Moody's Investors Service on Wednesday said it has lowered its outlook for the global base metals industry to negative on slowing global growth due to the spread of new coronavirus (Covid-19).

"Our outlook for the global base metals industry is negative. This outlook reflects our expectations for the fundamental business conditions in the industry over the next 12 to 18 months," Moody's Investors Service said in a statement.

"Purchasing manager indexes (PMI) in the second half of 2019 were relatively weak as trade tensions between the US and China and slowing demand globally caused contraction," it said.

The US and Europe hovered around 50 in February 2020 while China's PMI dropped to 35 with the outbreak of the coronavirus in Wuhan.

With the coronavirus spreading and being deemed a pandemic, concerns over global economic growth decelerating have only increased.

"Moody's global macro outlook 2020-21 (March 2020 update) indicates simultaneous supply and demand shocks are likely to materially hurt the global economy, particularly through June 2020," it said.

The revised forecast puts US GDP growth in 2020 at 1.5 per cent, the Euro area at 0.7 per cent, China at 4.8 per cent, and overall G-20 countries at 2.1 per cent.

"We caution that there is a higher than usual degree of uncertainty around our forecasts," it said.

The longer the outbreak affects economic activity, the higher the risk that demand, supply and financial shocks from the outbreak will reinforce each other and lead to recessionary dynamics in many affected countries.

As manufacturing activity slows globally, supply chain and logistical disruptions spread, and consumer confidence and spending wane, downward pressure will remain.

China accounts for at least 50 per cent or more of the global consumption of aluminum, copper, and nickel, and about 48 per cent for zinc.

Economic expectations strongly influence price movement.

For most of 2019, prices traded lower from 2018 and relatively sideways reflecting trade tensions between the US and China.

The modest upward bump, seen late in the year with the announcement of the US-China 'Phase one' trade deal, reversed in January with the outbreak of the coronavirus in China.

Stimulus activity in China and potentially in other regions have provided some uplift to prices, but volatility remains high and downward pressure has resumed as the coronavirus has spread globally, it added.