METALS MARKETS (June 08, 1992)

Base metal markets are exhibiting signs that the long downturn may be nearing an end. Scrap generation is low and any pickup in demand must draw on relatively small inventories in producers’ hands and on the exchanges.

Nickel prices weakened slightly from US$3.367 per lb. in April to close May at an average of $3.324. Stocks were up slightly to 27,792 tonnes from 27,000 tonnes on May 1.

California legislation requiring the introduction of electric vehicles and demand for longer-life electronic batteries has sharpened interest in competing battery technologies. Nickel cadmium and the new nickel metal hydride systems are the current favorites.

Office, clerical and technical workers at Falconbridge’s Sudbury operations were set to vote June 3 on a new 3-year contract. (The old contract expired March 1; the extended deadline to reach a settlement was May 31.) Falconbridge has annual cathode production of 30,000 tonnes nickel and copper, and 1,000 tonnes cobalt.

European and North American stainless mills continue to show improvement and stainless scrap prices remain high, with contained nickel values hovering just under LME prices.

Zinc LME stocks and prices continued their rise during April. May stocks closed at 265,000 tonnes, up from 239,000 tonnes May 1, and the monthly average cash price of US62.3 cents per lb. was up from April’s average of US59.2 cents. The average backwardation (the difference between the higher cash and the lower 3-month price) widened from US1.2 cents per lb. in April to US4.5 cents in May.

Copper markets marked time with end-of-month LME and Comex stocks reported at 293,000 tonnes, down from 308,000 tonnes at the end of April. Average LME prices were little changed at US$1.006 per lb. versus $1.005 for April. — Jack Dupuis is a minerals marketing consultant based in Thornhill, Ont.