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Metals are an incredibly diverse and ever-changing investment option, with different values that are
often subject to economic shifts, political activity and supply and demand dynamics. Metals possess
incredibly unique chemical properties that make them suited to very specific applications. This iteration
of the Davenport Quarter Reporter focuses on four stories from the last quarter that reinforce the global
demand for the metals industry.
Palladium Shone
as Environmental
Rules Boosted
Demand
Mid-May proved to be a significant
period for palladium as analysts
forecast a brighter outlook for
the metal, following tighter
environmental regulations and
robust auto sales in the US and
China.
World Gold Council Released
Demand Stats for Q1
Market
development
organisation, the World Gold
Council (WGC) published its
most recent Gold Demand
Trends report in mid-May. The
analysis revealed that total
demand for the metal hit 1,079
tonnes in the first quarter,
marking a 1% decrease
from a year earlier. Although
demand was seen to dip 11
tonnes, appetite could rally in
the April-June period overall,
particularly in India around the
festival of Akshaya Tritiya.
According to reports, Q2 could
end on a higher note for India
– the world’s second largest
consumer of gold – after China
overtook the nation by nearly
100 tonnes in Q1 to claim the
number one spot.
Although India’s gold demand
rose 15% in Q1 to reach 191.7
tonnes, Chinese demand hit
around 272.9 tonnes despite
a 7% year-on-year decline.
Combined the two nations
accounted for 54% of total
global consumer demand for
gold in the first quarter.
Aluminium China 2015 to Highlight the Future of
Green Cars
Asia’s leading event on the aluminium supply chain is due to highlight the metal’s role
in technological and environmental developments later this year.
Set to take place in July, Aluminium China
2015 will showcase the increasingly
more prominent role aluminium plays in
the auto sector. As manufacturers strive
to improve energy efficiency and turn to
greener vehicles, the metal is being used
for a variety of automotive products,
ranging from engine casings and chassis
to wheels, doors and connectors.
As China aims to implement a national
strategy designed to reduce average
passenger fuel consumption by a third
before 2020, more manufacturers are
launching electric and hybrid models.
Visitors to the event will not only be able
to gain insights on aluminium’s role in
the auto sector, but they will be able to
witness aluminium forging, stamping
and extrusion products, in addition to
disruptive technology set to impact the
industry.
Palladium is predominantly used
in the manufacturing of catalytic
converters, which reduce the
emissions and pollutants released
by exhaust fumes. This application
means the metal is often subject to
change according to the health of the
auto market and efforts to improve
environmental standards.
Last year the palladium market
was recorded to be in a deficit, with
shortfalls expected this year, in 2016
and through to 2017, according to
forecasts from Australia & New
Zealand Banking Group Ltd.
At the time of the report, the metal
had already risen 8% after a low
in March. However, one analyst
with Capital Economics in London
appeared optimistic for the metal by
stating, “Fundamentally, palladium is
our favourite metal.”
KGHM Regained
Position as Top
Silver Producer
At the beginning of May, Polandbased mining company KGHM
reclaimed the position of the top
silver producer in the world. Ranked
by a Thomson Reuters report, the
firm was said to produce 1,256 tons
of the white, lustrous metal in 2014,
exceeding its previous year’s total by
7%.
The World Silver Survey is one of
the leading annual reports and the
only one to rank all producers of
the metal. The comparison takes
into account the silver market’s
key indicators, including economic
analysis, financial figures published
by the firms and interviews with
company representatives.
Herbert Wirth, President and CEO
of KGHM said of the result; “It took
us one year to regain our leadership
position in the silver market. In
2013, we were ranked as third
silver producer. In the previous year,
however, we raised production by 7%
due to optimum ore processing and
smelting activities.”