March exports and imports both improved
Some equity valuation recovery amid stabilisation of physical prices
Copper prices stood out last week, appreciating about 5% week over week. This was mainly due to supply disruption. Aluminium prices and steel spreads also appreciated, albeit barely 1% week over week. Coal prices/paper spreads were the weakest, depreciating about 5% and 7%, respectively. Most equity valuations recovered slightly after the previous weeks’ deep drops.
Tug of war between supply disruptions/discipline and weak demand
In Q220, most sub-sectors will likely still be dealing with inventory, as weak demand and supply disruptions/discipline are still finding a new balance. We expect Chinese construction activity to recover well. Due to mediocre demand from manufacturing activities and weak export orders, the stability of copper, aluminium, and hot rolled coil (HRC) prices will still depend on supply disruptions/discipline. Similarly, more supply curtailments will be needed to prevent thermal coal prices from falling during the upcoming low season.