Global Metals Market Update: Copper, Lead, and Tin Experiences Slight Recovery Amid Economic Concerns

Strategic Insights -

The global metals market has seen a slight recovery in copper, lead, and tin prices as economic concerns begin to fade, according to industry experts. The economic downturn's impact on aluminum prices has leveled off, with consumers starting to restock, while copper production in Zambia has increased by 18% due to the start-up of new mines. Meanwhile, PT Timah, Indonesia's largest tin producer, plans to expand offshore mining to secure future supplies.

Key Takeaways:

  • Copper prices could trade up to $7,000 a metric ton in the next three to six months as demand catches up with China, according to Hermes Fund Managers.
  • The global refined lead market will be in surplus just over 100,000 metric tons in 2010, up from the 80,000 ton surplus forecast for this year, the International Lead and Zinc Study Group said.
  • U.S. copper producer Freeport McMoRan Copper + Gold (FCX) could resolve its dispute over the contract for the Tenke Fungurume copper-cobalt project in Congo later Monday, but maintains its license is legally binding.
  • PT Timah (TINS.JK) will seek to expand offshore mining to secure future supplies, according to the company.
  • U.S. lead demand has begun to recover and should continue to improve going into 2010 as the economy returns to health and consumers restock depleted inventories, a senior executive at The Doe Run Co. said.
  • Zambian copper output in the first eight months of the year increased 18% on the year due to increased production at copper mines, as well as the start-up of Lumwana Copper Mines in the northwestern province.

Statistics:

  • Copper futures managed a gain Monday mainly due to movement in the foreign-exchange market.
  • Base metals in London ticked mostly higher Monday, largely in response to a softer tone in the U.S. dollar.
  • Copper futures on the Shanghai Futures Exchange were mildly lower Monday, tracking declines in the London Metal Exchange.
  • The global refined lead market will be in surplus just over 100,000 metric tons in 2010.
  • Zambian copper output in the first eight months of the year increased 18% on the year.

Sources:

  • Dow Jones Commodities News via Comtex: Xstrata PLC's Chilean subsidiary sells 70% stake in El Morro copper project to Barrick Gold Corp. for $465 million in cash.
  • Svein Richard Brandtzaeg, Chief Executive, Norsk Hydro ASA: The effect of the economic downturn on aluminum has leveled off and consumers are starting to restock.
  • Central Bank of Zambia: Zambian copper output in the first eight months of the year increased 18% on the year.
  • Freeport McMoRan Copper + Gold (FCX): The company could resolve its dispute over the contract for the Tenke Fungurume copper-cobalt project in Congo later Monday.
  • PT Timah (TINS.JK): The company will seek to expand offshore mining to secure future supplies.
  • Hermes Fund Managers: Copper could trade up to $7,000 a metric ton in the next three to six months.
  • International Lead and Zinc Study Group: The global refined lead market will be in surplus just over 100,000 metric tons in 2010.
  • The Doe Run Co.: U.S. lead demand has begun to recover and should continue to improve going into 2010.