Monthly Metals Strategy


We remain bearish on key metals such as copper, iro n ore and steel over the medium term, and our forecasts are generally below Bloomberg consensus. We expect the recent stabilisation in the Chinese economy to unravel in 2014, and forecast continued slowdown in the coming years.

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

  • As a means to play our bearish view on China's steel sector, we initiated a bearish iron ore view in our commodities strategy table in early September . Iron ore is the metal most exposed to a slowdown in Chinese fixed asset investment.

  • Boom Years Behind Us
    S&P GSCI Industrial Metals Index (monthly chart)
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