Want to Make Money in Industrial Metals Next Year? Ask China How – by Aoyon Ashraf (Bloomberg News – December 12, 2017)


Base metals have been hot this year with zinc, copper and aluminum among the leaders, climbing between 15% and 23%. But what about 2018? Where would you invest to make money in industrial metals?

China will have the answer. Its supply side discipline can make-or-break industrial metal sentiment for the next year, and will be the main focus for the market. Debates among analysts are heating up on copper and aluminum, while steel, coal and zinc are also creating buzz among the experts. Here are some takes on what analysts are expecting for 2018.

Goldman Sachs

Bank expects outlook of strong growth in Emerging Markets and “soggy” dollar to favor metals markets. Goldman is most bullish on copper and most bearish on aluminum. Copper is “clearly” at the end of a supply boom, where aluminum has rising risk of a supply response, both inside and outside China.

Goldman estimates the three-, six- and twelve-month copper price at $6,750, $6,900 and $7,050 per ton, respectively. Sees iron ore at $60, $55 and $50 per ton for same time period and aluminum unchanged at $2,000 through next twelve months.

Morgan Stanley

Nickel and aluminium are top picks among base metals. China’s supply reform policies to benefit aluminium, while nickel “has plenty of room” to rise as its market tightens. Copper market is expected to be balanced in 2018 and likely to fall slightly versus current price.

For the rest of this article: https://www.bloomberg.com/news/articles/2017-12-12/want-to-make-money-in-industrial-metals-next-year-ask-china-how