1 5 - 1 7 OC T O B ER 2 0 1 4 I B UC H A R E S T I RO MA N I A

TRENDS REGARDING EVOLUTION OF GLOBAL METAL MARKET

PRICES
SEMENESCU Augustin, MARCU Dragos, NECSULESCU Alina
University POLITEHNICA of Bucharest, Romania
University POLITEHNICA of Bucharest, Romania
University POLITEHNICA of Bucharest, Romania
asemenescu2002@yahoo.com, dragos.marcu@yahoo.com alinanecsulescu@yahoo.com

Preliminary Abstract
Metal price fluctuations have recently been a point of interest not only because of their
cyclical volatility but also because of their interaction with business cycles. The price
evolution studied on London Metal Exchange in the last ten years reflects the common
tendency of growth, especially for some metals (nickel, lead, tin), that reached exceptional
high level. The main factors causing these movements in the stock market quotation are:
the high level of demand in connection with a limited offer, the economic context affected
by high energy price, US Dollar's exchange value long-term weakness mostly against
Euro and the stocks getting low in London Stock Exchange (LSE). However the whole
range of price for nonferrous metals is continuous increasing to a higher level, with
positive influences for domestic producer and exporters.
Dynamic fluctuation of nonferrous metals prices is continuous under attention not only
because of their cyclical volatility but also because of their interaction with business
evolution cycles and critical changes in the world economy.
One conclusion is coming frequently: the tendency of rising prices for metals is dictated
by macroeconomic influences. The main macroeconomic factors are industrial production,
consumer prices, interest rates, stock prices, and exchange rates.
Analyzing the prices evolution of nonferrous metals on London Metal Exchange in the last
ten years reflects the common tendency of growth, especially for some metals (nickel,
lead, tin) that reached exceptional high levels.
In the same time, its remarkable that all prices reached extremely high levels with positive
influences for domestic producers and exporters. In our analysis it is very important to
assess the influence of the international crisis which generates a high fluctuation in
pricing.

www.romat.upb.ro
romat.upb@gmail.com
Bucharest Romania

1 5 - 1 7 OC T O B ER 2 0 1 4 I B UC H A R E S T I RO MA N I A

NON-FEROUS METAL MARKET

Fig.1. Nickel price evolution on the world market in the last 7 years

Nickel: the market stock price on London Metal Exchange in April 2007 reached a new
record of 52.350 52.375 dollars/tone the highest value from 1979, when the metal was
first introduced.
In the near future the nickels price evolution is expected to preserve a high degree of
volatility mainly dictated by continuous increasing demand from China and by the unequal
proliferation of speculative based trading.

Fig.2. Lead price evolution on the world market in the last 7 years

A metal with high tendency of increase in price is lead. During the first part of the
considered period, lead price reached a new record level in September 2007, around
www.romat.upb.ro
romat.upb@gmail.com
Bucharest Romania

1 5 - 1 7 OC T O B ER 2 0 1 4 I B UC H A R E S T I RO MA N I A

3.900 3.950 dollars/tone. The main factor is the strong immediate demand for the auto
storage battery industry in spite of the shortage of the market.

Fig.3. Copper price evolution on the world market in the last 7 years

An metal with a tendency of maintaining the price is copper.

Fig.4. Zinc price evolution on the world market in the last 7 years

Zinc quote on London Metal Exchange has reached its maximum value of 4.500
dollars/tons at the end of year 2006. Starting with 2007 the price has fallen with almost
50% and now has stabilized.

www.romat.upb.ro
romat.upb@gmail.com
Bucharest Romania

1 5 - 1 7 OC T O B ER 2 0 1 4 I B UC H A R E S T I RO MA N I A

Fig.5 Aluminum market price evolution in the last 7 years

Aluminum is the metal that shows a clear tendency of decrease in price. The beginning of
year 2006 brought a historical maximum quote of 3.300 dollars/tone.
Precious metals is a very special case. The precious metal price is increasing
continuously. When the global markets are instable or oil price is moving up and down
caused by frequent terrorist attacks, the majority of investors are looking after the metals
with stabile value on the market. The main factors which have a powerful influence in
price evolution are the following: the budgetary deficit of USA, concerns about high levels
of inflation, low confidence in US dollar, difficult situation from Middle Orient.
The price evolution on the global market is a multifaceted process, very difficult to predict
and it usually has a different evolution compared to the stock market.
[1] London Metal Exchange Prices by MetalsMarket.Net
[2] Labys, W. C., Achouch, A., Terraza, M., (2000), Metal prices and the business cycle,
Natural Resource Economics Program, AS2034, West Virginia University, Morgantown,
WV, 265056108, USA, Published by Elsevier Science Ltd.
[3] Steve, F., (2003), Higher Prices Reconfigure Gold Market Strategies, Engineering and
Mining Journal.
[4] Wellmer, F.W., Dalheimer, M., Wagner, M., (2008) Metal Prices- Economic Evaluations
in Exploration, Second Edition, Pages 63-70 Publisher Springer Berlin Heidelberg

www.romat.upb.ro
romat.upb@gmail.com
Bucharest Romania