After what has been a tough two years for metals demand as a result of a slowdown in manufacturing – particularly in China – the outlook is brighter at the dawn of the new decade. Nick Snowdon, Deutsche Bank’s Metals Analyst at Deutsche Bank Research joins Trade Finance TV to explain how firms had been destocking and acting on a hand to mouth basis which has resulted in a very lean supply chain.
However says Snowdon, following his visit to China at the end of 2019, he could see how China’s infrastructure projects had progressed from new starts to a pick-up in completions, “a very positive stage of a cycle”.
While the Coronavirus is no doubt a destabilising factor, business as usual will eventually return and underlying fundamentals point to a broader growth trend, he notes.
In this episode, Nick also explains how supply is constrained by lack of mining company investment but that pricing looks set to soften in iron ore once Brazil recovers from the dam disaster in Brumadinho.