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Supply closures in metal markets are buoying sentiment. However, they will still offset the hit to demand, opening up risks of another selloff, per ANZ Bank.

Key quotes

“Sentiment in the base metals sector is rising on signs of the pandemic easing. However, the market has been getting excited about the growing list of mine closures around the world.”

“Lockdown measures in key mining regions, such as South America, are being joined by price-induced closures in Africa. Glencore will close its Mopani copper mine in Zambia due to low prices.” 

“We see these supply-side disruptions doing little to offset the amount of demand lost due to the weakening economic backdrop.”