Research

Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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Base Metals

18 February 2020 Issue

  • Markets pause to adjust to Monday’s sell-off, but little has changed for the better

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    25 February 2020

    Consolidation across a broad section of markets is underway this morning, Tuesday February 25, while Monday’s sell-offs pause as markets adjust to lower prices, but little has changed for the better.

  • Markets focused on international spread of coronavirus, metals prices mainly weaker

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    24 February 2020

    Broader markets are seeing risk-off while they focus on the spread of the novel coronavirus (2019-nCoV) this morning, Monday February 24, after the number of cases and deaths escalated outside of China, especially in South Korea.

  • Metals mainly weaker after coronavirus concerns escalate again

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    21 February 2020

    The equity markets barometer suggests concerns over the economic impact of the novel coronavirus (2019-nCoV) have picked up again over the past 24 hours, with Asian equities weaker this morning, Friday February 21, as are most of the metals.

  • Markets focused on coronavirus developments, less so on impact to supply chains

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    20 February 2020

    Equity markets remain buoyant in Asia, but pre-market western equity indices have started to weaken, while metals are mixed this morning, Thursday February 20.

  • Markets recover after Tuesday’s broad dip; base metals prices mixed

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    19 February 2020

    After the broad-based dip on Tuesday February 18 that was partially triggered by Apple’s sales warning, markets have recovered on Wednesday with equity indices in Asia stronger, as are pre-market western equity indices.

  • 24 February 2020

  • 24 February 2020

    Broader markets are seeing risk-off while they focus on the spread of the novel coronavirus (2019-nCoV) this morning, Monday February 24, after the number of cases and deaths escalated outside of China, especially in South Korea.

  • Aluminium: Remaining under pressure

    18 February 2020

    Given the challenging macro backdrop and aluminium’s loose fundamentals, it is not surprising that the recent rebound momentum has been kept in check by technical resistance. In the short term, we expect LME prices to remain under pressure, but if key nearby resistance levels can be eroded with a further improvement in broad risk appetite, we would not be surprised to see a retest of $1,800 per tonne. We would be surprised to see anything higher than that until the coronavirus outbreak is seen to be under control.

  • Base metals investment analysis: Risk sentiment showing signs of recovery in China

    18 February 2020

    The Chinese government’s actions to contain the coronavirus and support the economy have been boosting investor conviction to remain long China-exposed risk assets, including the base metals.

  • Copper: Price recovery to persist in near term

    18 February 2020

    Copper has experienced a decent rebound since the start of February. Yet, the positive impact of the recovery in China’s risk sentiment driven by easing financial conditions is partly offset by the marked deterioration in refined demand conditions caused by the coronavirus outbreak. However, we believe that investors will continue to shrug off weak fundamental signals in the near term, holding the view that macro sentiment is presently the chief driver of prices.

  • Demand Indicators: 18 February 2020

    18 February 2020

    Demand indicators for the base metals market

  • Downloadable Base Metals Weekly Data February 18 2020

    18 February 2020

    Downloadable data for week February 18 2020.

  • Lead: Larger 2020 surplus after China revisions

    18 February 2020

    Lead prices managed to rebound somewhat last week in line with the stronger tone from other base metals. We expect extremely weak vehicle sales in China in Q1 to hit demand for lead, and we have revised our forecasts lower accordingly. But Chinese smelters are suspending some production too, so we have also lowered our supply outlook. Overall though, the global surplus we forecast for 2020 has expanded by about 50%. Lead prices are already reflecting this softer fundamental backdrop. We would not rule out further price weakness as the virus’s toll on demand becomes clearer.

  • Market Summary: Fragile risk recovery

    18 February 2020

    Risk sentiment seems to be improving as the Chinese government tackles the coronavirus and its impact on the economy. But we are wary about getting too comfortable with the recent price rebounds as there is still much uncertainty.

  • Nickel: Trying to consolidate at $13,000 per tonne

    18 February 2020

    Nickel has been consolidating around $13,000 per tonne after the recent volatility. But our technical analysis points to the risk of this consolidation being a bear flag. This could potentially open the door to a fresh sell-off to new 2020 lows in the coming days, especially as LME stocks keep accumulating and the latest reading for Chinese EV sales was desperately poor. There are caveats to both of these stories though, and maybe that is what is helping to keep nickel prices range bound for now.

  • Technical analysis: Mixed messages

    18 February 2020

    Generally the base metals are in consolidation mode after the recent volatility. At the moment, that consolidation process comes with an upside bias for some, but downside risks for others.

  • Tin: Macro sentiment is key

    18 February 2020

    The rebound in the LME tin price since the start of February remains fragile because there is no fundamental support as a result of the coronavirus outbreak. Encouragingly, we find that tin, like most other base metals, is increasingly more driven by macro sentiment than fundamental factors at the moment. Given the dovish stance adopted by the PBOC to tackle the coronavirus’ toll on economic growth, risk sentiment has rebounded, which should drive the LME tin price higher in the near term.

  • Zinc: Still a balanced market in 2020

    18 February 2020

    Accounting for the impact of the coronavirus outbreak on the Chinese zinc industry, we have revised down our H1 2020 supply and demand forecasts this week, but nudged up H2 slightly. Ultimately we are still projecting an essentially balanced global refined zinc market this year.