The Trump trade wars has pushed down base metals, and the deflated price could be a good barometer for global growth, said Hans-Arne L’orange, director of Clarksons Platou Securities.
“Dr. copper is known world-wide to give a good indication of the world’s GDP growth, and I think the drop from April is a clear indication that the trade war, the tariffs [are escalating], and people are afraid of NAFTA renewal with Canada, so I think this is fair,” L’orange told Kitco News on the sidelines of the 121 Mining Investment conference in New York.
L’orange maintains a bullish outlook on nickel long-term, adding that depressed prices in base metals may not reflect true fundamentals.
“I think the bullish sentiment around electric vehicles and batteries and renewables is going to continue and is going to certainly be reflected in the real demand for the metals. There’s plenty of inventories and there’s plenty of futures contracts, so I think there’s a lot of financial players that really have shorted their positions in all of these metals and I think that can continue for a pretty long time,” he said.
L’orange noted that underlying inventories of base metals like zinc and lead are getting lower, similar to how OPEC limited supply.
