SLI expects industrial metal rally to stall

The rally in industrial metal prices could stall in coming months as demand from China dwindles, Standard Life Investments warns.

SLI global thematic strategist Frances Hudson says the country's "strategic stockpiling" of aluminium, copper and iron ore may be close to completion. "Rising prices will prompt a return to local production of copper, iron ore, zinc, and, when global demand picks up, China is likely to resume exports," she adds. "Recent comments from some basic materials companies and their industrial customers indicate reservations about the sustainability of the rally." But Hudson adds she is bullish on long-term demand for the commodities, driven by developing market industrialisation.