Cobalt costs are anticipated to finish the yr increased on the again of a robust cyclical and structural demand outlook, and the financial institution has additionally turn out to be extra bullish on nickel, now anticipating a deficit in 2021 vs its expectations of a 100kt surplus prior.
Even iron ore costs – which have been defying gravity above $200 a tonne this yr – had been upgraded. BMO pared again the tempo of its forecasted decline for the steelmaking uncooked materials and likewise gave onerous coking coal an enormous bump, elevating its forecast by 14%.
To this point so good. With costs for all commodities working onerous over the previous yr – determine 1 – some moderation over the remainder of the yr is to be anticipated:
“With world industrial manufacturing progress charges now having peaked, throughout industrial metals the main target throughout base metals and bulk commodities is now shifting in the direction of period of costs being maintained at present elevated ranges. Demand momentum is beginning to wane, which is the dominant issue behind anticipated declines from spot costs by year-end. Nevertheless, throughout provide chains a mix of pandemic-related points and logistical constraints implies that replenishing inventories at finish customers is ready to take longer.”
However evaluating as we speak’s costs with BMO’s forecasts only a quick yr from now could be, in a phrase, sobering.