Scrap Metal Prices and Scrap Metal Auctions

“Metals had a relatively poor second quarter, with most losing ground. This is in contrast to other commodities, some of which had a storming Q2. Is a slowing global economy beginning to feed through into metals, and what are the
prospects for the rest of the year?” asks the Fortis Metals Monthly jointly brought out by Virtual Metals and Fortis Bank.

The analysis says that global crude oil rally has eaten into consumer spending because of firmer interest rates resulting credit squeeze and higher unemployment.

The recent long-sustained boom in metals prices ground to a halt in Q2 2008, with many of those featured in this report registering substantial falls against Q1.

Except aluminium, platinum and palladium most metals including gold prices will turn to negative over a 12-month period (June 2009), the report said. Aluminium prices will rise 12.1%, platinum 6.6% and palladium 2.8 percent. Among the worst performers could be zinc prices which could fall 21.5%, lead 15%, tin 14.5% and copper 12.6%. Here is the synopsis on metals prepared by Fortis Metals Monthly.

Gold :Gold.s fantastic finish in June took prices to levels not seen since April. Much of it was to do with the dollar, but inflationary pressures are also helping. Gold typically does well in economic turbulence . and central bankers seem united in
their conviction that tough times lie ahead.

Silver: It was no surprise that silver was again dragged higher by gold. This pattern is now well established but a slowing global economy will take a heavier toll on it than the yellow metal.

Platinum: Platinum remains solidly supported by the risk of another supply crunch from South Africa. Against that, the very high premium of diesel versus gasoline in most western markets will deter car buyers from purchasing diesel-engine
vehicles, and that will slow autocatalyst offtake.

Palladium: The market continues to price palladium higher on the view that the metal’s years of excess supply are coming to a rapid end. The data is inconclusive and is likely to remain so for some time to come. Demand is at risk from a global
slowdown, but where platinum loses in autocatalysts, palladium will benefit as more drivers reconsider the merits of gasoline-engines.

Aluminium: China.s electricity supply problems worsened considerably in early July and 12 provinces (out of 22) are now rationing power. It emerged on 10th July that 20 of  China.s biggest aluminium smelters agreed to cut primary metal production in  July by as much as 10%, which pushed the LME price to a fresh record. Kaiser Aluminium.s decision to start charging new customers a sliding-scale electricity  surcharge on fabricated aluminium products is a real sign of the times. Higher energy costs are hurting all metals. producers, but aluminium is most exposed.

Copper:The price has remained remarkably strong despite growing evidence that China.s refined copper imports are very sluggish indeed. In the very long term copper no doubt has a strong demand profile, but right now there is little fundamental support for such elevated prices.

Nickel: BHP Billiton sprung a surprise in June by bringing forward a planned maintenance shutdown of a smelter and refinery. This propped up the sagging price and reminded everyone of nickel.s continuing fragile supply-side picture.

Lead and zinc: The speculative bubble in lead has well and truly popped, while in zinc the expanding global supply is dragging the price ever lower. Further weakness ahead is likely for both metals.

Tin
We may now have a clearer picture as to the intentions of Indonesia regarding its tin export policy. On the other hand the plethora of contradictory signals that have emerged from that country regarding its tin industry have left the market
dizzy. All that can be said for certain is that so far this year Indonesian exports have been very low, and China.s demand very strong . this may be the story for the rest of the year; in which case the price should hold above $20,000/t, although slower economic growth might rock that.

Steel
The LME.s newest contracts have yet to gather momentum; volumes remain relatively low but at least they have been launched into a buoyant market, with long-term world demand likely to grow substantially, and input costs (iron ore
and coking coal) soaring.

Plastics
Plastics are nakedly exposed to the high crude oil price; prices are soaring and this will accelerate the drift towards more production heading to Asia.

Meanwhile, some analysts have already commented that commodity cycle already may have peaked in 2008 and prices could move southwards due to reduced demand. Gold, ofcourse, could breach the barrier depending on dollar value.