Insights

MARKET INSIGHTS

  • Metals Industry Facing Rise in Resource Nationalism
    Resource nationalism is the inclination of governments to seek greater control or revenue from natural resources in their territory. This is on the rise due to economic, nationalistic, and strategic factors amplified by the global pandemic. Punitive taxes, royalties, or other actions would likely hit mine project investment, but could also trigger top importing countries to invest more … Read More
  • China in Struggle to Curb Commodity Price Appreciation
    China policymakers have taken strong verbal action to tackle inflationary risks from surging commodity prices. This has moderated bullish speculative enthusiasm for metals, but could be short-lived; China lacks meaningful options to temper any further global surge in commodity prices without jeopardising other policy priorities. Commodity Price Surge Drives Inflationary Pressures The continuing surge in global commodity prices … Read More
  • Lead Playing Catch-Up Amid Pandemic-Era Underperformance
    The LME lead price rebounded strongly from March lows. Macro-led fund interest in commodities and lead’s relative cheapness underpinned gains. The rise is at odds with the metal’s weak fundamental narrative, which will likely continue to weigh on its relative price performance versus the rest of the base metals complex. Lead Price Makes Recent Comeback Throughout the global … Read More
  • Copper Hits All-Time High As Demand Focus Shifts From China
    The LME copper price has surpassed the all-time high of $10,190 from 2011. Reflation-led investor interest in commodities continues to drive the bull-market uptrend. This is in addition to copper-specific projections that mine supply growth may struggle to meet potential demand from the global energy transition. Slowing physical interest in China has done little to temper gains as … Read More
  • MSC Woes To Exacerbate Ex-China Tin Shortage
    News of severe tin production disruption at Malaysia Smelting Corporation (MSC) that could last beyond the end of 2021 has helped reignite the tin price rally and tighten nearby LME spreads. While there is a lack of clarity on the potential impact on output, the news comes as yet another blow to an ex-China tin market struggling with … Read More
  • How Has Global Shipping Disruption Impacted Metal Markets?
    Since the onset of the pandemic, an acute shortage of global container freight capacity has seen shipping costs and delays surge to unprecedented levels. Causing this was an unexpected surge in demand for consumer goods, stranded containers from asymmetry in trade flows, and port delays. Disruption has impacted base metal markets by exacerbating tight supply of concentrate, driving … Read More
  • What Does Rising Inflation Mean For Base Metal Prices?
    The global reflation trade continues to buoy prices and physical demand for base metals, which have rallied strongly alongside other risk assets over the last year. As key economies continue their stimulus-led rebound in Q2 and inflation picks up, this should continue to drive the metals bull market. However, investors will be alert to any signs of policymaker … Read More
  • Will Consumers Pay More For Low-Carbon Aluminium?
    Pressure from society, industrial consumers and governments to cut CO2 emissions from aluminium production is imposing costs on producers. Whether this cost is absorbed by governments or passed on to industrial consumers through higher premiums or underlying aluminium prices is subject to significant policy uncertainty. Background The global aluminium industry emits 1.1 bn tonnes of CO2 annually, ~2% … Read More
  • Bets Tempered For Future Battery-Grade Nickel Shortage
    In early March nickel prices retreated by ~20% from February highs. The sharp move came after China steel giant and top nickel producer Tsingshan announced plans to produce a precursor to battery-grade nickel from nickel pig iron (NPI). This dampened investor expectations for a future shortage of Class 1 nickel from strong forecast growth in electric vehicle (EV) … Read More
  • China Aluminium Output Growth Faces Climate Obstacles
    Strong growth in China aluminium smelting capacity and primary output over the last year have weighed on aluminium market sentiment and kept the global market in surplus. However, fresh determination in China to clamp-down on energy-intensive and high-carbon industries threaten approvals for new projects and expectations for continued supply growth in 2021 and the years ahead.   Recent … Read More
  • How Robust is Copper’s Bull Market Narrative?
    Copper’s relentless rally from March 2020 lows has seen prices rise by almost 50% from pre-pandemic levels to almost $9,500. The rally accelerated in February amid bullish forecasts from banks including Goldman Sachs, who expect prices to hit record highs of $10,500 within the next 12-months. Deficit expectations, low visible inventories, long-term demand hopes and record global stimulus … Read More
  • Tin Under Pressure After Stunning Start to 2021
    The LME 3-Month tin price gained up to 35% in early 2021 amid unprecedented global physical supply tightness. Nearby spreads hit extreme backwardations amid low global inventories. However, prices eased sharply in recent days amid aggressive selling; Investors fear an easing of metal shortages in the coming months, with LME inventories rising from lows. Prices may come under … Read More
  • China Metal Demand Primed To Bounce Back From Holiday Lull
    China’s New Year Holiday will officially take place from 11th-17th February this year. We expect a seasonal slowdown in China industrial activity and strong metal inventory growth in February. However, a strong rebound in downstream activity is likely in the following months amid supportive fundamental drivers. China policy tapering remains a headwind for investor risk appetite but is … Read More