Industrial metals: Prices are holding up relatively well despite losses
by David Fleschen
The recovery in industrial metal prices was short-lived: weak US stock markets pushed prices down yesterday afternoon, so that they either lost part of their profits (zinc) or slipped (copper). As oil prices and stock markets continued to fall after the LME closed, metal prices are partially making up for these losses this morning. Again, virus worries have to bear the decline, since the corona virus continues to spread rapidly outside of China and, for example, the US state of California has declared a state of emergency because of the virus. Overall, the metals still hold up relatively well, especially when compared to energy sources.
Steel and iron ore prices are also not exceptionally low, although according to industry reports, the corona virus has hit the steel industry in China particularly hard. According to the preliminary car sales figures in China (see Daily Info Raw Materials from Yesterday), further “hard” data will be published at the weekend, giving an impression of the strength of the slump in the Chinese economy. The market, like us, expects weak trading data for February (January numbers will also be submitted tomorrow). However, this should be largely escalated in metal prices. If the data turns out to be less bad than expected, prices could even rise a little early next week.
Source: Commerzbank Research, Photo: Fotolia