Metals: more fuel left in Trumpflation
Macro outlook Demand for base metals has received a healthy boost since the end of last year from expectations of rising infrastructure spending in the US and rising activity in the global manufacturing sector. Although the market looks to be pricing higher demand in the US from higher infrastructure spending, the implementation lag is likely to be fairly long and we may very well have to look to 2018 before actual investment activity and base metal consumption is seen. Growth in the global economy should continue to progress next year and support base metal demand, but start to level off in 2018. Upstream supply to the world base metals market is beginning to feel the effects of the ongoing consolidation in the mining sector. In particular production of nickel ore and zinc ore has begun to trend lower. The same signs are beginning to show in bauxite production, while production of copper ore is still trending higher. Downstream refinery production is experiencing the same pattern of ...