aluminium, global surplus remains at 614,000 tons during Jan-Jul 2011, compared with a surplus of 794,000 tons in the same period last year.
As usual, global supply-demand equation constantly changes in all base metals.In case of Aluminium, global surplus remains at 614,000 tons during Jan-Jul 2011, compared with a surplus of 794,000 tons in the same period last year.
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