Since lockdown measures to contain Covid-19 around the world have eased, ratings and research agency Standard & Poor’s Global (S&P Global) says the reopening of economies, combined with monetary stimulus by banks and governments, has allowed industrial metal prices to rise.
However, even though industrial metal prices have risen from the lows experienced in the first quarter of the year, there remains a possibility of a second wave of Covid-19 infections as lockdowns are eased.
“It nevertheless remains a significant downside risk to industrial metal prices for the rest of the year, despite local supply-side impacts that could provide some price support for particular commodities,” the agency states.
S&P Global Market Intelligence commodity analyst Jason Sappor says base metals demand has mostly been supported by China as it started reopening its economy and ramping up production.
China’s purchasing managers index has expanded to above 50, compared with a low of 37 in January.
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