Metals

Commodities Update

China PMIs point to weaker metals demand

China’s July survey data suggest that manufacturing and construction activity have continued to cool, which supports our view that a slowdown in China will weigh heavily on industrial metals prices.

2 August 2021

Metals Data Response

Global Steel Production (Jun.)

Growth in global steel production remained in double digits in June, but this largely reflects the low base for comparison from last year. Meanwhile, government-imposed environmental controls in China weighed heavily on steel production there, and renewed efforts to clamp down on excess steelmaking capacity in recent weeks suggest it will fall further in the months ahead.

23 July 2021

Metals Data Response

Global Aluminium Production (Jun.)

Global aluminium output growth softened in June, largely due to power cuts in China’s key aluminium-producing province of Yunnan. But these curbs have started to be relaxed in recent weeks, which suggests that growth in global aluminium production will start to accelerate again before long.

20 July 2021

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20 hours ago

Commodities Update

China PMIs point to weaker metals demand

20 hours ago

Commodities Update

China PMIs point to weaker metals demand

Our view

Although we anticipate a strong global economic recovery in 2021, our forecast of a slowdown in China’s economy means that we still expect industrial metals prices to end the year lower. Meanwhile, we expect the prices of most precious metals to fall over the next few years as rising real yields in the US weigh on investment demand. This is particularly important for the gold price but will also weigh on the prices of silver and platinum.

Latest Outlook

Metals Outlook

Industrial metals prices to fall from current highs

Although we anticipate a strong global economic recovery in 2021, our forecast of a slowdown in China's economy means that we still expect industrial metals prices to end the year lower. At the same time, a stronger US dollar and rising US Treasury yields, in both real and nominal terms, will weigh on the prices of all metals, but particularly gold. Admittedly, we expect investor risk appetite to remain high and equity markets to do well, but a stronger dollar and higher yields should mean that investors' appetite for non-interest-bearing commodity assets will wane.

28 April 2021