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Outlook for base metals

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Outlook for base metals

Can I get your view on commodities - base metal copper zinc nickel, energy oil, gas and precious metal in the next 3 years? Given the likelihood of inflation, US stimulus and bold infrastructure plans, it does point towards an uptick in commodity prices. Also note, copper and lumber costs are at the historical highs. Thanks Jacky


Hi Jacky,

MM both believes and hopes that governments / central banks are ultimately successful in their quest to inject inflation back into the global economy. In a number of aspects we’ve already got the signs in play with base metals already rallying ~70% over the last year, testing the pre-GFC boom time levels in the process. However the missing ingredient to really set things firing is a kick up in wages, these are likely to follow as unemployment falls courtesy of simple supply and demand.

However we should all remain cognisant of the ramifications of rising inflation i.e. bond yields won’t stay so accommodative forever – MM believes interest rates have bottomed and will also start to rally in the years ahead having a profound impact on which stock market sectors will deliver the best performance. In that sort of environment, commodities generally do very well, making us ultimately bullish base metals and commodities over the coming years

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Bloomberg Base Metals Index
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