Supply disruptions supporting the fundamentals amid weak demand
As the base metals markets generally continue to endure weak demand conditions, mainly due to the US-China trade dispute, the supply side of the equation is setting the fundamental tone, with disruptions in many markets recently price-supportive.
Aluminium: Prices tracking our Q3 low case
Given aluminium’s oversold technical configuration, the double-bottom formation on the charts, and overly-short speculative positioning, we are not surprised that a modest price rebound seems to be underway. But, so far, follow-through buying pressure has been disappointing and the Q3-to-date average cash price is still tracking our low-case forecast scenario for the quarter. Some sharper, more sustained short-covering rallies like those seen in July are still required to regain our Q3 base case.
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