Engineering & Mining Journal

JUL 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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64 E&MJ • JULY 2019 MARKETS At the end of June, gold pric- es had climbed to a fi ve-year high of more than $1,400/ ounce (oz), an $84/oz gain (6.3%) since the beginning of the month. Silver prices, which ordinarily trade in a similar pattern with gold, were lagging with only a 3.5% increase, moving comfortably above the $15/oz mark. Palladium's meteoric rise continued with prices climbing to $1,525/ oz from $1,341/oz (13.7% gain) in June. Despite the sig- nifi cant climb in gold prices, which were based on perceived economic worries, palladium prices maintained a signifi cant margin as the precious metals leader due to metal de- mand from the industrial sector. Similarly, iron ore prices climbed 13.4% to more than $109 per dry met- ric ton (dmt) from more than $96/dmt. Despite declining steel demand and prices, iron ore prices have been climb- ing steadily as production from Vale's mines in Brazil slowed. As far as non-ferrous base metals, prices during June climbed for the most part with the exception of tin and zinc. Aluminum prices increased 0.6% to $0.81/lb. Copper prices increased 3% to $2.71/lb. Lead and nickel both climbed about 7% while tin and zinc declined 1%. These positive June price move- ments could be considered good news for miners, but the prices for these metals remain well below recent highs as well as the price levels this time last year. The outlook for base metal prices is not improving. In its Global Base Met- als Outlook, Moody's Investor Services said it thought non-ferrous base metals prices would remain below 2018 levels for the next 18 months and increasing costs would put profi t margins under pressure. The good news is that the an- alysts didn't think base metals would reach the trough levels experienced in the late-2015/early-2016 period. Aside from a response to supply disruptions or other events, Moody's expected no ma- terial upward movement in prices. Moody's report cited trade tensions, tariffs and uncertainties over Brexit as key market concerns contributing to pressure on prices across the base metals markets and heightened volatil- ity. China is a key market for the base metals industry from both a supply and consumption perspective. Moody's cen- tral economic scenario sees average an- nual GDP growth for China decreasing to 6.2% in 2019 and 6% in 2020. Outlook for Base Metal Prices Softens By Steve Fiscor, Editor-in-Chief Gold and silver prices provided by KITCO Bullion dealers ( Platinum group metals prices provided by Johnson Matthey ( Non-ferrous base and minor metal prices provided by London Metal Exchange ( Iron ore prices provided by Platts Iron Ore Index. Currency exchange rates were provided by (June 28, 2019) Precious Metals ($/oz) Base Metals ($/mt) Minor Metals ($/mt) Exchange Rates (U.S.$ Equivalent) Gold $1,408.90 Aluminum $1,773.50 Molybdenum $26,950 Euro (€) 1.138 Silver $15.29 Copper $5,972.00 Cobalt $27,600 U.K. (£) 1.271 Platinum $824.00 Lead $1,914.00 Canada ($) 0.765 Palladium $1,525.00 Nickel $12,665.00 Iron Ore ($/dmt) Australia ($) 0.701 Rhodium $3,350.00 Tin $18,805.00 Fe CFR China $109.18 South Africa (Rand) 0.146 Ruthenium $253.00 Zinc $2,580.50 China (¥) 0.071

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