Whilst no movements were dramatic amongst the LME metals, warehouse stocks generally subsided whilst traded prices were static. The exception was aluminium which put on 2.4% to $1823/t. Share prices are firming for choice.

We note:

Still the contangos persist in copper (4.5% on 15-month metal) and aluminium (25%) whilst lead, zinc and nickel are in minor backwardation.

WIM says: We think it means this: few are expecting a bounce in the developing country economies. The surplus built-up by over-capacity therefore needs to be addressed by attrition. That comes in two forms. One is a cutback on current capacity and the other is not bringing on major new projects. Both, to an extent, are being addressed.

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About David Hargreaves

David Hargreaves

David Hargreaves is a mining engineer with over forty years of senior experience in the industry. After qualifying in coal mining he worked in the iron ore mines of Quebec and Northwest Ontario before diversifying into other bulk minerals including bauxite. He was Head of Research for stockbrokers James Capel in London from 1974 to 1977 and voted Mining Analyst of the year on three successive occasions.

Since forming his own metals broking and research company in 1977, he has successfully promoted and been a director of several public companies. He currently writes “The Week in Mining”, an incisive review of world mining events, for stockbrokers WH Ireland. David’s research pays particular attention to steel via the iron ore and coal supply industries. He is a Chartered Mining Engineer, Fellow of the Geological Society and the Institute of Mining, Minerals and Materials, and a Member of the Royal Institution. His textbook, “The World Index of Resources and Population” accurately predicted the exponential rise in demand for steel industry products.