Having followed everybody else (in previous years) with producer projections initially, and then having to revise down, we thought this year we're going to start by being pessimistic and hopefully it will come right, we have always been quite cautious about how strong supply was going to be this year simply because the record has been so bad over the last few years.

Caroline Bain

Categorized in : Energy

Of course, there are implications for EU growth, which would be negative for metals, and a strong dollar is another negative, but I suppose since because China is primarily the main demand force for industrial metals, there's the feeling it's not going to have a massive impact on the (supply-demand) fundamentals.

Market sentiment has been up and down like a yo-yo recently and for the next few days it will focus on the Brexit vote. We still believe that it is more likely the remain side will win.

I always make the point that there is a certain amount of zinc sitting out there that is unknown. It (the inflows) certainly could undermine what has been a sentiment-fuelled rally.

The demand side is quite subdued, although there are some early indications that the electronic sector could be picking up.

We think the fourth-quarter (China economic) numbers will pick up as a result of the stimulus we've seen. We're coming to the end of a seasonal lull and it (stimulus) takes time ... to feed through to real demand for metals, whether the Fed hikes tomorrow or not, it's hard to see a massive reaction either way. We've had so much warning this year that the big move in the dollar could be behind us.

The devaluation will make commodities more expensive for China to import, so I would imagine that is the main reason for the negative reaction.