Base Metals Price Outlook Economic Forecast

Base Metals Price Outlook

Economic stimulus in China propels base metal prices in October

Base metal prices increased on a monthly basis for the first time in four months, mostly reflecting Chinese authorities’ efforts to shore up economic growth. Prices for base metals rose 1.7% over the previous month in October, contrasting September’s 1.7% month-on-month drop.

Developments in China, which consumes nearly half of all global base metals, continued to lead the evolution of base metal prices in October. Overall, news that China will spur infrastructure investment in order to cushion the economy against the negative effects of the ongoing trade war with the United States supported base metal prices in October. Price gains for iron ore, zinc and, to a lesser extent, copper were especially significant. That said, China’s official manufacturing Purchasing Managers’ Index (PMI) for October inched down to the lowest level in over two years, highlighting that, despite the government’s efforts, the world’s second-largest economy is losing steam, which does not bode well for most base metal prices further down the road.

Despite October’s increase, an uncertain global economic outlook, especially regarding the health of China’s economy, are weighing on base metal prices this year. Our panel of analysts see base metal prices falling 3.1% year-on-year in Q4 2018 (previous edition: -2.7% yoy). Next year, however, negative spillovers from the trade spat between China and the United States should start to fade. Against this backdrop, Met the why particular panelists expect base metal prices to expand 3.8% year-on-year 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  1911.09  2162.01  1929.03  2092.83  
Tin21199.76  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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