Volatile metal and mining stocks enjoy another huge rally
March madness reached the commodities markets on Thursday as investors piled into the mining sector on the back of a jump in the copper price and a renewed iron ore rally
On the Comex market in New York copper for delivery in May climbed as much 2.8% to $2.2925 a pound or some $5,050 a tonne. It’s the highest closing value since November 4 and the red metal is now up more than 18% from a six-year low hit mid-January.
Other industrial metals also gained led by zinc which rose 2% to $1,812 a tonne nearly matching a five-month high hit earlier in March. Nickel rose to $8,765 a tonne on the LME. Nickel was last year’s worst performing metal with a 40% drop and hit a 13-year low mid-February of $7,725.
The world’s largest nickel producer Norilsk said this week prices are unlikely to rise from today’s levels unless supply is cut significantly and inventories drop from the historically high 450,000–500,000 tonne level.
The Russian giant estimates 70% of current production is lossmaking. With latest data from the International Nickel Study Group showing the metal moving into a small deficit in January the bottom may be finally in for the volatile commodity.
Iron ore’s white knuckle ride also continued with the steelmaking raw material jumping 5.5% on Thursday to trade at $55.4 a tonne. A week ago iron ore recorded it’s biggest one day rise on record with a 19.5% surge to above $60 but the rally quickly evaporated. Iron ore is still up nearly 30% in 2016.
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