Scrap Metal Prices and Scrap Metal Auctions

Thanks to China and the Fed Reserve’s steps, global base metal prices are set to see new heights now.

China has decided to go ahead with its plans to make use of the recession and prices fall, and stock base metals so that it can boost its future projects. This move has helped the prices of metals to go up.

Copper prices have benefited most from this shift in fortune and are already up approximately 25 per cent this year, compared to a decline of more than 50 per cent in 2008.

And Scotiabank’s base metals index was up 1.8 per cent in January 2009 after five consecutive months of declines.

Forget equities, get into currencies.Trade now

Thanks to a massive stimulus package, China has been buying huge quantities of metals, particularly copper — 300,000 tonnes so far, with an additional 900,000 tonnes expected — for its State Reserve Bureau to supply future development projects.

The Chinese economy is clearly boosting the market starting right now.

Added to that, a plan by the US central bank to pump more than $1 trillion into the American economy is driving the US dollar lower due to fears of inflation.

All goods priced in US dollars, including commodities, will have to rise because the US dollar is falling.

The buy-back of $300 billion of US government bonds will also help to ease the liquidity crunch and make it easier to borrow money and finance new projects.

Prices for copper, nickel and zinc soared in recent years until mid-2008 amid skyrocketing demand from surging economies like China and India.

But as the global financial crisis deepened through the end of 2008, prices for industrial metals slumped as demand for everything from appliances to cars to new homes fell.

At the end of the year, copper prices were down to approximately $1.50 per pound after reaching above $4 per pound in the summer, while zinc prices were approximately 50 cents per pound after reaching above $1.20 per pound in February. Nickel was approximately $4 per pound after hitting $15 per pound in February.

Last week, copper traded on the New York Mercantile Exchange was up to $1.82 per pound, zinc was 58 cents per pound and nickel was $4.56 per pound.

Several analysts believe the recent rise in prices indicates base metals prices have hit bottom and are on their way back up.

Many base metals miners, including Lundin Mining Corp. (TSX:LUN), HudBay Minerals Inc. (TSX:HBM), First Nickel Inc. (TSX:FNI), FNX Mining Co. Inc. (TSX:FNX) and Xstrata Nickel – responded to the slump in prices by temporarily shutting their less profitable mines.

Source: www.commodityonline.com

Filed under: Base Metal Prices