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Industrial metals’ backdrop looks supportive, as governments try to revive economies with more stimulus. Inventories across metals are low, and easing supply issues will not be enough to replenish them. Still, deceleration in demand recovery and resuming mine operations should pave the way for a short-term correction, per ANZ Bank.

Key quotes

“Data highlight the ongoing recovery in industrial activity, keeping the backdrop supportive for industrial metals. We believe a seasonal slowdown in construction activity could limit the pace of recovery.”

“Base metal inventories are mixed, with zinc and aluminium rising while nickel is flat and copper lower. Falling copper TC/RC charges suggest tightness in the concentrate market. Demand indicators, including air conditioner sales, suggest the improvement in demand is continuing, although the pace remains subdued.” 

“A weakening spot premium signals easing in copper supply tightness. Mining operations are resuming in Latin American countries, this will see the supply backdrop improving in the coming months.”