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Australia forecasts base metal prices to fall on US-China trade tensions

  • Monday, December 23, 2019
  • Source:ferro-alloys.com

  • Keywords:Australia,price
[Fellow]Australia forecasts base metal prices to fall on US-China trade tensions

[ferro-alloys.com]Australia's Department of Industry, Innovation and Science has given forecasts for non-ferrous metals for the next couple of years with the US-China trade tensions a major driving factor.

The Canberra-based unit forecasts the average aluminium price to fall from $1,792/mt in 2019 to $1,550/mt by 2021, while alumina is expected to fall from $335/mt to $312/mt over the same period.

"Slowing world economic growth has continued to dampen aluminium demand, especially from China - the world's largest aluminium user," it said in the Resources and Energy Quarterly.

Copper prices are forecast to drop from $5,981/mt in 2019 to $5,769/mt in 2020 before climbing back up to $5,936/mt in 2021, it said.

The report said that slower economic growth as well as concerns about the impact of the US-China trade tensions will weigh on copper prices this year.

"Over the outlook period, rising consumption and constrained production are expected to combine to support a modest recovery in copper prices," it added.

Nickel prices are forecast to rise from $14,049/mt this year to $15,829/mt in 2021, it said.

"Uncertainty around Indonesia's export ban -- which was brought two months forward from the recently changed January 2020 implementation date -- prompted fears of a market deficit," the report said, adding that speculation around looming market shortages prompted a drawdown on warehouse stocks.

"World consumption is expected to outpace constrained production growth over the outlook period, supporting price growth," it said.

Zinc prices are forecast to drop from $2,496/mt in 2019 to $2,211/mt in 2020 before recovering some lost ground in 2021 with $2,275/mt, it said.

"Like other base metals, zinc has been affected by the trade tensions between the United States and China, which have dampened activity in manufacturing and automotive industries - both big consumers of refined zinc and other metals," it said.

"With world mined production widely expected to increase by over 6% at the start of this year, there has been a lingering expectation that the zinc metal market will soon be in surplus - however, this has yet to materialize," it added.

(S&P Global Platts)

  • [Editor:王可]

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