The Metals Complex Rallies


Metal prices rose across the board as macro tailwinds continued to provide support. Despite pushbacks from the downstream physical market, copper managed to continue its parabolic run, approaching its decade high, with LME 3M prices hitting an intraday high of US$9,765/t yesterday. Further stoking the spike is strike action at Chilean ports, which is threatening exports of copper concentrate amid an already fairly vulnerable supply picture.

Workers on a copper foil production line in Jiangxi Province

The relative strength in LME copper versus Shanghai, however, has led to an open export arbitrage for some players, which may potentially deter some speculative buying in London in the very short term. The speed of copper’s seasonal destocking is lagging due to its high prices. In addition, there were reports that spot treatment charges rose for the first time since last August, possibly an early sign that spot TCs may be bottoming, but still too early to call.


Rangebound trading remains the theme for the oil market, with ICE Brent continuing to trade a little above US$65/bbl. There are clearly some concerns around the demand outlook, particularly over how the Covid-19 situation is developing in India.  The big question is whether OPEC+ feels that the situation is bad enough to alter its planned production easing from 1 May. We still expect that the group will announce no changes to its plan when they meet tomorrow.

Despite the situation in India, yesterday the Joint Technical Committee of OPEC+ reportedly increased their demand growth estimates to 6MMbbls/d for this year, up from 5.6MMbbls/d last month. In addition, OPEC+ believes that the inventory overhang will have largely disappeared by the end of this quarter.

Libya’s National Oil Corporation has lifted the force majeure that was put in place last week on the eastern port of Hariga after a funding dispute was resolved. Production is expected to restart gradually. Last week, Agoco said that it was forced to reduce output due to a lack of funding, which saw the country’s output fall by 280Mbbls/d.

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Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...

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