METAL MARKETS

ZINC: Producers report reasonably steady sales as consumers continue to buy on a month-to-month basis. In spite of London Metal Exchange (LME) inventories increasing in April from 221,575 to 239,325 tonnes, LME prices rose during the month from an average in March of US51 cents per lb. to an April average of US59 cents. This rise is attributed to a squeeze on buyers covering short positions against tightly held LME inventories.

NICKEL: April LME prices traded in a narrow range of US$3.34-3.39 per lb. Japanese markets continue slower. U.S. stainless mills are busy. European markets are slower.

There is increased pricing turmoil in all markets because of attempts to place new ferronickel offerings in the U.S., and Russian official — and unofficial — exports to Europe and Japan. Because of the above competition and with nickel values in scrap in the US$3.20 range, class II nickel units are selling to stainless mills at slight discounts to the LME. COBALT: Mainly because of problems in Zaire, 1991 cobalt metal prices surged from US$14 per lb. to US$30. Recent prices have eased and the range has widened to US$24-28, depending on quality.

Consumers continue to draw down stocks, buying only as required, and waiting for further news on the supply side. With indicated 1992 world production at 20-22,000 tonnes, it remains to be seen whether consumers can reduce their recent annual needs from the 27,000-tonne level.

The only large inventories on hand are the strategic stockpiles held by the U.S. and Japanese governments who are under pressure to release some portion of these on a staged basis. Helping a little, Russian exports have increased to an estimated annual rate of 1,500 tonnes but it is unlikely these will increase again.

PRECIOUS METALS: The platinum group metals markets are mixed. Influenced by the downturn in Japan and slower auto sales, the average April platinum price drifted from US$356.85 per oz. in March to US$347.71 in April. Similarly, April palladium was US$83.53 per oz., down from US$84.37 in March. Reflecting the modest pickup in North American auto sales and labor problems at South African mines, rhodium (also used in auto catalysts) traded at US$3,000 per oz. in March and eased lately to US$2,900. Rhodium traded well beyond US$5,000 in 1991 before closing the year at US$1,925. Silver weakened in April to an average of US$4.03 per oz. from US$4.10 in March and looks likely to test the US$3.95 level again.

Trading quietly was gold, whose average prices eased again in April to US$338.73 per oz. from US$344.64 in March.

— Jack Dupuis is a minerals marketing consultant based in Thornhill, Ont.