Copper prices surged in the aftermath of the US election.
There is a tight relationship between the uncertainties related to global economy growth and the outlook for platinum.
As a result of rising Chinese steel prices and supply disruption in Australia and Brasil, the price of iron ore has increased by more than 25% from Q4 2015 to Q3 2016.
Nickel prices have seen a bit of a run in the late half of Q2 and early part of Q3 before seeing a slight pull back.
How long will lower for longer last?
Gold proves it unpredictability with a strong recovery in the first half to Q3 followed by some recent short term volatility.
Questions continue to remain about demand from China, which has kept downward pressure on nickel prices and will likely continue to do so for the near future.
We saw companies in the platinum industry writing down assets to account for the expected slower recovery of the platinum prices and the reduction in supply.
In the short term, the increase in low-cost production in Australia and Brazil will continue to put pressure on the price of iron ore as it outstrips the increase in demand.
After commencing the year at a 6-year low, it appears that copper prices have hit a floor. A weaker US dollar, supply disruptions and opportunistic restocking by China have all contributed to improved investor sentiment.
Uranium: The required signals are not there (yet!)
As copper prices hover just above the US$2.00/lb mark, conjecture exists as to how low prices will go and for how long they will remain at these levels. While concerns over excess supply initially sparked weakness this year, demand concerns have continued to dampen market sentiment.
Gold has seen a steady increase in demand over the year particularly in the jewelry market in India and China. Central bank purchases have again remained consistent and continue to illustrate that there is value in gold.
In the short-term, the ongoing increase in low-cost supply will continue to put pressure on the price of iron ore as it outstrips the increase in demand.
In the short term, questions about reduced demand for stainless steel from China will continue to put pressure on the price of nickel.
In the view of Derek F. Meates, KPMG Commodity Lead for Uranium, this commodity will break out of its holding pattern when a number of events combine from Japanese restarts, supply disruption and a return to long-term contracting.
Gold continues to be a measure of value globally whether it be in the form of jewelry or bars held by central banks as is demonstrated through the demand outlook.
Rough diamond prices dropped about 3 percent in 2014, from US$230/carat in 2013, to reach US$224/carat in 2014, driven by the tightening of credit by banks to the diamond industry.
Uranium Q4 2014 - Q1 2015
The uranium market remains on hold waiting for the right signals.
Could a rebound be just around the corner? In the last bulletin we considered how low prices could go. As it turned out, to a five year low of $2.44.
In the short term, the ongoing surge in low-cost supply –driven by both brownfield mine expansions and productivity improvements – will continue to put pressure on the price of iron ore as it outstrips the increase in demand.
Like many in the industry, I am bullish on the long-term prospects of coal in general. Shorter-term, we are seeing improvements in pricing – albeit not at the levels we’d experienced just a few years ago.