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‘Ultimately, you need a buyer’: why it is hard to short the minor metals markets

February 01, 2012 - 09:00 GMT Location: London

KEYWORDS: minor metals prices , short , cadmium , antimony , cobalt , copper prices , LME

Base metal prices have rallied strongly in the first month of the year, but certain minor metals have been under considerable strain, with the outlook growing dimmer by the day.

In the cadmium market, for example, two consecutive 65-tonne tenders put pressure on prices last week, bringing the market to three-year lows. Some sources are now anticipating weaker demand from China after seven heavy metal production plants in Guangxi were closed temporarily to mitigate pollution in the Longjiang River, where cadmium concentrations were found to be 80 times over the legal limit. Selenium, bismuth and antimony prices have held up so far this year, but cadmium, gallium, indium and tellurium are all weaker. Cobalt has rallied moderately, after slumping to two-and-a-half-year lows at the back end of 2011. Cadmium has been by far the weakest performer, with the 4N Metal Bulletin cadmium quotation shedding 15% in January. As prices have worsened, so has the mood in the market, with the slide prompting one (long) trader to lament: “The only interesting position in this market is short. If only I could get...

All material subject to strictly enforced copyright laws. © Euromoney Institutional Investor PLC.

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