Japanese earthquake sends tremor through metal market

摘要

The metal markets had difficulty in finding a positive angle to the earthquake in Japan that destroyed Kobe. Normally, the commodity markets are very good at picking the silver lining out of any cloud. But the Kobe region was very heavily industrialised, so the lost demand for metal inputs was likely to outweigh the increased demand due to reconstruction, at least in the short term. Initial estimates were talking of a quarter or a half percent drop in Japan's gross domestic product for the current quarter because of the tremor. But a warning from the Federal Reserve (US central bank) vice chairman Alan Blinder about strong economic growth in the US, which was taken as a sign of possible higher dollar interest rates to come, may have pushed US investment funds towards the metal markets.