Industrial Metals Update

Industrial Metals Update

Evergrande collapse would put a ceiling on prices

Although a messy collapse of Evergrande is a downside risk to our near-term price forecasts, it adds weight to our view that China’s construction sector is in structural decline. In turn, this underpins our view that industrial metals prices will be on the back foot until 2025 at least.

23 September 2021

Industrial Metals Update

Zinc set to lose its shine

After climbing to multi-year highs in May, the zinc price has stayed strong, with much less volatility than its counterparts. However, we feel weaker economic growth in China and US tapering of monetary policy will work in tandem with the ongoing recovery in supply to push prices lower by end-year.

6 September 2021

Industrial Metals Update

China aluminium output: how worried should we be?

Aluminium prices have recently been boosted by a series of supply outages in China. But unlike Chinese steel production, where declines have been driven largely by government policy which looks here to stay, we suspect that the falls in aluminium output will unwind before long.

1 September 2021
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Industrial Metals Update

Tide is turning against steel production in China

The government in China has stepped up measures to tackle pollution and excess capacity in the domestic steel sector over the past few months. This adds weight to our view that steel production, and consequently the price of iron ore, will fall back over the next couple of years.

Industrial Metals Update

Cooling Chinese growth to weigh on metal prices

China’s latest activity data are further evidence of a slowdown in its economy. This aligns with our view that industrial metals demand will soften in the year ahead, putting downward pressure on prices.

Industrial Metals 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.

Industrial Metals Update

Beginning of the end for copper rally

After reaching an all-time high in May, the price of copper has since come off the boil. And we think it will fall further over the next eighteen months or so, as a combination of weaker economic growth in China and a greater availability of both ore and scrap supply tips the refined market into a surplus.

Industrial Metals Update

Detailed China trade data highlight supply risks

The breakdown of China’s trade data for May shows that the recovery in imports of scrap and tin ore has hit a few stumbling blocks. Were these issues to persist, they could help to put a floor under prices even if, as we expect, the decline in demand for refined metal in China continues.

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