The nuclear crisis of Japan affecting the market for metals

• The incident of Fukushima as bad as the one of Chernobyl

The international markets for metals followed a downward trend yesterday, as they were negatively affected by the situation of Japan. After the country was hit by new earthquakes in the beginning of the week, the Japanese Nuclear Safety Agency yesterday raised the severity level of its nuclear incident of the Fukushima plant, putting it on a par with the one of Chernobyl (Ukraine), which took place in 1986. The level was raised from 5 to 7 on the scale of nuclear and radioactive incidents.

The evaluation reflects the initial severity of the crisis, not the current situation. According to specialists, the level of radiation decreased significantly, but a final evaluation will be announced by the International Atomic Energy Agency (IAEA).

Given the above, the price of copper with 3-month delivery fell 1% in the first half of April 12th, on the London Metal Exchange, reaching 9,753 dollars/metric ton. The price later reached 9,757 dollars ton. On the previous day, the price climbed to 9,944.75 dollars ton, the highest level since March 4th.

On the Comex New York, the price of copper with May delivery fell 1.5%, at 10:27 and reached 4.395 dollars pound (1 pound = approximately 500 grams), in line with the downward trend that began on Monday. On the Shanghai Futures Exchange, the price of copper with June delivery fell for the first time in the last five days: -1.4%, at 72,340 yuan (11,051 dollars)/ton.

Also yesterday, in London, the price of zinc fell 1.6%, to 2,505 dollars ton, the price of lead - 1.4%, to 2,816 dollars ton, whereas the price of aluminum -0.8% to 2,667 dollars ton. The price of nickel fell 1.4% to 27,330 dollars/ton, and tin fell 2.1%, to 32,601 dollars/ton, after reaching a record high of 33,600 dollars ton.

On the precious metals segment, the price of gold fell 1% at 10:27, on Comex New York, reaching 1,453.30 dollars ounce. The price of silver lost 0.8%, falling to 40.29 dollars ounce.

• The impact of the earthquake on the Japanese economy - greater than previously thought

The impact of the earthquake of March 11th on the Japanese economy will be greater than initially estimated, the Japanese Minister of the Economy and Fiscal Policy, Kaoru Yosano, said yesterday. The Tokyo official said: "The damage to the economy could be greater than we expected. Aside from the disruption of the supply chain, we have the serious situation of the nuclear plant".

As a result in the coming months, PM Naoto Kan may be forced to resort to issuing new bonds or to raising taxes, given the opposition of the central bank to finance spending.

Last month, the top officials of the central bank refrained from any discussion concerning new stimulus measures.

In March, the government of Tokyo estimated the damage of the earthquake and the tsunami at 25,000 billion yen (297.8 billion dollars), which caused several politicians to request the passing of a stimulus package of 20,000 billion yen (238.2 billion dollars).