Metals in the Americas:The Weekly Extract

The S&P 500 rose 1% WoW to 2,438, whereas the S&P 500 M&Mincreased 4% to 99. Coking coal reversed last week’s losses and gained5% WoW as talks of a possible supply shortage in the domestic Chinesemarket emerged. Iron ore increased 3% as high margins encouraged steelmills to choose high grade feedstock for blending and supply cutsemerged (~15% of global supply is loss making below $60/t). US HRCprice increased 3% WoW to $592/t as recent price hikes take hold. Zincrose 8%, followed by copper (2%) and nickel (3%). Gold and silverremained flat as the market awaited cues regarding Fed’s next rate hikeand US economic data.

    Industrial Metal equities rose 5% WoW on underlying commodity gainsand capacity cuts in iron ore and nickel. Precious Metal equities gained 5%as bullion prices remained steady. Steel & Service Center equitiesincreased 4% as mills announced price hikes ahead of the Section 232outcome. Aluminum & Specialty Metals remained relatively flat.

    Teck (+11% WoW) led the gains among Industrial Metals after last week’s17% decline likely due to coking coal rising 5% on possible supply cutsexpected in China. Vale rose 4% as iron price rebounded and demand forhigh grade ore in China increased. Within Precious Metals, Silver Standardrose 9% despite flat commodity pricing. Within Steel & SC equities, AKSteel and US Steel gained 11% and 10%, respectively, on expectation ofimports subsiding and recovery in demand. Within Aluminum & SpecialtyMetals equities, Century Aluminum rose 5% after last week’s 12% decline.