The HC Commodities Podcast The Metals Markets in 2024 and Beyond with David Wilson
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Nov 13, 2024 David Wilson, Senior Commodities Desk Strategist at BNP Paribas Markets 360, dives into the volatile metals markets. He explores the impact of China’s economic strategies and U.S. policies on prices across copper, aluminum, nickel, and gold. Wilson highlights the complexities in the copper market due to algorithmic trading and supply challenges. He also discusses the growing dominance of Indonesia in nickel production, shifts in battery technology preferences, and the intricate dynamics influencing gold prices amid economic uncertainty.
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Sentiment Drove Early 2024 Rally
- Metals rallied in early 2024 driven more by investor sentiment than immediate fundamentals.
- Markets then cooled as stimulus hopes faded and political uncertainty rose ahead of the US election.
Fund Flows Versus Physical Signals
- Funds rotated aggressively into copper in April, amplifying price moves separate from physical demand.
- Physical indicators in China signaled weakening demand despite higher LME prices.
China's Onshore Discounts Revealed Oversupply
- Chinese onshore copper fell into discount while import premia went negative, revealing oversupply there.
- Those physical price moves exposed the rally as driven by financial flows, not tight global fundamentals.