Scrap Metal Prices and Scrap Metal Auctions

This is an excerpt from the article Commodity Trends: Depression hits global markets at www.yieh.com

Base metals

In the last few weeks, base metals have traded on a volatile note as sentiments across global financial markets remains weak. Base metals pack has witnessed steep declines in the past few weeks. With prices going below their marginal cost of production, sentiments for the metals weakened. However, the Chinese stimulus package has come in as a rescue to the falling markets.

With the global economic recession in the picture, we feel that the overall trend in base metals remains down but this could change in the 1QFY2009 as we could witness a pick-up in physical buying from the Chinese market. China has announced a $586bn stimulus package that aims at expenditure on infrastructure and social projects. These projects will include construction of airports, subways, railroads and the most important being the re-development of earthquake affected areas of Sichuan. We expect a boost in base metals demand from China in the coming quarter and continue till the next year because most of the spending is earmarked for two years.

China has been the main driver of base metals demand and this upcoming stimulus package could help revive demand in times of a slowdown in global growth. On the back of huge re-development activities in China, we expect base metals demand to rise. Currently, metals are trading at their multi-year lows but the coming year could see a revival in prices which could be backed by rise in demand coupled with production cutbacks by miners. We maintain a bullish view on Copper, Aluminum and Tin as fundamentally these metals are strong, while we remain bearish on Zinc, Lead and Nickel from the long-term perspective.

Source www.yieh.com

Filed under: Base Metal Prices