Commodity Market Overview

Within the construction industry as their overdraft

Many businesses, large and small, have a huge source of great ideas that can help them improve, innovate, and grow, and yet so many of these companies never think of using this amazing corporate asset. What is this highly valuable asset? Its own people.

Strategic and commercial approach with issues

Says Morgan Fraud, the author of The Thinking Corporation, “Given that we are all capable of contributing new ideas, the question becomes how do you successfully generate, capture, process and implement ideas?” Becoming an organization capable of answering this question can benefit in a number of ways

Seven weeks working ‘pro bono’ with a charity

Growth through innovation/creativity. Rather than be constrained by ideas for new products, services and new markets coming from just a few people, a Thinking Corporation can tap into the employees.

Retail banks wake up to digital lending this year

The effort vastly improved the company’s planning and execution functions, created and implemented a new stock policy that accounted for specific SKUs and key variables, streamlined the order preparation process and reduced distribution transport times.

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Price Forecast 2018

  • Metals prices have risen in five of the past six quarters, and prices for the first
    nine months of the year averaged 26 percent higher than the corresponding
    period of 2016. All metals prices increased in the third quarter, led by zinc and
    nickel, which jumped 14 percent on robust demand and reduced mine
    production (zinc) and solid stainless-steel demand (nickel). Iron ore and
    copper also surged, rising 13 and 12 percent, respectively, in part due to
    supply shortfalls.
  • China has been a major driver of tighter metals supply. In part, this is due to
    government efforts to reduce surplus capacity by targeting old, inefficient, and
    illegal production. It is also strengthening environmental and safety
    inspections, and has directed polluting industries in 28 northern cities to
    reduce production during the winter, particularly aluminium and steel (fed by
    iron ore) plants. These directives may also affect metal demand as cities
    curtail construction to fight pollution. Globally, capital expenditures by mining
    companies are rising after five years of decline linked to falling prices.
  • On the demand side, strong global economic growth and stimulus measures
    in China helped move some markets into deficit, notably zinc. China has
    accounted for the bulk of global growth in metals consumption over the past
    15 years. China has consumed more metal in last year due to its focus on
    infrastructure and development.
  • Base metal prices have been on the uptrend in comparison to prices of metals
    in 2016. Some metals like Zinc have increased in price substantially due to
    supply cuts from big producers, like Glencore and closure of Australian mine
    and Century mine.
  • Oil Prices have recovered from last years low of USD 30 to USD 60.

Zinc Overview 

  • Recent large mine closures due to exhaustion—the latest
    happened in Australia and Ireland in early 2016—and price-induced “shut-ins”
    in Australia and the United States have tightened the zinc concentrate market.
    China, which produces nearly half of the world’s refined zinc, has seen its
    output constrained by environmental inspections, closures of illegal mines,
    and the delayed start-up of new capacity. This has accelerated China’s zinc
    imports. Meanwhile, demand to galvanize steel in China has been strong,
    underpinned by steel usage in the construction, infrastructure, automotive,
    and “white goods” (heavy consumer durables) sectors. The zinc market is
    expected to remain in deficit in 2018- 19 until new capacity comes online.

Price Projections

  • Metals prices are projected to ease slightly in 2018 due to profit booking in
    2017 year end. Lot of hedge funds infuse fresh capital in the market so the
    beginning will start slowly.
  • Upside risks to the price forecast include more robust global demand and
    production shortages. Supply could be curtailed by slower ramp-up of new
    capacity, tighter environmental constraints, and policy action that limits output
    and exports, notably in China. Downside risks include slower demand from
    China, risks of substitution with other materials, and higher than-expected
    production—including the restart of idled capacity and easing policy action in
    China.

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Expert Opinion

 

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Zinc Overview

 

Recent large mine closures due to exhaustion—the latest happened in Australia and Ireland in early 2016—and price-induced “shut-ins” in Australia and the United States have tightened the zinc concentrate market. China, which produces nearly half of the world’s refined zinc, has seen its output constrained by environmental inspections, closures of illegal mines, and the delayed start-up of new capacity. This has accelerated China’s zinc imports. Meanwhile, demand to galvanize steel in China has been strong, underpinned by steel usage in the construction, infrastructure, automotive, and “white goods” (heavy consumer durables) sectors. The zinc market is expected to remain in deficit in 2018- 19 until new capacity comes online.

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Price Projections

 

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