May 6, 2020   SOURCE: BusinessWire

World Commodity Forecasts for Industrial Raw Materials: Updated Forecasts In Light of COVID-19 Impact - ResearchAndMarkets.com

The "World Commodity Forecasts Industrial Raw Materials" report has been added to ResearchAndMarkets.com's offering.

The Industrial Raw Materials (IRM) price index is estimated to have contracted by 8.6% in 2019, reflecting a fall in base metal and crude oil prices. Plummeting global growth, primarily in China, and the escalating US-China trade war have hurt industrial activity and goods trade in both countries. Although the imposition of blanket tariffs on imports of base metals, alloys and related products by the US caused prices to rise in US markets, this was not replicated elsewhere, including in Europe, where most of the price series is based. Significantly, it is estimated that the tariffs caused metal prices to diverge between the US (where supply shortages and higher import costs pushed prices up slightly) and other economies (where extra supplies, which would otherwise have gone to the US, pushed prices down slightly). The IRM price index is expected to fall by 6.1% in 2020, as the coronavirus pandemic hurts industrial activity and rise by 6.8% in 2021, as depleted stocks and a moderate rise in demand push up base metal prices.

The base metals sub-index is now estimated to have fallen by 10.3% year on year in 2019, as economic headwinds created by trade tensions weighed on activity in the industrial sector. Although some markets tightened, others, such as steel, were still plagued by oversupply. Production capacity-bolstered by a surge in investment during a decade-long boom in prices in the 2000s-still exceeded demand. Moreover, Chinese producers may have looked to export a larger percentage of their commo-dities output as domestic consumption slowed (albeit modestly), putting pressure on global prices. Base metal prices are now expected to fall by 7.5% in 2020, as a result of slowing industrial activity due to the coronavirus pandemic. The US economy is expected to enter into a downturn in 2020, but falling stocks and higher investments in infrastructure, especially in China, are expected to push prices up by 7.6% in 2021.

Metal prices sagged in early 2019, as the US and China entered into a full-blown trade war. With the exception of nickel, it is estimated that prices did not recover to their early-2018 highs over the remainder of 2019, as the trade war continued to weigh on business sentiment, particularly in the transport, manufacturing and construction sectors. However, policy-led decisions to rein in the supply of some industrial materials and metals in China, together with continued demand from key emerging sectors - including electric vehicles - helped to keep a floor under base metal prices in 2019. In 2020 and 2021 prices are expected to return to growth, as falling stockpiles and investments in infrastructure raise demand for industrial metals. The price of aluminium, which has the highest weighting in the metals index, is estimated to have fallen by 15.2% in 2019, as slowing global GDP growth weighed on consumption. In 2020 aluminium prices are expected to fall further, by 11.8%, before returning to growth of 12.5% in 2021. US import tariffs on aluminium products will continue to exacerbate the divergence in prices, with supplies being diverted to markets outside the US.

Key Topics Covered:

  • World Commodity Forecasts Industrial Raw Materials
  • Commodity price index: industrial raw materials
  • Base metal prices are expected to return to growth in 2021
  • Trade barriers will undermine future demand for industrial metals
  • Copper prices could tumble if China's economy slows more than expected
  • Rubber prices are expected to rise in 2020-21
  • 2020 promises to be a turbulent year for the global oil market
  • The oil demand outlook for 2020 is the weakest in recent history
  • The weak demand outlook will limit OPEC's ability to lift oil prices in 2020
  • Oil prices will begin to recover in 2021-22, but only gradually
  • Aluminium
  • Coal
  • Copper
  • Cotton
  • Crude oil
  • Gold
  • Lead
  • Liquefied natural gas
  • Natural gas
  • Natural rubber
  • Nickel
  • Steel
  • Tin
  • Zinc
  • Statistical appendix: industrial raw materials

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