Refined metal prices have continued higher amid continuing production shortages and power outages. At the same time, final demand outlook from the largest metal consumer China has faded. Longer-term outlook supports moderating metal prices, but in the near-term, low metal supply could continue to contribute to global inflationary pressures, economists at Danske Bank report.

Power crunch supports metal prices despite fading demand outlook

“We do expect metal prices to moderate over the longer term on the back of both fading Chinese demand outlook as well as recovering supply.”

“In the near-term, the looming energy crisis is unlikely to fade quickly ahead of the winter’s heating season in developed economies and China.”

“Both the limited supply and elevated prices of metals are likely to continue to contribute to global supply chain challenges and inflationary pressure over the coming months even if the longer-term outlook is for lower prices.”