Metals losses last week were headlined by nickel’s 9.1% selldown on Friday, with base metals prices generally falling by 7-10% over the week.
Macquarie’s positive position on metals is based on a combination of low metals inventories, a soft (rather than hard) landing of the US economy, and continued strong growth in the Chinese economy.
“We tend to believe that between now and the end of the year, there will be further inventory declines in copper, zinc and even aluminium, and this will be enough to support prices,” the bank said.
“Metals prices are being caught up in a general commodity sell-off, led by oil, even though the fundamentals of the metals are far stronger than those for oil.”
Despite the emerging general bearishness, equity investors and traders on the Australian Stock Exchange did not appear overly skittish in morning market action, with stocks being sold down but not decimated.
