Sucden Financial’s head of research, Daria Efanova, shared insights on the third-quarter metals webinar, focusing on the key base metals in the market. Efanova highlighted the significance of copper prices in the last quarter, stating that its upside has been a driving force for the base metals market. The strong correlation between copper and other metals has led to a spike in prices, primarily fueled by speculative positions.
While copper prices have surged, aluminium closely followed suit in the second quarter. Efanova expects fundamentals to play a more prominent role in the aluminium market in the upcoming months as production in China is on the rise, leading to market tightness.
In contrast, nickel faces challenges as increased production from Indonesia continues to impact prices. Efanova noted that while there is potential for nickel prices to increase, the dominance of Indonesian material poses a significant hurdle.
Additionally, zinc prices experienced volatility but strengthened alongside copper prices in the second quarter. Efanova predicted controlled upside for zinc prices in the third quarter due to limited demand growth.
Lead prices saw robust gains in the second quarter, driven by speculative positioning rather than increased production. However, Efanova expressed uncertainty about lead breaking out of its current range.
Lastly, tin prices are expected to remain elevated due to tightness in the refined market. Efanova attributed the bullish outlook for tin to Indonesia’s backlog in issuing new licenses, creating supply constraints.
Overall, Efanova highlighted the impact of macro factors on the base metals market, emphasizing the role of political uncertainty and interest rate cuts in shaping market dynamics. Sucden Financial predicts interest rate cuts in the US and a gradual approach in Europe, with a focus on the ongoing US election season.
