Nonferrous Metals Market under Phase to Consolidate High Prices

Nonferrous metals market entered the adjustment phase after the continuous rise since 2005 and the remarkable boost in April 2006. The future trend is difficult to forecast but could be impacted by other international commodities such as precious metals and crude oil. Akio Shibata, chief economist of Marubeni Research Institute, analyzed and explained recent conditions and future visions of international commodity markets to Japan Metal Bulletin.International commodity markets are wholly in the adjustment phase at present including crude oil, nonferrous and precious metals. Mr. Shibata indicated the U.S. interest rate might not be raised more than 5.5% and the foreign exchange rate of US dollar could weaken again, while Japanese yen and Chinese yuan would become stronger against US dollar. He expected stronger yen and yuan would support international commodity markets and the price decline could soon stop at the some level. He said commodity markets should consolidate price foothold at relatively high level within June after the markets have kept rising up with no adjustment. Then he expected the prices might turn upward again in July.Mr. Shibata showed the opinion the recent steep rise of copper price at London Metal Exchange was not owing to bubble phenomenon, since LME copper price was estimated to have marked US$ 13,700 per tonne in 1980 when LME trading was still not dollar-based but pound-based. He pointed out primary commodity prices stayed at the too low level by 1990s, while general prices in advanced nations grew up to 2.3 times in these 25 years. Mr. Shibata said that nonferrous metal prices seem to have rebounded after the long stagnancy and that international commodity markets including nonferrous metals are seeking new price balance points at the relatively higher sphere than ever.