Macroeconomic backdrop for industrial metals to remain poor

The impact of QE3 will be a major talking point during LME Week, which starts next Monday. However, even more purchases of relatively liquid US assets by the Fed will do nothing to address the underlying economic and financial problems in Europe, or the growing dependency of China’s growth on an unsustainable investment boom. These, and not the health of the US financial system, are now the main source of macroeconomic risks for the metals markets.