In a surprising turn of events, the LME metals composite has staged an impressive comeback in Q2 of 2024, rallying by 11.24% following a 10.03% decline in the previous year. This surge was fueled by steady interest rates, bans on Russian metals in the U.S. and U.K., and promising signs of economic recovery in China.
While all base metals saw gains, copper stood out by hitting a new record high of nearly $5.20 per pound before undergoing a slight correction. COMEX copper futures also rose significantly, further solidifying the bullish trend for the red metal.
Zinc and tin also showed strong performances, with zinc rising by 20.44% in Q2 and tin climbing by 19.26%. These metals led the way in percentage gains, showcasing their resilience and potential for further growth.
On the other hand, nickel lagged behind slightly, only rising by 3.24% in Q2. Despite this, the overall outlook for base metals remains positive, with the potential for continued upward momentum hinging on the economic recovery in China.
However, caution is advised as inventory levels have been on the rise for most base metals, signaling a potential oversupply in the market. The path of least resistance for prices will heavily depend on the economic conditions in China in the second half of 2024.
Overall, the impressive rally in base metals during Q2 has set the stage for a potentially exciting second half of the year, with investors closely monitoring the developments in China and other key factors influencing metal prices.
