Saturday, June 13, 2009

Economy: Metals financial bubble

Pravda - World prices on non-ferrous metals have grown considerably again and hit the record high this year against the background of the sliding dollar. Nickel had the most considerable price increase at London Metal Exchange today. A ton of this metal gained 5.09 percent and reached the maximum of this year – $15359.

Tin gained 4.62 percent to $15850 per ton. Copper overcame the psychological level of $5000 per ton – to $5180. A ton of aluminum increased by 2.44 percent to $1638, zinc – by 2.75 percent to $1607, lead – by 3.22 percent to $1744.

The market of metals, just like the market of oil, may undergo a speculative attack, specialists believe. Investors currently concentrate their activities on raw materials, producing yet another financial bubble. Experts say that such a considerable price growth on metals contradicts to the state of affairs in the real sector of economy, which suffers from a very serious crisis.

Many news agencies reported a possible bankruptcy of several US companies dealing with the distribution of non-ferrous metals. Manhattan Brass & Copper, for instance, decided to close its Maspeth service center in New York before June 18.

A spokesman for the company said that the enterprise suffered from the decline on the market of non-ferrous metals as a result of the economic crisis.

Manhattan Brass & Copper was established 71 years ago, but it failed to stay afloat under the current economic conditions. Now the company will have to put Maspeth up for auction.
Published by Mike Hitchen, Mike Hitchen Consulting
Putting principles before profits