By Steve Fiscor, Editor-in-Chief
Last month was a good month for both precious and nonferrous base metals prices. Gold finally eclipsed the much anticipated $1,300/oz level and nearly reached $1,350/oz in early October. Silver prices climbed $3.84/oz to $23.29/oz, a 19.8% gain. Platinum prices climbed 11% (or $178/oz) to $1,705/oz. As good as this news is, base metals posted some equally good numbers.
For the last month, copper showed the lowest percent price gain, which was 8.9%. Copper prices climbed $674.50/metric ton (mt) or $0.31/lb to $8,215/mt ($3.73/lb). Lead climbed 9.8% to $2,293.50/mt ($1.04/lb) and zinc climbed 10% to roughly the same price: $2,298/mt ($1.04/lb). Even though aluminum climbed 13.4% to $2,335/mt ($1.06/mt), the real story with nonferrous base metal prices was nickel and tin.
The nickel supply fell 51,000 mt short of demand in the first seven months of this year, well beyond the more than 7,500 mt deficit during the same period last year, according to the World Bureau of Metal Statistics. In the last month, nickel climbed 18.2% to $24,875/mt ($11.31/lb), one of the highest percentage price gains for nonferrous base metals—second only to tin.
Spot prices for tin climbed $4,970/mt ($2.26/lb) to $26,400/mt ($12/lb) in the last month and many believe it could rally to as high as $28,000/mt ($12.72/lb). Rainfall has disrupted output in Indonesia, the world’s largest tin exporter. PT Timah, the largest Indonesian producer, believes the shortage could last well into 2011. Venture Minerals, a company opening a tin mine in Tasmania, said the global shortage could last as long as five years.
Tin shipments from Indonesia in the first seven months of 2010 fell 12% to 52,000 mt from one year ago. Indonesian output dropped 20% to 85,000 mt according to the Indonesian Trade Ministry. Some analysts are predicting a 15,000 mt shortfall for 2011, the highest deficit since 2003. Tin production is expected to grow 1.5% to 334,000 mt in 2011 and demand is expected to grow 2% to 350,000 mt. A La Niña weather pattern has brought heavier than usual rains to Asia and Australia this year.