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.
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Industrial Metals Update

Green transition to help charge cobalt prices

Cobalt prices have soared in 2021 to almost double the 2020 average price of $31,726 per tonne. We expect the growth in EV production and issues around supply to continue to push prices higher in 2022.

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Metals Data Response

Global Steel Production (Oct.)

Global steel production contracted again in y/y terms in October, mainly owing to lower Chinese production. China’s output may rebound a little in the coming months as power rationing has come to an end, but weaker domestic demand will act as a disincentive.

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October’s IAI data suggest the easing of power restrictions in China has enabled greater utilisation rates at smelters, driving the global increase in output this month. We think that aluminium output will remain high over the rest of this year, incentivised by the high price. However, we expect that the slowing of the Chinese construction sector will weigh on demand and prices in 2022.

22 November 2021
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