The base metals complex has made a very encouraging start to the year. As shown below average prices for the first quarter were, with the exception of tin, notably higher than in the fourth quarter of last year. As we also note on pages two and three of this publication, there appears to be sound prospects for further recovery in metals prices. However, whilst a number of the forward looking indicators are pointing to fresh gains in the next two quarters there are clouds on the horizon. These notably include the risks of increased Middle East tension sending oil prices surging, and ultimately dampening the prospects for LME prices. At the same time, LME stocks are in most cases notably higher than at the end of last year and this is likely to have a bearish impact on prices in the second quarter if consumer demand does not rebound strongly.
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