Moody’s expects metals to remain expensive in global recovery
As production increases to meet growing demand, inventories will also build up, but inventories are currently “generally low from past levels,” Moody’s said.
Base metal prices hit record highs in the second quarter of 2021, Moody’s said, noting that “steel prices have jumped amid recovering demand, higher utilization and product shortages. “, in particular increasing the prices of iron ore.
Precious metal prices remained high in the second quarter, but still below their all-time highs from early 2021, Moody’s noted.
“Copper prices remain high amid an economic recovery and low inventories,” the report said, noting that the lack of stocks leaves copper markets “fragile and vulnerable to supply disruptions, especially in large countries. producers like Chile and Peru, which together account for around 40% of global copper production.
“The presidential elections in Peru and Chile in 2021, and Chile’s plans for drafting a new constitution as well as labor negotiations there, will influence global copper supplies, possibly creating new temporary spikes in copper. price, “he added.
Aluminum prices are also expected to remain high in the near term, but will ease over the medium term as several factors limit demand, “including the slow recovery of the global aerospace sector, an auto industry facing semiconductor shortages. and the continued growth of cast iron capacity in China, which accounts for over 50% of world production and consumption.
Moody’s said steel prices will remain high in 2021 due to supply and demand imbalances, before gradually falling to their historical averages as demand declines. This change will be driven by falling stimulus dollars and a shift in consumption patterns, as economic reopening allows consumers to “go back to spending on experiences rather than material goods.”
Gold prices are also expected to remain elevated in 2021, due to market uncertainty, inflation and pressure on the US dollar.