Base Metals Price Outlook Economic Forecast

Base Metals Price Outlook

Prices continue to recover in May

Prices for base metals continued to recover in May following a plunge in March, which reflected concerns about an increase in trade disputes globally. Prices for base metals rose 0.4% month-on-month in May, following April’s 1.9% increase.

Base metal prices increased in May on the back of the ongoing Rusal saga, which boosted aluminium and alumina prices. The Russian company and its owner, billionaire Oleg Deripaska, were targeted in April by the U.S. administration because of their close ties to Russian President Vladimir Putin. Sanctions against Rusal fueled concerns over aluminium and alumina supply. That said, the situation entered a calmer phase following the resignation of Deripaska and around half of Rusal’s board on 25 May. Now Deripaska has until 23 October to wind down business with Rusal to avoid U.S. sanctions. Going forward, the price of the two commodities will largely fluctuate in parallel with political developments.

Meanwhile, steel prices continued to see diverging trends. U.S. steel prices edged even higher in May, as the implementation of tariffs on steel imports is expected to boost domestic prices. Conversely, in Europe, steel prices continued to fall due to concerns of oversupply. The United States decided to extend tariffs on steel and aluminium imports to Canada, the European Union and Mexico, effective 1 July. For now, the impact of the retaliatory measures approved by the three countries against the United States is expected to be limited, but a further escalation could lead to an open trade war. 

Slightly lower global growth, especially in China and the European Union, will trim demand for base metals, and most base metals markets will remain adequately supplied. Therefore, prices for a majority of commodities are seen declining this year compared to the high levels observed in 2017. That said, higher steel prices in the U.S., along with strong demand for nickel and tin, should shore up base metal prices this year. Analysts foresee prices rising 3.1% in Q4 2018 from the same quarter in 2017. Base metal prices are seen expanding 1.4% year-on-year in Q4 2019.

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Base Metals Historical Price Data

2012  2012  2013  2014  2015  
Aluminium2020.88  2020.88  1845.86  1867.48  1663.69  
Alumina433.69  433.69  426.39  421.3  387.42  
Copper7954.23  7954.23  7330.44  6863.26  5508.57  
Nickel17522.38  17522.38  15022.53  16897.92  11835.3  
Lead2062.45  2062.45  
Zinc1948.16  1948.16  1910.09  2162.01  2162.01  
Tin21099.76  21099.76  22272.66  21878.75  16053.44  
Iron Ore131.83  131.83  136.58  97.34  55.82  
Steel (USA)656.57  656.57  630.49  657.79  462.25  
Steel (Europe)659.47  659.47  614.28  568.37  420.18  

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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