InvestorQ : Is the price of base metals also influenced by speculative factors or is it only by demand and supply factors?
sara Kunju made post

Is the price of base metals also influenced by speculative factors or is it only by demand and supply factors?

Answer
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Mahima Roy answered.
2 years ago


The demand supply situation in most metals has shifted in favour of demand. That has induced large global funds to start building long positions in base metals. Many large macro funds have also been buying aggressively into base metals. In addition there are also short positions that were built in base metals from the top of the cycle. These shorts are now beginning to cover and are likely to cover more aggressively as prices move up. That could also provide support to base metal prices.

The supply deficit situation in the base metals market is currently driving up the prices. But there is also a demand-pull factor. If that picks up steam, then base metal prices could be in for a much longer rally!