Base Metals In 2020: Fortunes Hinge On China

For base metals, 2019 was a challenging year in the backdrop of a fierce trade dispute between two of the world’s largest economies — the US and China.

- G Chandrashekhar

The initial high hopes of an amicable resolution were gradually dashed in the later months.

In combination with a growth slowdown in major economies such as Europe and Japan, the seemingly endless trade dispute resulted in a more sober assessment of the market conditions, especially the demand side, which in turn had a softening effect on metal prices. Fortunately, towards the end of the year, prices somewhat recovered, following the agreement between the US and China to sign the Phase One of the trade deal. As a result, most metals recouped their losses. In fact, copper turned out to be one metal that showed a net gain during the year, ending well above the psychological level of $6,000 a tonne.

Another metal that was often the focus of attention was a nickel. Its prices soared almost by two-thirds following the mineral-ore export ban announced by Indonesia. But the metal later lost almost half of its gains. On the other hand, tin was the biggest casualty of sharply falling prices.