The U.S. Geological Survey says that prices for such base metals as copper, tin, nickel, and zinc mostly depend on supply, demand, the economy, and very often, politics. For instance, prices might rise because of a new tariff that affects all commodities, or they may fall because of economic conditions that reduce production demand for a specific metal.
The Base Metal Price Outlook for Copper, Tin, Nickel, and Zinc
While metal commodity prices may always depend upon similar factors, the impact of the coronavirus pandemic had disruptive and unpredictable impacts upon everything that economists generally use to predict commodity prices. With that in mind, take a brief look at the potential outlook for these four metals.
A few weeks ago, Fitch Solutions adjusted its previous copper price prediction upwards for the rest of 2020 and into 2021. They based this more favorable outlook upon two main factors. These include increasing global demand from the energy, construction, and automotive industries and robust economic stimulus measures in China.
At the same time, Fitch also said to watch for some volatility, depending upon news about COVID and upcoming elections. While they forecast generally favorable conditions for higher copper prices, they also expected worldwide economies to experience a bumpy recovery.
According to a Rueters forecast, tin prices should also increase. Mostly, they credit higher anticipated prices to increasing demand from the recovering electronics industry. Soldering electronic components accounts for almost half of the demand for this metal, and market deficits emerged even before the pandemic. During coronavirus, demand dropped somewhat but closed mines and factories also reduced the supply.
Recycling Today reported upon the recent Commodities Spotlight Series from the Institute of Scrap Recycling Industries. Following a very volatile year in 2020, they don’t expect the nickel price to fully recovery until 2022. They also credited any short-term, temporary price rises mostly to declining dollar values. At least for several months, a supply surplus may still outstrip recovering demand.
Fitch thinks that zinc prices will continue to recover through part of 2021. In the longer term, they believe that slower demand will eventually create surpluses that will lower the price by 2022. From 2010 to 2019, zinc consumption grew by an average of 2.2 percent a year; however, they expect that growth to decline in half between 2020 and 2029.
What’s on the Horizon for Zinc, Nickel, Tin, and Copper Prices?
As with many commodities, pandemic safety measures often slowed production. At the same time, an economic downturn limited demand. As economies recover and hopefully, the virus ebbs, prices should generally recover. At the same time, these metals will probably experience at least some price fluctuations for months to years in the future.
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