Metal stocks: Bulls have upper hand, Copper at a five-year high

Demand-supply scenario is favourable and should keep prices elevated

After a few weeks of uncertainty, the global commodities markets have seen a new rally in industrials. Traders have to weigh up two opposing chains of logic. The pessimists expect China to see a slowdown in growth, or a growth-reversal if the real estate bubble bursts, given defaults by Evergrande, and high levels of debt. Economic activity in the global economy is also slowing, going by downgrades in the International Monetary Fund’s projections.

The optimists, on the other hand, see a squeeze on the supply side, coupled with demand that remains robust, even if it is somewhat lower than earlier