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The latest projection from the bank reflects similar sentiment from the International Monetary Fund, which last week projected a global GDP contraction of 3%, labelling the crisis the "Great Lockdown".

Both forecasters tentatively expect a recovery in 2021, with BoA projecting global GDP growth of 6.4% and the IMF forecasting a 5.8% rebound next year.

However, all is not plain sailing and BoA is starting to think the base case scenario for global economic recovery might be the best case too, and worse, it has added a third, darker potential scenario to its outlook entailing rolling lockdowns where governments are unable to control the widespread virus into 2021.

The bank said a second scenario, where consumer behaviour shifts (voluntarily or not), could result in a structural drop in travel around the world and underpinned the group's less-than-optimistic baseline oil demand forecast for 2021.

"A structural drop in travel and a further dismantling of global supply chains would have very important macro as well microeconomic implications for global markets, including commodities," BoA said.

"This scenario would likely result in permanent oil, copper, or power demand losses, even if the pandemic comes under control and an economic recovery takes hold.

"Yet, a third scenario … is perhaps the most concerning. An economic recovery would simply keep getting deferred until an effective vaccine is available, presumably sometime in 2021."

BoA expects each of the outcomes will likely have "extremely important" economic implications for global markets, including commodities.

The transport and hospitality sectors are among the worst affected by COVID-19, as the lockdowns have impacted mobility the most. Data shows industrial production seems to have contracted less than the GDP in many countries, partly because demand for consumer products and other items has held up relatively well during the crisis.

Yet metals consumption is falling sharply for the time being due to slower construction and car manufacturing activity and limited infrastructure spending. Demand for raw agricultural commodities is also taking a big hit, in part due to a connection to corn and sugar-based ethanol fuels and in part as a result of meat plant closures.

In BoA's baseline scenario, global oil demand contracts by 9% in 2020, while global natural gas demand drops by just 0.3%, coal by 4% and electricity by 5%. Consumption of copper, aluminium and steel could fall by 14%, 21% and 24%, respectively, without any fiscal support.

"Even then, China has already started to implement some [stimulus] and others may follow. Thus, metals could end up being the biggest beneficiary from fiscal stimulus and a normalisation of economic activity," analysts said. "Looking into 2021, oil demand would return to 100 million barrels per day in the back-to-normal scenario, 96Mbbl/d in a "corona new normal" preference-shift scenario, and drop to 86Mbbl/d in a rolling lockdown scenario.

Analysts flagged a collapse in car manufacturing in China weighing on demand for industrial metals such as copper in the country, although it has bounced back quickly in April as the lockdown was eased. Big infrastructure plans and virus-related supply disruptions could support metals prices.

Negative outlook

Meanwhile, Fitch Solutions has revised down its mineral production forecasts for a significant number of countries across several base metals over recent weeks. It now expects global output of iron and lead to show tepid growth in 2020, or as is the case for copper, nickel, tin, thermal coal, coking coal and zinc, to contract.

It said its forecasts would "very likely" continue to evolve to the downside as the team continued to revise individual countries' data in the coming weeks.

Fitch now forecasts global copper production to contract by 0.2% in 2020, compared with the previous forecast for 1.4% growth, as lockdowns in multiple top-producing countries stifle growth. Notable adjustments included Peru (second largest producer), China (third), the US (fourth) and Mexico (eighth).

Fitch expects 2020 copper output to contract to 20.48 million tonnes, and expand 4% in 2021 to 21.3Mt.

"Given the timing of the closures globally, we expect these contractions in copper concentrate production will be primarily felt in the second quarter (and somewhat felt in first quarter), then expect production to pick back up over the second half as lockdown measures are eased. Nonetheless, we no longer expect the resumption of operational activity over the latter half the year will be able to offset current expected declines in global copper mine production," Fitch analysts said.

Fitch also lowered its zinc production forecast, tipping into a slight contraction for 2020 as the forecast fell from 1% growth to a 0.2% contraction to 12.5Mt, based on government measures and a depressed metal environment resulting in mine closures. Production is expected to recover 2.2% in 2021 to 12.8Mt.

"We currently expect the impact of the coronavirus on production will be primarily felt in the first half and see output recovering over the latter half as virus containment measures impacting the mining sector are relaxed."

Nickel output is seen dropping 16% this year to 2Mt, and recovering by 6.5% in 2021 to 2.2Mt.

Bauxite is an outlier, expected to see 9.2% growth this year to 353.5Mt and adding another 5.4% in 2021 to 372.7Mt.

However, the COVID-19 situation remains fluid, and Fitch sees "significant further downside risks" to its production forecasts for the year.

"A resurgence in the pandemic, the extension or re-imposition of lockdown measures, or firms voluntarily reducing operations would lead to further disruptions to mining output," Fitch said, adding weakened base metal prices might disincentivise companies from ramping up production rapidly or to full capacity, even if lockdown measures were lifted.

Fitch warned its projections for 2021 were subject to upside risk due to low base effects and as projects set to come online in 2020 could be deferred to 2021.