The downturn on the industrial metals markets continues
by David Fleschen
At the moment, the copper price has fallen well below the USD 8,000 per tonne mark and was only quoted at about USD 500 above the levels of the beginning of November, i.e. shortly before the first easing of the corona restrictions in China. According to the Chinese information service Antaike, the price could even fall to USD 7,000 in the medium term. Even if we cannot rule out such a price collapse, we would at least consider it more than exaggerated. The recovery of the Chinese economy may already be losing momentum, but growth is still likely to improve significantly compared to last year.
In this respect, a price level even below last year's lows does not seem very justified. Although the economies in Europe and the USA may cool down noticeably in the coming quarters and thus create headwinds, the Chinese market is and remains the far more important one for the industrial metals and should therefore set the direction. This view is shared by two leading mining companies from Australia and Canada, which see the current price weakness as temporary and are optimistic for the second half of the year in view of an increase in demand from China.
Source: Commerzbank Research, Photo: Fotolia