News

March 01, 2010

As Metals Track Sideways In A Finely Balanced Market, What Happens Next In Terms Of Demand Will Be Crucial

By Rob Davies

The New Year is no longer quite so new, and some of the optimism that surrounded markets at the start of 2010 has started to look a little frost damaged. It is now clear that the major developed economies are recovering, but that they are recovering more slowly than they have done from past recessions. On the other hand, the economic powerhouses of China and India are still advancing rapidly, despite some timid attempts to check the headlong rush in China.

It’s in that context that capital markets have now gone into a state of limbo, uncertain whether to power ahead in anticipation of further good news or consolidate to lock in the gains already secured.

The LME Index gives as good a guide as any as to what’s been going on in the base meatls space since the start of the year. The Index began January at 3,450, and then drifted down to 2,900. A strong rally took it back up to 3,400, but a lack of direction has seen it drift it back to 3,200....