Aluminum:

Since early September, aluminum prices have been affected more by global economic worries than by market fundamentals. Though the light metal's prices generally were less turbulent than those of other metals, their volatility was rising. LME three-month aluminum fell from $2,438.50 a mt in early September to an annual low of $2,137 in mid-October, despite falling LME inventories (down more than 80,000 mt since Sept. 1); a 10-percent cumulative increase in global aluminum consumption through September, according to CRU Group (London); and widespread expectations that aluminum and aluminum scrap use will continue to grow in the years ahead. UBS (Zurich), for one, expects Chinese automotive, housing, and infrastructure demand to help increase global aluminum consumption 7.2 percent a year, on average, until 2015. Though few expect a repeat of late 2008/early 2009, when aluminum prices dipped below 60 cents a pound, Fastmarkets.com (London) recently lowered its annual forecasts to $2,400 a mt for 2011 and $1,850 for 2012.

Copper:

The red metal remains particularly sensitive to every perceived tremor in the economic and financial landscapes. LME three-month copper lost one-quarter of its value from early September to October, slipping as low as $6,812 a mt on heightened concerns about the European sovereign debt crisis and potentially slower growth in China and elsewhere. Copper market fundamentals paint a less bearish picture, however, with the global refined copper market posting a deficit of nearly 120,000 mt through July 2011 due to supply disruptions such as the strike at the Grasberg mine in Indonesia, the International Copper Study Group (Lisbon, Portugal) reports. Though copper prices rebounded above $8,000 a mt in late October in response to the latest European debt plan and improved U.S. economic growth, analysts continued to slash their price forecasts for 2011 and 2012. Goldman Sachs (New York), for example, projects average copper prices of $8,827 a mt in 2011 and $8,750 in 2012.

Iron and Steel:

Both raw material and finished steel prices were trending down at the start of the fourth quarter, including a decrease of $50 a short ton for U.S. hot-rolled coil since mid-September, according to Platts (New York). U.S. ferrous scrap prices, which have been unusually stable for much of the year, also came under pressure in October amid reports of softer overseas interest. Steel production remained high, however, with world crude steel production showing an 8.2-percent increase through September, to more than 1.1 billion mt for the first nine months of the year, the World Steel Association (Brussels) says. Given this yearÕs improved steel production and capacity utilization ratesÑand barring a sharp downturn in consumptionÑmany analysts expect steel mills to begin restocking and raw material supplies to undergo a rebalancing period, both factors that will affect market conditions heading into 2012.

Lead and Zinc:

Among the base metals, lead and zinc are among the worst price performers so far this year, with LME three-month prices down more than 20 percent from the end of 2010 through late October. The sister metals remain under pressure due to the persistent global economic concerns and their ongoing global market surpluses. The International Lead and Zinc Study Group (Lisbon) predicts that the global refined lead market will remain in surplus in 2011 and 2012, while the world refined zinc market will post even larger surpluses than lead. As a result, many forecasters have reduced their lead and zinc price forecasts. Standard Bank (Johannesburg), for example, lowered its average lead price forecasts for 2011 to $2,450 a mt and 2012 to $2,485 while cutting its zinc price forecasts for those years to $2,200 and $2,075, respectively.

Nickel and Stainless Steel:

The nickel and stainless steel price roller coaster showed no signs of slowing in September, as LME three-month nickel prices plunged as low as $18,050 a mt in late September, down sharply from their February highs above $29,000. Lackluster stainless steel demand, expected nickel market surpluses, and shifting investor risk appetites have contributed to price volatility this year. The International Nickel Study Group (Lisbon) anticipates a small global nickel surplus in 2011, while the International Stainless Steel Forum (Brussels) expects world stainless steel production to post only modest gains this year. Though reports indicate that diminished scrap availability and reduced stainless steel scrap demand have balanced each other recently, market participants remain cautious going forward.