Base Metals Price Outlook Economic Forecast

Base Metals Price Outlook

Production sets the pace

The third quarter has seen base metal prices diverge, driven mainly by supply-side considerations. Lead, nickel, tin and zinc are widely recognized as having the most challenging supply outlooks, having outperformed the sector. Aluminium and its alloys, copper and iron ore have been the worst performers, driven by oversupplied markets.

Aluminium—like steel—is outperforming as the metal continues to struggle with China’s industrial overcapacity. Expectations of capacity closures are fading as the year ends, with production picking up strongly in Q3. In fact, the pace of restart production in the Chinese aluminium industry is likely to be quickening in the second half of the year. For copper, production has increased steadily, with global mine output registering an increase of 4.5% in H1 2016 from the same period last year. This growth has been dominated by Peru. Several projects that were commissioned this year have increased the country’s output by nearly 55% annually in the same period. Excluding Peru, key producers such as Chile and China have experienced weak growth. Meanwhile, adherence to strict new environmental laws in the Philippines is putting nearly a quarter of the world’s nickel mine supply—and the only major supplier to China—at risk.

Although base metal prices remain sluggish, analysts expect prices to increase in the final quarter of 2016. Analysts see base metals prices increasing 5.5% in Q4 2016 over the same quarter last year (previous month’s forecast: +4.9% year-on-year), which, if confirmed, will represent 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  

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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