LONDON, June 26 (Reuters) – COVID-19 has generated the most severe demand shock for industrial metals since the financial crisis a decade ago.
The first-round impact came from the lockdown of key demand sectors such as automotive. The second-round hit, which is still playing out, comes from slumping corporate and household confidence as the economic fall-out from the fatal coronavirus travels around the globe.
But COVID-19 has also affected metals supply in the form of mine and smelter closures due to national quarantine measures. The impact is not uniform but rather reflects each metal’s unique supply profile.
Aluminium production, for example, has been left largely unscathed, with most governments, except Argentina, designating smelters as critical industries that could continue operating.
Tin and zinc, by contrast, have seen significant disruption, partly because of a particularly hard lockdown in Peru, a major producer of both metals. This game of lockdown lottery isn’t over either.