Japan accounts for around 5pct of global copper consumption

Balkans reported that Toyota Motor Corporation would suspend operations at all of its 12 factories in Japan to confirm the safety of its employees.

A trader in Singapore said that in the short term, the consequences for metals will be bearish. The damage to factories, the problems they will have with energy supply all threaten demand. But the longer term reconstruction is a different matter. Reconstruction, especially of the electricity infrastructure will consume huge amounts of copper aluminum and galvanized steel. The scenario we had expected of slowing prices in the second half may need to be revised.

Traders said that gold prices ended higher to close just below USD 1,420 an ounce but held short of recent record highs above USD 1,440. The moves in bullion would be more the result of swings in currencies than any direct impact from the quake.

The Singapore trader said that currency flows will drive gold. After the initial sell down in the yen it turned positive. I think there is an expectation that Japanese industry will need to repatriate funds in order to cover cost of damage. Tokyo will probably need to borrow more, too, which should help keep the yen high. That will depress the currency basket and underpin gold.

(Sourced from Balkans.com)