The key to a new metal price cycle is a positive growth surprise

John Robertson

PortfolioDirect

The key to a new metal price cycle is a positive growth surprise. Unexpectedly strong growth would boost sentiment but also help to soak up inventories and, where necessary, reduce excess capacity by catching producers off-guard. If producers are correctly anticipating the growth outlook and matching market needs, there is no reason for any cyclical adjustment. One indicator of the potential for surprise is the direction of IMF global growth revisions. The IMF has had to wind back its forecasts over the past four years. Forecast increases would normally imply better than currently expected outcomes. The IMF head has foreshadowed another downgrade in coming weeks: ...on balance, global activity is strengthening - but could be weaker than we had expected..., she said last week. This is the wrong direction.


2 topics

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.