Industrial Metals Prices Surge on Global Manufacturing Rebound
In recent months, prices of key industrial metals such as copper, aluminium, steel, and zinc have been on the rise, reaching fresh multi-year highs. This upward trend is fueled by supply disruptions and a significant increase in global demand, particularly from the USA and China, the world’s top two economies.
The resurgence of manufacturing activity in these countries has played a major role in driving up the demand for industrial metals. Manufacturing in the USA experienced growth for the first time in one-and-a-half years in March, while China’s manufacturing activity expanded for the first time in six months, signaling a recovery despite challenges in the property sector.
Analysts are anticipating that China will announce further stimulus measures to address issues in the housing sector, which could lead to even higher demand for metals. The latest Purchasing Managers’ Index (PMI) readings have shown improvements, with China’s PMI reaching its highest level since the previous year, driven by increased export orders and factory output.
In Europe, Germany’s industrial production exceeded expectations in February, indicating a positive trajectory for Europe’s largest economy. Meanwhile, India’s manufacturing sector hit a 16-year high in March, showcasing robust growth in the sector.
The surge in demand for metals has led to sharp increases in prices across the board. Copper prices have soared more than 15% in the past two months, with forecasts suggesting further upside potential. Zinc prices have also surged by 12% in the last two weeks, reaching near-one-year highs.
In India, metal stocks have seen a significant uptick, with the Nifty Metal index surging over 17% in less than a month. Companies like Hindustan Zinc and Vedanta have witnessed substantial gains in their share prices, reflecting investor confidence in the sector.
Overall, the global manufacturing rebound and increased demand for industrial metals are driving a bullish trend in the metal market, with prices expected to continue their upward trajectory in the coming months.
