Metals still staring into the abyss

Industrial metals prices plummeted in March. And with the virus-related disruption outside of China yet to peak, we suspect that prices will fall further over the coming months. Even if containment measures are eased from the second half of the year (as we assume), and demand starts to revive, stocks of metal built up over the next few months will weigh on any recovery in prices. Consequently, we forecast that industrial metals prices will end the year far below where they began. On the other hand, the huge uncertainty still facing the global economy is likely to benefit the price of gold.
Kieran Clancy Assistant Commodities Economist
Continue reading

More from Metals

Metals Chart Book

Strong month for metals not a sign of things to come

May was a strong month for the prices of most metals, but we suspect that this may be as good as it gets. After all, if we’re right in expecting economic growth in China to slow in the second half of this year, the prices of most industrial metals are likely to end the year lower. Meanwhile, the recent rise in the gold price has been far larger than is implied by the fall in real yields, and we think that the gold price will come under renewed downward pressure in the months ahead as real yields start to creep higher.

3 June 2021

Industrial Metals Update

Calling time on the rally in US steel prices

Limited domestic supply, expensive imports and strong growth in demand have fuelled the rally in US steel prices. But with supply set to improve, at a time of softer growth in demand, prices should fall.

26 May 2021

Industrial Metals Update

Fundamentals, not regulation, to drive iron ore lower

While China’s announcement that it will crack down on speculation and market irregularities has taken some of the froth out of the iron ore market in recent weeks, we think the price of iron ore will ultimately be driven even lower by less favourable fundamentals over the rest of the year.

26 May 2021

More from Kieran Clancy

Energy Update

Restocking boost to LNG prices to fade soon

After rising (and falling) sharply at the start of the year, Asia LNG prices have started to push higher again recently. This latest rise seems to have been driven by a rebuilding of stocks, which should run its course over the coming months. That said, the outlook for spot Asia LNG prices further ahead remains bright.

9 June 2021

Energy Data Response

US Weekly Petroleum Status Report

US commercial crude stocks declined for the fifth week in a row, owing to the robust economic recovery and a further increase in inputs to refineries. With demand set to rise further, and few signs of a rebound in domestic production, crude stocks should continue to fall in the weeks ahead.

3 June 2021

Energy Data Response

US Weekly Petroleum Status Report

Last week’s decline in US crude stocks adds to evidence that the oil market is getting tighter. This supports our view that oil prices have further to rise in the months ahead, before higher OPEC+ supply brings the market closer to balance and sends prices lower.

26 May 2021
↑ Back to top