INDUSTRIAL METALS

Industrial metals remain to be an emerging market story. 3 year and 5 year weekly rolling correlations show high correlation between the MSCI Emerging market index and most of the industrial commodities. As expected there is also high correlation between the industrial metals. Zinc, Copper and Lead are high correlated industrial metals.

3 YEAR WEEKLY ROLLING CORRELATION

5 YEAR WEEKLY ROLLING CORRELATION

Since mid-2011, most of the industrial metals had lackluster performance. Sideways/downwards price movements were similar to the MSCI Emerging Market index. Charts are suggesting that we are getting closer to the end of the medium/long-term consolidation periods. Lead, Zinc and Tin are completing their contracting ranges and breakouts should occur in the following months. Over the past few weeks Nickel had a strong run but it is still below its downward trend resistance. Both Aluminum and Nickel performed worse than Lead, Zinc and Tin. Breakouts on these industrial metals could result in a 3-4 year-long directional movements. Global growth and emerging market performances will depend on the direction of the breakouts in these industrial metals.