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)|