Base Metals Price Outlook Economic Forecast

Base Metals Price Outlook

Bullish sentiment persists for base metals

Panelists remain optimistic about the outlook for base metal prices. Following a strong rebound in Q4 2016, the increase in base metal prices is seeing accelerating during the first half of this year and moderating toward the end of the year. Commodities experts project the prices of base metals to increase 2.2% annually in Q4 2017. The price performance reflects higher prices for copper, lead, nickel and zinc, which will offset a weak increase in prices of aluminium and a decline in prices of iron ore and tin. Regarding steel, U.S. prices are projected to rise strongly in Q4 reflecting positive sentiment, while prices in the European market are expected to drop.

In recent weeks, base metal prices have corrected lower, settling in a more consolidated position. This mainly looks like a bout of anxious profit-taking in response to the strengthening of the U.S. dollar, ahead of the upcoming U.S. Federal Reserve meeting and also due to a somewhat disappointing speech from President Trump in Congress. That said, the latest U.S. manufacturing PMI data for February was strong, as was Chinese foreign trade data. These results suggest that economic activity in the world’s two largest economies remains healthy, which bodes well for base metal demand. As such, most panelists remain optimistic about the outlook.

Positive prospects for the base metal complex are the result of the rebalancing in most markets. The rebalancing reflects slowing investment, mine closures—major work stoppages in Chile and Indonesia will cause a substantial supply copper deficit—environmental constraints and policy developments, particularly in China. But, China’s transition to a consumption-led economy from one based on investment and exports, together with its industrial reform and environmental concerns, is likely to slow demand for metals and keep prices more sluggish toward the end of this year.

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Base Metals Historical Price Data

2012  2013  2014  2015  2016  
Aluminium2020.88  1845.86  1867.48  1663.69  1604.6  
Aluminium Alloy1935.97  1797.84  1950.43  1720.53  1553.26  
Alumina433.69  426.39  421.3  387.42  320.71  
Copper7954.23  7330.44  6863.26  5508.57  4871.3  
Nickel17522.38  15022.53  16897.92  11834.73  9596.5  
Lead2062.45  2139.23  2095  1787.3  1866.99  
Zinc1948.16  1910.09  2162.01  1929.03  2092.83  
Tin21099.76  22272.66  21878.75  16053.44  17960.96  
Iron Ore131.83  136.58  97.34  55.82  58.61  
Steel (USA)656.57  630.49  657.79  462.25  517.96  
Steel (Europe)659.47  614.28  568.37  420.18  439.66  

Note:
Aluminium prices in USD per metric ton (mt).
Alluminum Alloy prices in USD per metric ton (mt).
Alumina prices in USD per metric ton (mt).
Copper prices in USD per metric ton (mt).
Nickel prices in USD per metric ton (mt).
Lead prices in USD per metric ton (mt).
Zinc prices in USD per metric ton (mt).
Tin prices in USD per metric ton (mt).
Iron ore prices in USD per metric ton (mt).
Steel (USA) prices in USD per metric ton (mt).
Steel (Europe) prices in USD per metric ton (mt).
All prices are average of period (aop).

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Price forecasts and historical data for Energy, Metals and Agricultural Commodities

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