 "Rebound in industrial commodities")
Prices of industrial commodities rebounded after hitting their recent lows on short covering by Chinese traders, amid expectations of an upsurge in demand for finished products.
The primary raw material for making steel, iron ore prices bounced back after slumping to a multi-year low of $34 a tonne, trading currently at $48.52 a tonne for delivery on Chinese ports. The rise has been a little over 16 per cent in February, on a sudden spurt in buying from Chinese traders. Such a sharp monthly jump wasn’t seen since December 2012.
Prices of base metals, led by zinc and tin, also firmed up on the benchmark London Metal Exchange (LME), after large bookings came from Chinese traders. The rebound in industrial commodity prices was after years of suppression on unfavourable global economic sentiment. The price rise, however, might nullify profit margins of domestic mills as government-owned NMDC could be tempted to raise the ore price proportionately.
“Ore prices bounced back on Chinese steel mills’ restocking. Intermittent stock building had started before they proceeded on leave on the Chinese New Year. The trend continues on their return to work last week after nearly two weeks of holiday,” said Goutam Chakraborty, an analyst with Emkay Global.
With a little over 700 million tonnes of annual steel production, China announced closure of some mini mills, due to high power and electricity costs. As a consequence, steel prices started stabilising. Most of the mills would be making losses at the current prices.
“The rise is welcome but this is insufficient to restart mining on a large scale, there being a slowing in steel demand globally. The government should also act a little more pro-actively,” said Haresh Melwani, chief executive officer at H L Nathurmal & Co, a Goa-based iron ore mining company.
All these metals and raw materials have bounced back from their respective lows of last month.
Experts are divided on whether these have bottomed out or not.
The important issue is stabilisation of the dollar against major global currencies and the rupee. In a positive development on this front, the benchmark Brent crude oil also rebounded from its recent bottom at $26.39 a barrel, to trade currently at $32.52 a barrel.
Decline in gold & silver
Also following a strengthening dollar, standard gold in India declined by 1.5 per cent or Rs 445 to Rs 28,650 per 10g at Zaveri Bazaar here on Monday. In London, gold lost its haven appeal and declined by 1.7 per cent or $20 to trade at $1,205 an oz, the lowest in nearly two weeks, in late afternoon trade. Silver followed and closed on Monday at Rs 37,035 a kg, a decline of Rs 655 from the previous day of trading. In London, silver declined by nearly two per cent to $15.08 an oz.
The primary raw material for making steel, iron ore prices bounced back after slumping to a multi-year low of $34 a tonne, trading currently at $48.52 a tonne for delivery on Chinese ports. The rise has been a little over 16 per cent in February, on a sudden spurt in buying from Chinese traders. Such a sharp monthly jump wasn’t seen since December 2012.
Prices of base metals, led by zinc and tin, also firmed up on the benchmark London Metal Exchange (LME), after large bookings came from Chinese traders. The rebound in industrial commodity prices was after years of suppression on unfavourable global economic sentiment. The price rise, however, might nullify profit margins of domestic mills as government-owned NMDC could be tempted to raise the ore price proportionately.
“Ore prices bounced back on Chinese steel mills’ restocking. Intermittent stock building had started before they proceeded on leave on the Chinese New Year. The trend continues on their return to work last week after nearly two weeks of holiday,” said Goutam Chakraborty, an analyst with Emkay Global.
With a little over 700 million tonnes of annual steel production, China announced closure of some mini mills, due to high power and electricity costs. As a consequence, steel prices started stabilising. Most of the mills would be making losses at the current prices.
“The rise is welcome but this is insufficient to restart mining on a large scale, there being a slowing in steel demand globally. The government should also act a little more pro-actively,” said Haresh Melwani, chief executive officer at H L Nathurmal & Co, a Goa-based iron ore mining company.
All these metals and raw materials have bounced back from their respective lows of last month.
Experts are divided on whether these have bottomed out or not.
The important issue is stabilisation of the dollar against major global currencies and the rupee. In a positive development on this front, the benchmark Brent crude oil also rebounded from its recent bottom at $26.39 a barrel, to trade currently at $32.52 a barrel.
Decline in gold & silver
Also following a strengthening dollar, standard gold in India declined by 1.5 per cent or Rs 445 to Rs 28,650 per 10g at Zaveri Bazaar here on Monday. In London, gold lost its haven appeal and declined by 1.7 per cent or $20 to trade at $1,205 an oz, the lowest in nearly two weeks, in late afternoon trade. Silver followed and closed on Monday at Rs 37,035 a kg, a decline of Rs 655 from the previous day of trading. In London, silver declined by nearly two per cent to $15.08 an oz.