On October 6, New Zealand’s Reserve Bank put up the official cash rate for the first time in seven years. Although the increase was widely anticipated, the announcement still had an immediate minor impact on foreign exchange spot rates whereas bond yields remained largely flat.
While LME pricing has continued to encourage material into metal merchants’ yards in recent weeks, the nationwide lockdown owing to COVID has impacted on the general supply of metal as the manufacturing sector was not able to generate its regular volumes of material. Domestic consumers are all buying at current levels.
With the continued lockdown affecting large parts of the Australian economy, material inflows into yards have been hindered. Australian consumers are also buying at the current levels. Vaccination rates are improving daily, but COVID is certainly impacting on the economy in the short term. Meanwhile, the Reserve Bank of Australia is still holding to its plan of no rate rises this calendar year.
Shipping to traditional offshore markets has been hampered of late, with many merchants and consumers complaining either of a lack of availability, long lead times or significantly higher freight rates.