Base metals: Sizeable risk to both the up and downside – NAB

From their speculative peak in May, base metal prices fell sharply until early August, with the LME index falling by 18.7% peak-to-trough, with Nickel and Copper recording the largest falls, NAB commodity strategists note.  

Volatile metals search for direction post correction

“Prices rallied from this relative low – limbing almost 10% by late August, led by Aluminium and Zinc, before the index eased somewhat once again.”

“The Copper-led surge in base metals between early April and mid-May came despite a growing surplus in Copper markets. Data from the International Copper Study Group shows that refined supply exceeded consumption by around 488 kt in the first half of 2024 (compared with around 115 kt for the same period in 2023).”

“Following the steep corrections in metals prices, we have revised our forecasts for base metals lower – albeit we note that the high degree of volatility in these markets means that there is sizeable risk around these forecasts to both the up and downside.”