LONDON (Reuters) – Three months can be a very long time in markets, the last three months particularly. COVID-19 has upended the world as we know it, forcing millions of people into lockdown, wiping out global economic growth and triggering a massive government response, most recently in the form of a historic multilateral deal to prop up oil prices.
In the world of industrial metals, the coronavirus has generated an unprecedented demand shock and, as ever more mines close, a lagging supply shock.
Pity the analysts who have to try to make sense of this chaotic world. Unsurprisingly, base metals forecasts have been slashed in the latest Reuters analysts poll relative to January.
Early-year optimism that demand would recover from a synchronised slowdown in 2019 has evaporated. It is now just a case of how low metals prices can go before some sort of recovery.
Median cash price forecasts for 2020 have been cut across the metallic board by anywhere between 21% (nickel) and 9% (aluminium) as analysts try to price the cumulative demand shock from a collapsed automotive sector, a partially locked-down construction sector and plummeting consumer confidence.