Mineral prices were subdued in October as the United States dollar held firm while the demand in China, the biggest consumer of local minerals fell owing to crippling power challenges, Business Times has learnt.
Zimbabwe exports its platinum, copper and nickel to China.
But, with the Asian giant experiencing severe power cuts, the demand for Zimbabwe’s minerals went down.
Multiple analysts said this week if the problem persists this could adversely impact on Zimbabwe’s export receipts as platinum is now the country’s largest foreign currency earner.
In its report for the week to October29, the Reserve Bank of Zimbabwe (RBZ) said prices for all minerals went down except for gold.
“Platinum prices fell by 2.0% to US$1,028.89 per ounce, during the week ending October 29 2021, from a weekly average of US$1,050.40 per ounce in the previous week which ended October 22 2021.
“Prices were weighed down by a stronger US dollar and subdued industrial demand, particularly in China, the world’s largest consumer of metals,” part of the RBZ report reads.
RBZ said copper prices reversed gains recorded in the previous week, falling by 3.2% to US$9,940.50 per tonne in the week under analysis from a weekly average of US$10,271.20 per tonne in the previous week due investor concerns that the ongoing power crisis in China would dampen demand exerted downward pressure on the price of the red metal and a stronger US dollar.
Nickel prices declined by 1.8% to US$19,957.00 per tonne, during the week under analysis from a weekly average of US$20,318.00 per tonne in the prior week.
“In line with developments in prices of other base metals like copper, nickel prices were also weighed down by a stronger US dollar and subdued demand, particularly in China,” reads part of the report.
With global inflation resurfacing due to a high demand of products after lockdown restrictions were lifted in various countries, gold is used as a backing currency hence the reason for the firm prices.
“The central bank reported that gold prices remained upbeat, supported by high inflation expectations, a development which boosted the precious metal’s safe haven demand,” reads part of the report.
The increase in the price of the yellow metal was, however, capped by a rebound in the US dollar as well as prospects of interest rate hikes in the medium term.
Prices rose by 0.7% to US$1,793.82 per ounce from US$1781.04 per ounce in the previous week.