Copper supply set for further improvements

Copper prices have soared since mid-2020 as demand raced ahead of supply. However, a strong supply response is now underway which, in tandem with cooling copper demand, will weigh on prices into 2022.
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Industrial Metals Update

Slower growth in China to drag on prices in 2022

While high power prices and low stocks will support prices in the near term, we think that prices will pull back in the second half of 2022 as Chinese economic activity slows further and supply improves. Drop-In: Neil Shearing will host an online panel of our senior economists to answer your questions and update on macro and markets this Thursday, 13th January (11:00 ET/16:00 GMT). Register for the latest on everything from Omicron to the Fed to our key calls for 2022. Registration here.

13 January 2022

Metals Data Response

Global Steel Production (Nov.)

Global steel production contracted in y/y terms in November, mainly owing to depressed output in China. Although China’s power rationing came to an end last month, there are no signs of an upturn in steel supply. Given our expectation that construction-related steel demand will remain subdued, a sustained rebound in China’s steel production appears unlikely in the coming months.

22 December 2021

Industrial Metals Update

Drawdown in stocks to reverse in 2022

Exchange stocks of base metals have fallen this year, as supply was interrupted by power rationing in China as well as the ongoing effects of COVID-19. However, now that power restrictions have been lifted, and with Chinese construction activity continuing to weaken, we expect stocks to start to build which should weigh on prices in the coming year.

21 December 2021

More from Luke Nickels

Industrial Metals Update

Zinc supply shock as power prices rise

The recent highs in the zinc price have been driven by fears around supply as sky-rocketing energy prices have undermined smelter profitability. We expect power prices to remain high in the coming months which should constrain zinc supply and boost prices. However, as we move into 2022, we expect zinc supply to return as power prices fall and China’s economy continues to slow.

26 October 2021

Metals Data Response

Global Aluminium Production (Sep.)

Slower growth in aluminium output in September was probably linked to surging power prices. The combination of constrained output and soaring production costs will support aluminium prices in the near term and we have raised our end-2021 aluminium price forecast.

20 October 2021

Industrial Metals Update

Pulling the plug; power rationing in China

Power rationing in China has raised concerns about metal supply. But perhaps less obvious is that power rationing will also negatively affect demand if manufacturing activity is curtailed. On balance, we think that the supply impact will dominate and support prices in the coming months, but we expect prices to fall back in 2022 as economic activity, particularly construction, in China continues to slow.

19 October 2021
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