With the end of the third quarter almost upon us, surely this was one of the most challenging summers in terms of the non-ferrous market and also the wider global market. The US/China trade war seems like a never-ending seesaw that has left global markets on edge but with somehow an idea of what is going to be the next step for the two big powers as market movement trends have been similar for some time. The major effect is that world economic growth is slowing and that a global recession is seen as the only outcome of this ongoing conflict.
The base metals volumes traded have been slowing owing to the downturn in trade affecting mainly the large but contracting industrial and manufacturing economies. The LME has witnessed stability across most metals for long periods but sudden price movements resulting from any significant macro news have been extremely volatile. Copper reached lows of US$ 5500 per tonne before recovering to US$ 6000 levels during the third quarter. This creates more pressure on the volumes being traded by non-ferrous suppliers faced by weak, slow demand for base metals amid fears that the global economy is moving towards recession given the continuous stream of weak economic data.
The Middle East is at a turning point as recent attacks on oil fields in Saudi Arabia have given rise to fresh tensions in the region. In addition to weakening global markets, the attacks have added weight to current negative sentiment and to the outlook for the remainder of this year.
Aboura Metals (ARE), Board Member of the BIR Non-Ferrous Metals Division