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Metals

Metals Data Response

Global Steel Production (May)

Global steel production continued to pick up in May, led by higher output in India and China, which more than offset the ongoing decline in Europe’s production. The rise in input costs, efforts to curb carbon emissions and softer demand suggest that there will be only limited gains in global steel output this year.

22 June 2022

Latin America Economics Update

The Codelco strike threat, Chile and the copper price

A threatened strike at Chile’s copper giant, Codelco, could knock as much as 0.3%-pts off quarterly GDP growth for every week that workers are on strike and worsen the country’s balance of payments strains. What’s more, it may not even be enough to give a lift to the copper price given subdued global demand. In view of the wider interest, we are also sending this Latin America Update to clients of our Metals Service.

21 June 2022

Metals Data Response

Global Aluminium Production (May)

Global aluminium production has increased steadily since the start of the year in large part owing to a rebound in China’s output. At the same time, demand is relatively subdued, which suggests that aluminium prices have further to fall in the second half of the year. Markets Drop-In (22nd June, 10:00 ET/15:00 BST): Join our Markets team for this special briefing on the outlook for equities, bonds and FX and a discussion about revisions to our forecasts. Register now

20 June 2022

Our view

Metals prices have fallen back in the last month or so on concerns about China’s demand. Even without the slump in economic activity associated with the country’s zero-COVID policy, China’s economy has been slowing. We think any stimulus will only put a floor under demand. We also expect weaker economic growth in other key metal-consuming regions such as the US and Europe, which supports our view that metal demand growth will be subdued this year. Supply is expected to remain constrained because of historically high energy prices, but we expect production in China to rise this year. Taking this all together, we expect metal prices to fall from current levels by the end of the year but to remain historically high.

Latest Outlook

Metals Outlook

Prices to succumb to weaker demand before long

Soaring energy prices have given a renewed boost to industrial metals prices in recent months but, if we are right, and power costs ease back from April, we think prices will fall sharply later in 2022. After all, demand for metal from key consumer China has already fallen a long way and is likely to remain subdued throughout the rest of the year, particularly in the metals-intensive construction sector. Meanwhile, tensions between Russia and Ukraine have been stoking self-haven demand for precious metals. However, assuming there are no-long lasting repercussions, we think prices will fall as rising US real yields will curb investment demand and result in a somewhat stronger US dollar.

27 January 2022