n° 161 – July 2019

Now past its halfway point, 2019 is still proving to be one of the most challenging and uncertain years. The first half witnessed continuous LME volatility, driven by a global slowdown and rising tensions from trade conflicts worldwide.

In the Middle East, summer heatwaves are greatly affecting the flows and supply of metals. Non-ferrous yards have encountered difficulties over recent months with the slowdown in markets and the sourcing of material, alongside a slowdown in global demand for the scrap metals from this region. Geopolitical tensions have resurfaced in the region over recent weeks, with concerns about future disruption of vessel movements through the Strait of Hormuz.

The LME has been performing positively since last month’s G20 meetings, thus providing some hope for markets and investors with regard to the trade war between the world’s two biggest economies. Metals have been given a boost since the US and Chinese governments made clear their intention of achieving a resolution and not levying new tariffs. Base metals have recorded gains of 11% in the week prior to writing this report on the back of positive sentiment from markets and investors. Copper returned to US$ 6100 per tonne from the US$ 5700 of a few weeks ago. Nickel enjoyed a week of historic 12% gains, the highest since 2009, while lead and aluminium also climbed remarkably, with the former breaking through US$ 2000 per tonne after prolonged resistance.

There is some optimism in the markets following the recent rallies which, hopefully, will be maintained across the second half of the year.