Industrial commodities prices posted strong gains this week on the back of signs of a relaxation of quarantine measures in Europe and the US, which fuelled hopes that demand would recover soon. However, we maintain that most markets are still oversupplied, and that consumption will be slow to return to pre-virus levels. As a result, we expect prices to only embark on a sustainable rebound later this year as economic activity gains momentum. Turning to next week, investors will continue to watch for signs that the global economy is over the worst. China’s April spending and activity data (Friday) will give an indication of how the economy fared as virus containment measures were lifted. There are early signs that infrastructure-related construction picked up strongly which may give a lift to industrial metals prices.
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