Commodities Daily Alert

21 November 2008

Most Base Metals Prices Smashed…Again

The bad economic news story continued last night. International equity markets were weak. And the run of international economic data remained soft. The US leading index fell by 0.8pct in October to the lowest reading since April 2004.
Against this depressing background, concerns over weakening metals demand remained prominent and most base metals prices were sharply lower. The exception was the zinc price which finished slightly higher. The aluminium price fell by 5.0%. LME aluminium stocks jumped sharply higher. The International Aluminium Institute reported that aluminium production in IAI member countries rose by 0.8% in October from September. However, the daily average of aluminium production declined in October from September. Overall, aluminium production in October was just 0.6% above the level of a year earlier, with China's production below the level of a year earlier.
Oil prices fell sharply last night, with the expiring NYMEX light sweet crude December contract falling below USD50/barrel. The decline in the oil price reflected mounting worries about the international economic outlook and oil demand. T
he gold price (spot) firmed, apparently benefiting from some investor demand for a safe haven.

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