Base Metals Price Outlook Economic Forecast

Base Metals Price Outlook

Trade disputes and a slowing Chinese economy take their toll on base metal prices

Prices for base metals fell at the fastest pace in over eight years in July on the back of rising trade barriers, especially between China and the United States, and the cooling of the Chinese economy, which consumes around half of the world’s base metals. Base metal prices plunged 9.2% month-on-month in July, contrasting June’s 1.6% increase. While the decrease was broad-based, steel prices in the United States continued to rise as the implementation of tariffs on steel imports is boosting domestic prices.

The decline in prices of some key commodities, including lead, nickel and zinc, reflected escalating global trade tensions, particularly following the introduction of a 25% tariff on USD 68 billion in bilateral trade between China and United States. The subsequent war of words between the two global powers, which included the U.S. threat to impose tariffs on all Chinese imports and China’s threat of using trade barriers other than tariffs, added more fuel to the fire. Moreover, recent data suggesting that China’s economic growth is slowing put extra downward pressure on base metal prices.

Growth in base metal prices will moderate sharply this year, mostly reflecting global demand concerns and trade war fears. Base metal prices are expected to increase 3.8% year-on-year in Q4 2018 before softening to a 1.4% year-on-year rise in Q4 2019.     

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Base Metals Historical Price Data

2012  2013  2014  2015  2016  
Aluminium2020.88  1845.86  1867.48  1663.69  1604.6  
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  11835.3  9596.5  
Lead2062.45  
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  522.94636015326  
Steel (Europe)659.47  614.28  568.37  420.18  455.2647684751  

Note:
Aluminium 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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