SMM News: British economic research and consulting firm Capital Macro (Capital Economics) said that pessimism about the recession caused by COVID-19 may have been overdone, and that China will become the bellwether of the global economy, and there is room for industrial metal prices to rise further.
Neil Schilling (Neil Shearing), chief economist at Capital Macro, said in a recent webcast that compared with the 2008 financial crisis, there is little reason to expect the epidemic to be a long-term drag on economic growth. Instead, economic opportunities may be hidden in resistance to globalisation, higher debt levels, shifts in the way they work, and less emphasis on austerity.
He pointed out that most economies will not return to pre-outbreak GDP levels for the next two to three years, but China will take the lead driven by investment-intensive stimulus measures.
Schilling said that some countries will undergo fundamental changes, some countries will permanently shrink, while others will grow and develop on the original basis.
These factors have a significant impact on commodity markets, and the prices of some industrial metals are already higher than they were before the outbreak of the virus, and Capital Macro believes that there is still room for further gains in the future.
Keep an eye on industrial metals
Within the scope of Capital Macro's forecasts, central banks are expected to continue to keep interest rates at a minimum. Given that real yields, excluding inflation, are likely to remain low, gold prices will remain high in the medium term.
Demand for industrial metals fell sharply earlier this year after quarantine measures were taken to contain the virus, causing prices to hit an all-time low in March.
But iron ore prices have rebounded rapidly, with all metals except aluminium and lead rising so far this year, according to James O'Rourke, a commodities economist at Capital Macro. 'despite the rebound this year, prices are expected to rise a little more by the end of 2021,'he wrote.
"first of all, China's economy will return to its pre-virus track by the end of 2020, earlier than any other major economy." "China's recent increased fiscal stimulus, mainly focused on metal-intensive infrastructure spending, gives [metal prices] room for manoeuvre this year, and faster credit growth will further boost the economy," he said. "
![El aumento de los precios de la energía intensifica las preocupaciones por la inflación y el fortalecimiento del dólar estadounidense arrastra a la baja los precios del cobre [Comentario matutino sobre el cobre de SMM]](https://imgqn.smm.cn/usercenter/vcsIC20251217171710.jpg)
