Don’t rule out further price falls

February was another poor month for industrial metals. However, prices fell by less than in January and policy loosening seems to have stabilised prices more recently. That said, the outbreak of COVID-19 is quickly becoming a global issue, which suggests that the risks still lie to the downside. In our view, a large hit to industrial metals demand in China has already been priced in. But we think that a dent to growth outside of China is now inevitable, even if policymakers continue to raid the armoury to shore up the economy. Therefore, industrial metals prices could fall further in the near term.