Skip to content


Helpful Links

Good News / Bad News... May 17th, 2019 by John Gross

The good news of course, is that the United States reached a deal to end steel and aluminum tariffs on our neighbors to the north and south, and is also delaying a decision to impose tariffs on imported cars from the European Union.

But the bad news is that the United States and China remain poles apart on reaching any kind of trade agreement.

The interesting news is not really news, but rather opinions of various commentators telling us with great authority how the trade war with China will play out. OK . . . moving right along.

While soybeans, and the farmers that grow them are viewed as one of the biggest losers in the skirmish, the collateral damage is felt far and wide, to include metals.

The question I have been asking myself, but have not been able to answer is: how much is the stronger dollar weighing on metals, as opposed to the trade war?

And going a step further, at what point will markets respond to low inventories as opposed to being held back by the dollar and tariffs? – Again, no answer from within.

From a different point of view, Iran is back in the headlines, with talk of war, and the U.S. Navy is headed in their direction. Oddly, neither crude oil, nor gold has responded in any meaningful way. - Yet?

As for other metals, copper has fallen below support and the10 week moving average as the bar chart illustrates. Likewise, aluminum broke support and now stands at a near 2 ½ year low.

Lead is the loss leader on a year to date basis, and year over year, while nickel, tin and zinc are trying to decide which way to turn in the near term.

Zinc is of particular interest as the price has fallen about 12¢ over the past four weeks; inventories, while still low have doubled since early April, and the Cash to 3s stands at a $148 backwardation, its widest since May 2006, when the price was $1.80.

As usual, more questions than answers.


View Charts (PDF)