Metals price outlook 2020
Metals prices will rise in coming months so now is a good time to lock in. However, while the buyer's market is winding down, we do not expect a seller's market. As producers adjust output to consumption, metals will be more balanced in 2020.
We see steel prices are at or past bottom, so lock in as soon as possible as prices have turned upwards in the United States and China. Europe and India are at bottom and hikes will begin by January, or February at the very latest. Aluminum and copper are following their own markets, but generally tell the same story. The good news for buyers is that increases in 2020 will be mild and generally slow.
Supply will remain ample, although surplus conditions are moving toward balance. The largest upside price risk is the regular weather risk for December-April from Australian cyclones. This year they would do greater than normal damage. Cyclones have occurred four of the past eleven years.
Almost all other risk is to the downside:
- Economic weakness is more likely than strength
- Production cuts are assumed but not certain
- Fundamentals say iron ore should be closer to $60 than to $100
Will it stay a buyers market through 2020? John Mothersole and I sat down to discuss this and the metals supply chain for 2020. Come listen to our latest podcast to learn more.
- Country Risk Month Ahead: April 2020
- Ethiopia highlights challenges for African countries in coping with COVID-19
- Weekly Pricing Pulse: Another week of broad-based declines in commodities prices
- US states to endure the deepest COVID-19 related near-term declines
- Capital Markets Weekly: Emerging markets increasingly rely on official lenders
- COVID-19 recession to be deeper than that of 2008-2009
- Capital Markets Weekly: Risk of multiple emerging-market defaults increasing
- Weekly Pricing Pulse: Commodities sell off as the shut-downs continue
great coverage of the research coming from our US regional team. https://t.co/2OaQQZSrcJ
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