HomeAnalysisJanuary snapshot of key mineral commodities: Ceteris Paribus

January snapshot of key mineral commodities: Ceteris Paribus

Eben Mabunda
THE reviews of the key commodities highlighted here apply till January 28, the last formal day of trade for January 2022. Gold and copper were in the red for the month, with the rest of the minerals here indicated in the black.

Nickel

Nickel prices tumbled 7,06% in the week to January 2022, on profit-taking, with the Chinese futures market hitting the session’s 8% lower limit after a blistering rally to record highs as caution prevailed ahead of the US Federal Reserve’s meeting.

The most-traded March nickel contract on the Shanghai Futures Exchange dropped to as low as 163 460 yuan (US$25 823,88) a tonne.

The metal (used to make stainless steel and chemicals for electric vehicle batteries) touched US$24 000 a tonne in the prior week – its highest point since August of 2011.

Platinum
Up over 4,8% in the year, platinum prices closed the last week of the first month down 1,9%.

Meanwhile, investors are keen to buy platinum while it is trading for less than gold on a per ounce basis, with demand being driven by both investors and industrial off-takers.

According to Equity Axis research, given the weak automotive demand, fuelled by the shortage in semiconductors, this is likely to keep the pressure on platinum group metals (PGM) prices through 2022 as worries over uptake in catalytic converters continue to mount.

Aluminium
Aluminium prices increased due to a spike in demand from Chinese steel manufacturers.

In the week to the close of January, the metal rose by 1,38% to settle at US$3 083 per tonne from US$3 041 per tonne recorded in the previous week.

In other news, China’s aluminium imports in December eased from the previous month, snapping three monthly gains; although imported volumes were strong enough to solidify 2021’s position as a record year of shipments.

China, the world’s biggest aluminium producer and consumer, imported 3,2 million tonnes of unwrought aluminium and products — which include primary metal and unwrought, alloyed aluminium — in 2021, a new record high and up from 2,7 million tonnes in 2020

Copper
Down over 2% in January Year-To-Date, Copper prices headed towards their biggest weekly decline since October 2021 as the prospect of Central Bank tightening policy reduced investor appetite for risk assets and boosted the dollar.

European copper fell again and Chinese equities slumped to 16-month closing lows, though US markets steadied.

The dollar touched its strongest against a basket of major rivals since June 2020, making metals costlier for non-US buyers.

Gold
Gold prices fell by 2,6% in the week to January 28, the worst monthly showing since September as the US Federal Reserve’s plans for interest rate hikes boosted the dollar, driving away bullion investors.

The US Federal Reserve’s hawkishness is largely unmatched by other major central banks, strongly supporting the dollar which represents quite a headwind for gold.

The dollar index rose slightly higher but is still in the route to a monthly gain, limiting gold demand as a firmer greenback makes bullion more expensive for holders of other currencies.

Oil/Brent
In the week to January 28, oil rose by 2,4% as a supply shortage as well as political tension in Eastern Europe and the Middle East put prices on track for their biggest monthly gain in almost a year.

The benchmarks recorded their highest levels since October 2014 on Friday 21 at US$91,70 and US$88,84 respectively – their sixth straight weekly gain.

They were headed for about 17% gains this month, the most since February 2021.

Today it is above all the concerns about supply outages in connection with the Ukraine crisis that keeps pushing prices ever further up.

  • This article was written in collaboration with Tinotenda Mafuya
  • Mabunda is an analyst and TV anchor at Equity Axis, a leading financial research firm in Zimbabwe. — ebenm@equityaxis.net

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