HARARE: Copper and nickel prices improved at the end of the first week of December despite a downturn in international commodity prices. This came despite international commodity prices going down across the board.
In the Reserve Bank of Zimbabwe (RBZ)’s weekly economic review for the first week of December, copper rebounded due to China’s largest producers deciding to scale down on refined copper. “Copper prices rebounded by 0,68%, from $4 574,60/tonne in the previous week to $4 605,60/tonne during the week under analysis.
This followed reports that nine of China’s largest copper producers were planning to scale down refined copper production in 2016, in a bid to support the price of the metal,” RBZ said.
“Despite progressive losses incurred since the beginning of the year, nickel prices recovered by 0,58%, from $8 765/tonne realised in the previous week to $8 816/tonne in the week under analysis.” The recovery in nickel prices was underpinned by a decision by Chinese nickel producers to cut production in order to shore-up prices.
In the RBZ review, platinum prices also had an uptick by 0,11%, from a weekly average of $841,80/ounce (oz) registered in the preceding week to $842,70/oz during the week under review. The increase in price was spurred by increased demand for the metal. During the week under review, gold prices declined by 0,65% from an average of $1 069,20/oz recorded in the previous week, to close at a weekly average of $1 062,28/oz.
The decline in gold prices was partly attributable to the disposal of non-interest bearing assets by investors in anticipation of a United States interest rate hike. In addition, the strengthening of the US dollar against major world currencies depressed the demand for gold, with reinforcing downward pressure on prices.
Global commodity prices, which peaked during the commodity super cycle in 2012, have significantly tumbled over recent years, primarily on the back of a weak global growth characterised by a pronounced slowdown in China’s economic growth momentum.
Coupled with weak economic recovery in Europe and sluggish growth in the US, the demand for commodities has been severely undermined, with adverse implications on their prices. While metals enjoyed an upsurge in prices during the week under analysis, crude oil prices have continued to decline, to date crude oil now stands at just under $35 per barrel the lowest in 11 years.
In the 2016 National Budget, Finance minister Patrick Chinamasa said “growth in the mining sector has hampered by constraints facing the sector, namely, depressed international mineral prices, falling demand in export markets, financing, as well as power shortages”.
