VANCOUVER (miningweekly.com) – The materials price index (MPI) from Global Insight by IHS Markit has slipped 0.1% last week, the first decline in four weeks, as metal markets finally began to slide, the firm advised on Friday.

The strength of the last few weeks has been mainly attributable to a surge in metal prices and the aftermath of Hurricane Harvey and its impact on chemicals and energy markets. Indeed, the latter two are still seeing price growth as the longer-run impacts of the hurricane continue to oscillate around markets, the research firm advised.

For metals markets, a decline in interest from China has soured the mood, pushing down prices after many weeks of price growth. Ferrous markets have enjoyed strong gains in recent weeks, with iron-ore prices nearly reaching $80 per dry metric ton unit and copper prices pushing through $6 900 per metric ton over the same period.

“For both these metals it appears the mood has changed, with prices slipping over the last week as Chinese financial interest wanes and physical buyers wait on the side lines for more favourable pricing,” IHS Markit senior economist for pricing and purchasing Ben Orhan stated.

Last week there were some downbeat macroeconomic announcements, with Chinese industrial production reportedly growing 6% in August (annual basis), down 0.4% on July. In the US, the Bloomberg consumer comfort index eased from 52.6 to 51.9 last week, following the turmoil from Hurricane Harvey.

Further, in the Eurozone, industrial output was up just 0.1% month on month (m/m) in July, a tepid rebound following the 0.6% m/m drop in June.

“It seems that some of the exuberance that has built over the last few months has begun to slip, although a decline over one week does not mean a trend reversal. Therefore, the next few weeks are key to ascertain if the current slip in metals pricing is indicative of a broader drop or this remains a false dawn,” Orhan noted.