LONDON, Jan 11, 2017 – This time last year the base metals complex was all doom and gloom. The London Metal Exchange (LME) index of prices touched 2,049 in January 2016, its lowest reading since the dark days of January 2009, when the world seemed to be spiralling into full-blown depression.
China came to the rescue then and it came to the rescue again last year, Beijing policymakers once again pumping money down the twin metals-intensive channels of infrastructure and construction to reinvigorate economic growth. The LME index has since recovered to 2,768. True, performance has been mixed, largely reflecting each individual metal’s supply dynamics.
But the worst seems to be over for base metals prices, with more upside to come. That, at least, is what fund managers are betting on. There was some marginal reduction in fund positions over the course of December but the money men appear to be largely keeping the faith with the broader turnaround story. Continue Reading →