Many global industries already saw a global slowdown in the second half of 2019 which accelerated in 2020 (Courtesy MetalMiner)
The global slowdown in manufacturing output, which started in the second half of 2019, and the more recent rapid spread of the coronavirus (Covid-19) around the world, has negatively impacted many key industries. The coronavirus in particular has forced many manufacturing industries in the leading economic countries to cut output leading to reduced demand for raw materials such as metals. This in turn has led to a downward pressure on metal prices since the beginning of 2020.
The London Metal Exchange (March 24) reports that the base price for copper dropped by 22% to $4,769/tonne compared with $6,188 at the beginning of the year. The price of nickel has fallen to $11,033/tonne from $14,140; zinc was down to $1,830/tonne from $2,276; lead down to $1,644/tonne from $1,906; and tin was down 22% to $13,250/tonne from $17,140. According to the LME, molybdenum metal recorded a drop to $8.7/lb on March 24 from $9.65 a month earlier, and cobalt saw a more modest drop to $29,000/tonne compared with $33,000.
Chinatungsten reported that there had been only a slight downward movement in the prices of tungsten powder and tungsten carbide powder. Tungsten powder was quoted at $31.60/kg on March 24, 2020, compared with $34/kg a month earlier. Tungsten carbide powder was quoted at £31.30/kg compared with $33/kg in February. Many of the Chinese tungsten concentrate and ammonium paratungstate (APT) producers were either unable to operate or were run at very low operational levels in February and most of March due to coronavirus. China produces some 80% of the global demand for tungsten-based raw materials.
China also produces around half of the world’s production of all base metals and 56% of steel (in 2019). It is reported that with the coronavirus effectively under control in China, insiders are optimistic that the Chinese economy will start to recover in the second quarter of 2020 and in the second half of the year. However, how the rest of the global economy will cope with the ongoing virus situation is still very unclear.