Monthly Metals Strategy


T he US Federal Reserve (Fed)'s surprise decision to delay tapering of asset purchases (QE3) has improved the short-term outlook for most commodity prices, including industrial metals.

  • Looking into 2014 though, w e remain bearish key metals such as copper, iron ore and steel on a medium-term basis and our forecasts are generally below Bloomberg consensus. W e expect a relapse in Chinese economic growth by Q413 and a continued slowdown over the coming years.

  • The proposed reform of the LME warehousing system aimed at reducing significant delivery queues presents a downside risk to even our own relatively bearish price forecasts, particularly for aluminium .

  • Boom Years Behind Us
    S&P GSCI Industrial Metals Index (Monthly Chart)
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