Base Metals Price Outlook Economic Forecast

Base Metals Price Outlook

China will slow demand

Base metal prices rose in Q3, marking a second consecutive quarterly gain, following six consecutive quarters of decline. Prices continued to rebound from the record lows recorded in the first quarter due to supply constraints, increasing demand and a gradual decline in inventories. Prices for iron ore, nickel, lead, tin and zinc have outperformed other metals as a result of substantial supply shortfalls, while the two largest consumed metals—aluminium and copper—have recorded only modest gains. Zinc is the base metal that has seen the strongest gains this year, totaling more than 50% since January due to ongoing supply tightness from mine closures and voluntary production cuts and strong demand from China, particularly in the steel-producing sector. Meanwhile, high nickel prices continue to receive support from the Philippine government’s suspension of mines for environmental violations.

China’s efforts to boost its infrastructure and construction sectors have been the main driver of demand for base metals this year. It accounted for over 50% of global base metal consumption in 2015. However, China’s transition to a consumption-led economy, together with industrial reform and environmental concerns, is likely to slow demand for raw materials and keep prices sluggish in the coming years. Analysts see base metal prices increasing 6.6% in Q4 2016 from the same quarter last year (previous month’s forecast: +4.9% year-on-year), which, if confirmed, will mark a rebound compared to the 28.7% decline registered in Q4 2015.

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Base Metals Historical Price Data

2011  2012  2013  2014  2015  
Aluminium2400.89  2020.88  1845.86  1867.48  1663.69  
Aluminium Alloy2268.65  1935.97  1797.84  1950.43  1720.53  
Alumina470.91  428.85  426.7  425.4  394.1  
Copper8820.11  7954.23  7330.44  6863.26  5508.57  
Nickel22873.86  17522.38  15022.53  16897.92  11834.73  
Lead2398.09  2062.45  2139.23  2095  1787.3  
Zinc2192.79  1948.16  1910.09  2162.01  1929.03  
Tin26005.64  21099.76  22272.66  21878.75  16053.44  
Iron Ore140.7  131.83  136.58  97.34  55.82  
Steel (USA)745.89  656.57  630.49  657.79  462.25  
Steel (Europe)776.74  659.47  614.28  568.37  420.18  

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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