Insight
Metals: the key things to watch in 2020
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
With metals on the front line of the energy transition story, we consider some key risks to our 2020 metal market forecasts. Aluminium faces a new dynamic as the world goes green, whereas smelter performance and bottlenecks will be influential for zinc and lead. The recent approval of new scrap re-categorisation standards in China will be a focal point for copper while in nickel, all eyes will be on Indonesia, the ramp up of NPI and, possibly, the stalling of stainless output. Elevated geopolitical risk leaves gold poised to perform strongly.
Table of contents
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Aluminium
- Aluminium production may be affected by an escalation in Middle East tensions
- Expectations of ROW surplus may also be dashed by production cuts
- Smelters may produce more ingot at the expense of value-added products (VAPs)
- Green aluminium may finally deliver the premium sought by producers
- China’s ability to absorb the ex-China alumina surplus is crucial
- Guinea politics could spill over into seaborne bauxite supply disruptions
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Copper
- Manufacturing sector will underpin growth in copper demand; China remains key
- EV and renewable incentive approaches will have varied impacts on copper demand
- Shift in global scrap dynamics in response to changes in Chinese scrap policies
- Watch for a return to mine supply growth in 2020
- Watch for smelter production cuts, under lower TC/RCs
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Gold
- Geopolitical risks are set to remain elevated.
- M&A activity is expected to have a bumper year
- Replenishing reserves will be a key area of focus for miners
- Project approvals should garner increased support if the price remains compelling.
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Nickel
- Chinese NPI stutters as Indonesian NPI expands rapidly
- HPAL – plants come and go while delays mount in Indonesia
- Indonesian stainless output stalls and may even fall
- European stainless rebounds as imports from Asia are warned off
- NiSO 4 premiums will switch to discounts
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Zinc
- Smelter performance is critical to market outlook
- Mine closures imminent?
- The macro economic environment
- Sentiment has led to a disconnect between prices and stocks
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Lead
- Lead mine production stagnating
- ROW lead smelter bottleneck emerging
- Changes in the SHFE-LME lead price arbitrage
- Threat of tight lead supply and rising premiums for the US
- Automotive demand in the slow lane
Tables and charts
This report includes the following images and tables:
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Material flows and aluminium production at riskBreakdown of global cast house production, Mt and in % of totalYear-on-year changes in copper mine production
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US market balance drops deeper into deficit since closure of its last smelter in 2013Huge imbalance in US refined lead tradeUS scrap lead exports to the four key destinations
What's included
This report contains:
