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Strategists at ABN Amro see that the global recovery is becoming more and more widely supported. Demand for metals is increasing and sentiment on industrial metal markets remains optimistic. Despite still high downward risks, these conditions will bring support for metal prices in 2021. 

See – Oil: The risk of a downward correction is substantial – ABN Amro

Key quotes

“The copper price continues to break record after record. The list of reasons for the higher prices is long. The weaker dollar, a shortage of copper, the global economic recovery, the start of widescale vaccinations, the continued growth of Chinese industrial activity and supply constraints from Chilean mines. This provides a lot of confidence. As a result, total long positions are high, but this also brings a downside price risk because it increases the likelihood of profit-taking by speculators. The copper price will rise further in 2021 but in a lower gear.” 

“The order books for aluminium sheets are solidly filled for the first quarter of 2021. This will keeps prices relatively high in 2021. Still, when Chinese stimulus spending stops, a downward price risk will emerge and China will become a net exporter again.”

“Demand for steel-intensive consumer goods, such as cars and white goods, is currently strong in several markets. Market sentiment is positive and activity is improving at a better-than-expected rate. As a result, supply is struggling to keep up with the rapid recovery in demand, resulting in price increases. The increased costs of making steel are also contributing to higher steel prices. This year, steel prices will remain relatively high.”

“Demand for good quality iron ore remains high worldwide. Price risks come mainly from the supply side. In any case, the current high price is an invitation for mining companies to produce more. A recovery in supply will bring a reduction in price in the course of the year. But on balance, the price of iron ore will remain relatively high this year.”