• On the demand side, industrial activity has improved in 2014, but recent indicators have been mixed. In China, the industrial sector appears to have stabilised following signs of moderation in recent months. Mini stimulus measures may have assisted the improvement. However, a tightening of credit conditions has kept the real estate sector contained, impacting demand for construction materials such as copper. Elsewhere, conditions are mixed. US industrial activity, as demonstrated by the ISM PMI, remains in recovery mode, while Europe and Japan seem to be losing steam. Japan is likely still experiencing fallout from a hike in consumer taxes earlier in the year.

• Copper inventories remain low, and while stocks of some other metals are more elevated, physical supply remains tight –keeping premiums buoyant.

• Average prices across the base metals complex were up in the month, with zinc, aluminium and lead posting the strongest gains. Following strong price rises in 2014, the complex is expected to see more moderate gains in coming years, although the demand environment is uncertain.

For further analysis download the full report.

• Base Metals Market Update – July 2014 (PDF, 374KB)