Domestic Material Price Trends

Base metal prices increased through late February and the first half of March, driven by a combination of short covering after mainland China cut its loan prime rate by a much higher margin than expected,

concerns over potential sanctions from the United States on Russian metals, a weaker US dollar, as well as support from technical buying as prices breach the 200-day moving average. This rally will not be sustained for copper and nickel, with prices expected to revert to early February levels, driven by soft demand and oversupply of refined products.

Higher visible inventories and lower regional delivery premiums point to better supply conditions at the start of 2024 compared with one year earlier. Copper prices have bucked the trend of other base metals, finding support over the past six months from a weaker dollar, the sudden shutdown of the Cobre mine in Panama, and expectations of additional stimulus in mainland China, but will face similar downward pressure over the near term as global demand growth slows and a large stepwise increase in refining capacity comes online in 2024.

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