SHANGHAI, Jan. 17 (SMM) –
German Economy Contracts in 4Q 2012
Germany reported that its economy contracted by 0.5% QoQ in 4Q 2012, the worst quarterly performance since the financial crisis, and sending the country on the edge of recession. German economy grew by 0.2% in 2Q compared to the previous quarter.
Data also displayed that price-adjusted German GDP increased by 0.7% YoY in 2012, slightly lower than market expectation of 0.8%. Working-day adjusted German GDP grew by 0.9% YoY in 2012, in strong contrast with 3.1% seen the previous year.
Base Metals Fall Further amid Market Worries on US Debt Ceiling
Except for tin futures, most of base metals have slipped to or below the bottom of fluctuating ranges. On the SHFE markets, aluminum, lead, and zinc were dominated by short investors, while copper prices slid below the 30-day moving average. SMM expected domestic base metals to extend losses Wednesday.
Unfavorable News Forces More Downstream Companies to Suspend Production
Negative news piled up Tuesday, Fitch threatened to cut credit ratings of many countries, while German economy dropped in 4Q on a quarterly basis. The Word Bank lowered global economic outlook for 2013, significantly depressing market risk appetites.
Fitch warned that if the US can not raise debt ceiling in time, it will prompt a formal review of the country's triple A rating.
Meanwhile, Fitch also pointed out that if UK's March budget report indicates a continuous increase in domestic deficit, the country may also lose its AAA rating.
The Word Bank slashed global economic growth outlook for 2013, which heightened market pessimism. The World Bank predicted that the global economy would grow at a rate of 2.4% in 2013, below the previously estimated 3.0% in June 2012, citing that slow recovery in developed countries will drag global economic growth down. At the same time, the bank lowered its economic growth forecast on developing countries from June's 5.9% to 5.5%.
According to the latest SMM survey, downstream companies consuming copper and aluminum have begun suspending operations for unit maintenance. Around 48% of the surveyed copper wire rod producers anticipate January orders to fall further from December, and SMM estimates that the average operating rate during January at these copper wire rod producers should fall sharply to 64.66%, down 6.79% from December. Roughly 50% of aluminum plate, sheet, strip and foil producers expect January orders to decrease, 30% see flat orders, and only 20% of producers are upbeat about the outlook. An increasing number of small and medium downstream companies have started halting production for unit maintenance.