According to a Reuters article, Bank of America analysts have predicted a volatile market for metals and minerals in 2025.
Analysts said that the volatility of the metals markets would be affected by possible trade policies, restrictions in supply and shifts in demand.
The bank predicted that aluminium and copper would decline by 6% and 12 % respectively next year.
According to the report, aluminium prices are expected to be $2,813 per tonne and copper prices at $9,438.
The three-month contract for copper on the London Metal Exchange is $9,007.50 a ton at the time of this writing, down by 0.2%.
The LME contract for aluminum was $2,584 per tonne, down 0.5% compared to the previous close.
Trade dispute with China
The bank stated that a potential trade war between China and the US could worsen market dynamics in 2019.
These metals could be supported by the energy transitions.
Donald Trump, the US president-elect, has threatened to impose tariffs of 70% on all Chinese imports.
China is a major consumer of metals and a producer of red metal.
Since Trump’s election, base metals have been in pressure due to a potential trade war with China and a weakening demand outlook.
Metals demand could be affected by a trade dispute between two countries.
The metals market has been affected by the slow economic growth in China for much of this year.
Iron ore surplus
Iron ore is expected to be in surplus due to the overcapacity of China’s steel and export growth.
Bank of America stated that the stabilisation of iron ore prices may be dependent on production reductions.
The China Iron and Steel Association reported that steel inventories in major Chinese mills increased for the second week running to 15,6 million tons at mid-November. This is a 13.8% increase compared to the early part of November.
As a result of improved margins and the restarting of production by some mills after August and September cuts, the association reported an increase in steel production in China in November.
Precious metals price forecast
Bank of America predicted that gold prices will average $2,750 an ounce in the next year.
Although the bank stated that yellow metal prices are under pressure from a rising dollar, and increased expectations for interest rates to rise, diversification of portfolios and global debt will likely provide support.
The February gold contract at COMEX closed on the day of this article at $2,665.41 an ounce. This is up 0.7% compared to the previous close.
Silver prices will also rise in the coming year, due to increased demand for solar panels and electrical vehicles.
The bank was still bearish on metals within the platinum group.
The bank also said that lithium prices are under pressure because of new supplies and a lack of production discipline.
It said that prices could stabilise after 2025.
Bank of America remains bullish about uranium as it anticipates increased demand from nuclear power plants.
This post Bank of America predicts volatile Metals and Minerals Market heading into 2025 could be modified as new updates unfold
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