July 27, 2020
Metal prices surged 8.4% in June 2020, following a 3.7% rise in May, driven by a confluence of demand recovery in China and supply concerns in Latin America. However, prices are still 5.2% lower than at the start of the year due to the impact of COVID-19 containment measures. The World Bank Metals and Minerals Price Index is projected to average 13% lower in 2020 relative to 2019 on expectations of a subdued global economic recovery. This outlook is subject to several downside risks. Fears of a second wave of COVID-19 may force governments to re-impose stringent measures that could hamper metal demand. New stimulus measures in China—the world’s largest consumer of metals—may be less effective than expected because they include “new” infrastructure (such as 5G networks and electric vehicle charging stations), which are less metal-intensive than “traditional” infrastructure (such as rails and bridges).