Analysts at TDS expect that certain metals will outperform their peers, as the respective markets tighten while scarce inventories along with firm demand precipitate deficits.
Key Quotes
“Zinc and lead are the top contenders for prime performance in the first half of the year, while copper, aluminium and nickel may benefit from positive correlations to the rallying complex. Their performance should lag that of their peers however, as their well supplied market and bloated inventories keep the physical market well supplied, capping rallies into next year.”
“Strong global demand and voluntary mine production cuts are depleting zinc inventories, which should fall to near critical levels into 2019. That being said, signs have emerged that previously shuttered mines may resume production, which should provide the market with some metal after the second half of the year — although we do note that any increase in production should remain gradual, as to not disrupt the market.”
“Although invisible stocks may provide the market with some shortterm relief, as extreme backwardations incentivize metal holders to place the metal on warrant, the market is still set to tighten considerably into the first half of the year. As a result, we expect prices to be supported higher to a quarterly average of $3,350/t. Zinc's sister metal, lead, should perform well for similar reasons.”
“At the same time, the recently “electrified” nickel demand expectations amid electric vehicle optimism have sent prices surging to levels not seen since 2015. But, with indications that supplies from the Philippines are returning — subject to government approval, as the mining commission has reportedly voted on lifting the ban on open-pit mining — and Indonesia increasing its export permit allowance, we expect that physical demand for the metal will remain well covered. Furthermore, a massive store of above ground inventories in warehouses totaling some 225 days of consumption will be another source of supply preventing a tightening in the nickel market.”
“And, while we join the market in our long-term optimism with regards to the electrification trend, the rising briquette stocks – which is the product type most suited for battery materials – seem to suggest that demand from EVs will not add any material pressure on market balances for a while yet.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: Extra gains need to clear 0.6400
AUD/USD rose for the third day in a row, approaching the key 0.6400 resistance on the back of the acute pullback in the US Dollar amid mounting recession concerns and global trade war fear.
EUR/USD: Powell and the NFP will put the rally to the test
EUR/USD gathered extra steam and advanced to multi-month peaks near 1.1150, although the move fizzled out somewhat as the NA session drew to a close on Thursday.
Gold holds positive ground above $3,100, all eyes on US NFP data
Gold price recovers some lost ground to near $3,115 during the late American session on Thursday after facing some profit-taking in the previous session. Escalating concerns over a global trade war and ongoing geopolitical risks boost the Gold price, a traditional safe-haven asset.
Ethereum: Short-term holders may not impact ETH's price, Pectra mainnet upgrade set for May 7
Ethereum declined by 3% on Thursday as market participants continued to react to President Donald Trump's announcements regarding reciprocal tariffs. However, the selling pressure may not persist since most ETH short-term holders already sold their assets in March.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.