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Strategists at ANZ Bank analyze the outlook for the base metals sector and are slightly optimistic.

Key quotes

“The pandemic’s spread outside China and a slow restart of industrial activities inside China will subdue demand for industrial metals in Q2 2020 while rising mine disruptions could be an offsetting factor.”  

“We believe production cost is a reasonable guide to the price floor, but this is falling due to lower oil prices.” 

“Copper prices have never traded below the 90th percentile of production costs. So, we see the downside protected near USD4,000/t.”