Fluctuating Trends Remaining with Changes of Fundamentals

摘要

The world economy is turning for the better. From Q3 of 2003, base metals market reversed the downward trend that lasted two years and the prices stopped dropping and became steady. In Q4 of 2003, the news that China would lower the export tariff was the fuse of metal price rebound and the metal market ended bear sentiment and started a new cycle of rebound. The later sudden depreciation of US dollar drove the metal price to increase till mid-March this year. All the metals reached a new high in early March. And later on with the strengthening of US dollar, China's cooling policies over economy and the withdrawal of funds from metal market, the metal price dropped back again. At present, the global fundamentals of base metal market are not bad: most metals are in short supply and the inventory is relatively small. The problem is: China's macro-economic control policies have not shown obvious yet and are waiting; the economic data of America is good, which might result in a lift of interest by the Federal Reserve and therefore bring pressure to prices in the second half this year. Under the circumstances, base metals prices might possibly consolidate in H2, forming a shape of box in technical charts.