BMO analysts say China's economic slowdown will pose a huge threat to industrial metals in 2019

SMM1, July 7: global markets have fallen sharply this week as fears of a slowdown in China's economy have weighed on industrial metal prices and heightened concerns about future demand, prompting analysts to question. Whether the Chinese government has done enough to deal with the contraction. Hamilton (Colin Hamilton), an analyst at Bank of Montreal (BMO), said in a note to investors Friday that China's aggressive fiscal spending reporting trend has caused many problems in the metals market, but consumer-led data are weak. One of the main questions, he wrote, is whether the Chinese government is taking the necessary measures to stop the economic downturn. "this is really the big problem this year," Hamilton said. "there is no final conclusion yet." "We expect these measures to begin to take effect by the end of the first quarter."

Battery metal

In fact, some of the end-use areas where the analyst expects demand growth to be better in 2019 are those related to China's infrastructure. These include high-speed railways, ultra-high voltage lines, electric vehicle charging stations, especially packaging and machinery. It's called battery metal.

The bank of Montreal warned that china's decision to reduce many electric vehicle subsidies by about 30 per cent in 2019 compared with last year was undoubtedly bad news for nickel, although it expected limited impact on penetration forecasts.

In his concluding report, the (BMO) analyst at the Bank of Montreal pointed out that metal producers may be surprised this year because cash-rich miners have the potential to show better productivity on existing assets and reduce similar costs.

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