SHANGHAI, Sept. 15 (SMM) -- SHFE base metal prices had fallen to a record low last seen in August yesterday on concerns over European debt crisis. As leaders from Germany, France and Greece said they are convinced Greece will remain in the Euro zone at a teleconference yesterday, base metal prices found support but which was modest.
French President Nicolas Sarkozy and German Chancellor Angela Merkel are “convinced” Greece will remain in the euro area, and stressed Greek President to strictly and efficiently implement all reform measures. In this context, European stocks overnight closed with gains, while three major US stock indexes were also up over 1%.
The news that emerging countries will buy European bonds is also positive for European financial markets. When attending the 5th Summer Davos Forum, China’s Premier Wen Jiabao especially stated to prevent the further contagion and expansion of some Euro-zone member’s sovereign debt problems, and added that China believed European economy could overcome difficulties and was still willing to invest in Europe. Other Bricks countries also made hints to buy European bonds. Brazil’s Finance Minister admitted that all finance ministers of Bricks countries would hold a meeting in London on September 22nd to discuss ways of helping Euro-zone countries to get out of current debt issues. A stable global economy is beneficial to all new emerging countries including Brazil and China. Economic prosperity in Europe and the US is also helpful for the development of new emerging countries.
Currently escalating European debt crisis weighed on base metal market, and concern over economic slowdown prevailed in the market. Losing confidence in the euro zone, investors turned to buy the US dollar as a safe-haven, pushing the US dollar index higher and triggering commodity price slumps across the board. In this context, SHFE base metal market is under intense pressure, and is expected to fluctuate lower recently.