Base Metals Price Outlook Economic Forecast

Base Metals Price Outlook

China-U.S. trade tensions lead prices to decline

Prices for base metals logged their worst performance in over two years in March amid fears that the ongoing trade war between China and the United States could derail the current stellar global economic growth. Base metals declined 3.4% month-on-month, contrasting February’s mild 0.9% increase.

Prices for base metals struggled in March on the back of concerns about the impact on global economic growth of the trade rift between China and the U.S. Iron ore, a key input for steel, was particularly hit by Trump’s announcement to impose tariffs on steel and aluminium imports on 1 March. Aluminium prices were also sharply down as reduced U.S. imports for the metal are expected to increase global oversupply and lower non-U.S. prices. Almost all the remaining base metal prices tracked by FocusEconomics were down in March, reflecting a potential slowdown in China due to the trade dispute with the U.S. Half of most metals that are used in industrial processes are consumed by China. On the flip side, U.S. steel prices soared in March; reduced global imports for the metal will tighten the domestic steel market.

Analysts polled by FocusEconomics still see increasing base metal prices in 2018 and 2019 amid signs that China and the United States are willing to negotiate to end trade disputes. Analysts foresee base metal prices rising 2.0% in Q4 2018 from the same quarter in 2017. Base metal prices should lose some steam in 2019, with a year-on-year expansion of 1.9% penciled in for 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  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).
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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