Copper prices are expected to rebound further in the coming months after heavy losses, a Reuters poll showed, as China unleashes more infrastructure spending and other stimulus for the economy.

Benchmark copper CMCU3 slid 36% in the four months after touching a record $10,845 a tonne in March on fears that a slowdown in China and a potential global recession would curb demand. It has since bounced back by about 10%.

“Industrial metal prices may have undershot as the market mood shifted sharply from extremely bullish to bearish,” said Julius Baer analyst Carsten Menke.

“While China’s lockdowns remain a wild card, we believe the worst in terms of Chinese growth is behind us.”

News of more infrastructure projects and support for China’s property market boosted copper prices this week.

The cash copper CMCU0 contract on the London Metal Exchange (LME) is expected to average $8,134 a tonne in the fourth quarter, a median forecast of 24 analysts showed, up 7% from Wednesday’s closing price.

Analysts expect a tight supply situation to ease, having marked down estimates for a global deficit this year to 30,000 tonnes, less than a third of the 110,000 tonnes forecast in the April poll.

CHINA ALUMINIUM GROWTH The price of aluminium also slid after touching a record peak and analysts expect a modest gain in coming months.

The LME price of aluminium – which is used in transport, construction and packaging industries – surged to a record $4,073.50 a tonne in March, but has since tumbled 40%.

The LME cash aluminium CMAL0 price is seen averaging $2,500 a tonne in the fourth quarter, about 3% firmer than the current price.

“High production growth in China and falling demand in the rest of the world may result in a surplus in the global market in the second half and especially in the last quarter of this year,” said independent analyst Goran Djukanovic.

Analysts have slashed their estimates for an aluminium market deficit this year by 90% to 205,000 tonnes compared to a forecast shortfall of 1.99 million tonnes forecast in April.

The market is due to shift to a surplus of 150,000 tonnes next year.

NICKEL SURPLUS Analysts also expect only a limited recovery in nickel prices after a wild spike in March to over $100,000 a tonne that spurred the LME to suspend trading and cancel deals.

Prices, which had surged on short covering on panicked buying due to Russia’s invasion of Ukraine have since fallen back.

Rising nickel output in top producer Indonesia is likely to dampen prices, while the stainless steel sector, nickel’s biggest user, is lacklustre.

“Stainless steel prices are falling, the mills are destocking, flagging further downside risk for the nickel price,” said Liberum analyst Tom Price.

Analysts expect LME cash nickel CMNI0 prices to average $22,000 a tonne in the fourth quarter, only 1% firmer than current levels.

The global nickel market is expected to see a surplus of 23,000 tonnes this year and oversupply of 50,500 tonnes next year. Source: Reuters (Reporting by Eric Onstad and Eileen Soreng; editing by Jason Neely)