Base metal prices have been on a tear.

Aluminium, lead, copper, zinc and nickel miners/explorers all making hay while the electrified geo-political sun has been blazing.

And as a basket of hard asset tokens, they have experienced an unbroken record of commodity price increases since pandemic May last year.

But in June, the base metals price index decreased by 1% in SDR terms (SDR mutes exchange effects) making this the first monthly Index decrease in 13 months. In fact, in AUD, USD and SDR terms it was down for the first time in a long while.

That’s notable.

A lower bipartisan spending proposal in the U.S. with way less spending on renewable energy; China’s production index sub-category of the PMI for April, May and June being well below trend; and some destocking and bear frontrunning (noting the OECD’s forecast for a 24% drop in global growth from 5.8% in 2021 to 4.4% in 2022) might have driven some of the reversal.

Then again, one month does not make a trend, so maybe it’s just a cyclical drawdown?

Stay tuned.

Mike.