Steel Products Prices North America
March 16, 2016
Base Metals to Remain Lower than 2014 Levels
Written by Sandy Williams
Base metals are set to increase in 2016 but will be below levels seen at the end of 2014, said Frank Hoffman, IHS senior economist during the IHS First Quarter 2016 Pricing and Purchasing webinar. Production cuts and inventory dynamics along with benign global growth will keep metals prices from rebounding higher.
The zinc market saw mine production drop off mid 2015 due to production cuts and general line closures. The bulk of the cuts occurred late in the year, moving the market into deficit. It typically takes 2-3 months to impact the market, said Hoffman, and an upswing in prices was seen in January. Hoffman advised not to be carried away by fluctuating storage fees that lead to volatile daily fluctuations in LME inventory figures. Commercial stocks of zinc have been “gradually unraveling” for the past several years, which supports seeing a tighter market on supply side leading to deficit and price increase. The forecast for 2016 is higher prices but below 2014 levels.
