Economic cycles, over the years, can be influenced in various ways by external and unpredictable factors, such as those linked to international tensions, but also by some specific signals launched by certain industrial sectors. In a global context in continuous transition, constantly balanced on the edge of a tension that has never completely subsided between different regional blocs, the growth of the global economy still appears to be clearly slowing down, despite the good signals received from the growing increase in investments in the renewable energy and everything that will drive the global transition towards green.
Some specific sectors, in a certain sense, can provide extremely valuable signals on the present and future trends of economic dynamics, and over the years, they have gradually established themselves as some of the best indicators ever for evaluating the swings and fluctuations of the economy.
One of these is certainly that linked to industrial metals, whose specific weight – alongside that of the so-called critical raw materials for the completion of the ecological transition – appears to be continuously increasing, also thanks to certain global trends that are starting to emerge with a certain clarity. From a careful reading of the industrial metals market, its vitality, and its overall state of health, the most attentive observers will be able to draw useful indications for evaluating the dynamism of the global economy and its future performance, particularly in the short term and medium term.
From this point of view, many observers seem to agree that the increase in global inventories and the weakness of prices that characterize this market are certainly not positive signs for the global economy (at least until the end of 2023, but probably also at the beginning of 2024). Indeed, on the contrary, these would not be very encouraging considerations. As regards the metals market, for the rest of 2023, it is expected that prices will continue to be characterized by downward pressure, while for next year, some possible improvements are expected, but for the moment still very limited.
The least encouraging signs for the industrial metals market would come first and foremost from the physical and financial markets in different parts of the world. High-interest rates and persistent weakness in demand in recent months have pushed many commercial operators to make clear cost cuts through a substantial reduction in inventories. There is also very little demand from end buyers and a general decline in consumption, also made evident by the concomitant increase in metal inventories at some of the main commodity exchanges.
Many observers, however, combine all this with a generally positive feeling for the new year and the following ones, fueled above all by the fact that metal prices could increase following the parallel increase in the deficit triggered by global consumption and limited production. For the rest of 2023, however, the sense is that downward price pressures may even intensify, pushing metals towards their lowest prices since the beginning of the year.
Among the other factors to take into consideration for the general trend of industrial metals, mention must also be made of US monetary policies and the unpredictability of China, whose limited growth in the short and medium term could have a negative impact on metal prices.
