Copper values breached USD 6,000 per ton level in December while the prices remained confined in a narrow range for most part of the year, it said.
"The recent momentum is attributed to increasing optimism about a US-China trade deal. Although slowing Chinese economy has dented metal demand growth, supply issues in Chile has tightened mine output. Most Chilean mines are reporting 2019 output declines," Hitesh Jain, Senior Analyst - Institutional Equities, Yes Securities, said.
On the inventory side, global copper stocks remain low and are offering an element of support, as is the fact that market is expected to be in deficit both this year and in 2020, he added
Considering the prospects for next year, global aluminum markets are likely to witness a surplus of around one million tonnes, not an inspiring backdrop for prices, he said.
He said that zinc prices have shown a reverse trend going to back to a two-and-half-year low after reaching a substantial level in late October this year.
"After getting to a four-month high in late October, zinc has sharply reversed course to move around two-and-a-half year low of USD 2,190 per tonne at one point of time. Although refined inventory levels remain low, the demand side of the equation continues to dominate market attention. Production growth of zinc- galvanized steel has fared poorly, needless to mention overall deceleration in global industrial activity. Meanwhile, construction activity is expected to slow down in China," Jain said.
The International Lead and Zinc Study Group (ILZSG) expects global zinc markets to witness a surplus of 1,92,000 tonnes in 2020, when compared with a deficit this year, Jain added.
"LME Zinc prices are projected to decline steadily until 2021, with an average of USD 2,200 per ton seen for next year," Jain said.
He noted that global mine supply is expanding on the back of start of new mines and production capacity which will eventually lead to higher refined supply. SID RUJ RUJ