Base Metals: Prices relatively low during the second quarter – ABN Amro

The uncertainty over the coronavirus remained high, which continued to weigh on sentiment in base metals markets, per ABN Amro strategists.

Key quotes

“The supply and demand fundamentals have deteriorated sharply. This means high availability in the short term and will keep prices relatively low during the second quarter of this year.”

“The direction of base metal prices will continue to be dominated by the coronavirus, government policies and the positioning of investors. A positive turn in macro sentiment will be triggered by a containment of the coronavirus epidemic.”

“For 2021, global economic growth will show some recovery. If the current low price environment will last for longer, this will result in capacity reductions across the globe. This will impact the supply-demand balance strongly, which will increase the chance of widening deficits on the longer term and will help a recovery in prices.”