Commodity Corner
Views on commodities and energy
Base metals ripe for downside corrections
After an interview this week for Reuters Investment Summit, Brian Fabbri, chief U.S. economist at BNP Paribas said he did not think gains in base metal prices over the last 3 months accurately reflect how weak fundamentals are, especially in the economies of major users U.S., Europe and Japan, adding that industrial metals prices would need to correct lower.
Asked whether growth in emerging economies would be enough to compensate for slowing in the U.S., he said: “No.”
Fabbri pointed out that emerging economies accounted for only about 25 percent of global growth and would not be sufficient to take up the slack in the sagging U.S. economy.
“Contrary to some people’s thinking at the start of the recession who thought there would be a decoupling of the U.S. from other economies like China that has not been the case,” the economist said.
