Wealth Monitor April 2016 | Page 29

3.1 2.9 BASE METALS | Price Recovery 2.7 2.5 2.3 2.1 3.1 1.9 2.9 Copper Prices ($/Pound) 50000 Nickel Futures (LME $/Tonne) 45000 Monthly Highs Since Jan 2007 40000 1.7 2.7 35000 30000 2.5 Sources: Investing.com 25000 2.3 20000 15000 2.1 10000 1.9 Sources: Investing.com; International Copper Study Group; London Metal Exchange; Commodities Market Outlook, World Bank; Goldman Sachs Group March Release T he falling price trend in base metals which dominated most of 2015 crept into sentiment for the early part of this year. Concerns around the global economy, dominated by the negative sentiment surrounding the Chinese economy in particular, led to a direct fallout in demand and prospects for industrial metals. While prices have recovered since then, it would be imprudent to opine that the cycle has turned. While February saw a broad-based rally across the commodities market, March has seen some level of cynicism creep into sentiment prevailing around the bounce back buoyancy. The year remains heavily laden with economic events and related data is expected to continue to dictate the sentiment around the base metal markets. Copper Recovers Copper prices reversed the downwards trend which continued during the beginning of the current year and have seen some price stabilization come in. The fallout of the near 25% price correction during 2015 has been witnessed in a number of producers cut production or completely suspend output. Results for Antofagasta PLC, amongst the top 10 producers of copper miners worldwide, which reported a pre-tax profit of $259 mn over 2015 from $1.5 bn, a year ago are a stark reflection of the year gone by and the hit the industry has taken. As per the recently released outlook by the International Copper Study Group (ICSG), the global refined copper market is expected to remain ‘essentially balanced’ in 2016 compared with a previous forecast in October for a 175,000 tonne surplus. April 2016 | www.wealth-monitor.com Feb-16 Mar-16 Jan-16 Dec-15 Oct-15 Nov-15 Sep-15 Aug-15 Jul-15 Jun-15 Apr-15 May-15 Mar-15 Jan-15 Feb-15 5000 1.7 0 Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May