PRESS ROOM
Are industrial metals behaving like growth stocks?
Friday 01st July '22
Industrial metals have given back their first quarter gains and are now down year to date. The second quarter has been a challenging period for the sector and started with much of the geopolitical risk premium eroding from prices. Prices have continued to decline as slowdown in demand from China (as evident from contractionary Purchasing Managers' Indices (PMI) numbers since March) has weighed on sentiment. Going forward, the growing risk of recession could continue to weigh on sentiment. Industrial metals are somewhat behaving like growth stocks in the current environment, and understandably so. The sector has an element of cyclicality given its strong connection with economic activity and an element of growth given its demand prospects from the long-term energy transition theme. The dampening of risk sentiment has hurt industrial metals on both fronts.