Metals prices will rise in coming months so now is a good time to lock in. However, while the buyer's market is winding down, we do not expect a seller's market. As producers adjust output to consumption, metals will be more balanced in 2020.

We see steel prices are at or past bottom, so lock in as soon as possible as prices have turned upwards in the United States and China. Europe and India are at bottom and hikes will begin by January, or February at the very latest. Aluminum and copper are following their own markets, but generally tell the same story. The good news for buyers is that increases in 2020 will be mild and generally slow.

Supply will remain ample, although surplus conditions are moving toward balance. The largest upside price risk is the regular weather risk for December-April from Australian cyclones. This year they would do greater than normal damage. Cyclones have occurred four of the past eleven years.

Almost all other risk is to the downside:

• Economic weakness is more likely than strength
• Production cuts are assumed but not certain
• Fundamentals say iron ore should be closer to $60 than to $100

Will it stay a buyers market through 2020? John Mothersole and I sat down to discuss this and the metals supply chain for 2020. Come listen to our latest podcast to learn more.

Posted 14 January 2020 by John Anton, Director, Pricing and Purchasing, S&P Global Market Intelligence and

John Mothersole, Director of Research, Pricing and Purchasing, S&P Global Market Intelligence