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Nickel market set to remain oversupplied

We believe that current high nickel prices will prove short lived, and expect weaker economic growth in China and the tapering of US monetary policy support to depress demand for nickel and pull down its price by the end of the year.
Luke Nickels Commodities Economist
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Metals Data Response

Global Steel Production (Apr.)

Global steel production fell in y/y terms in April, as all major producers bar India recorded declines. High energy costs and soft demand for steel are both likely to persist for much of the remainder of this year, hindering any large upticks in production. In China, producers will also be under pressure to meet state emission targets.

24 May 2022

Metals Data Response

Global Aluminium Production (Apr.)

After a weak start to the year, it looks increasingly as though a rebound in China’s output will more than offset lower production in Russia and Europe so that global production will rise a touch this year. That said, supply in the world ex China will remain constrained, even assuming higher exports from China.

20 May 2022

Industrial Metals Update

Weaker demand to enable stocks to build

Exchange stocks of base metals have fallen so far this year as high power costs have choked the supply of refined metals. Yet, we expect stocks to build as a weaker economic outlook for key metal consuming regions will weigh on demand, and easing energy prices should enable supply to recover slightly.

13 May 2022

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Commodities 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

Metals Data Response

Global Aluminium Production (Aug.)

August’s IAI data suggest that fears that power rationing in Chinese smelting hubs would negatively impact supply, which have boosted aluminium prices to decade highs, are overdone. Instead, we think that any fall in supply will be compensated by weaker demand, causing prices to fall by end-2021.

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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
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