Base metals markets much stronger now than last year - Metal Bulletin
Metal Bulletin's Raju Daswani predicts copper prices will remain on an upward trend, as tin retains the most bullish outlook of all the base metals.
Posted: Thursday , 21 Oct 2010
RENO, NV -
The Managing Director of the Metal Bulletin, Raju Daswani, says "the fundamentals of most base metals markets are significantly stronger than they were at any point last year, with copper and tin particularly tight."
In a recent presentation, Daswani advised, "These markets have already returned to supply deficits, as has nickel - lead will join them in deficit in 2011."
With a global copper supply deficit forecast for both 2011 and 2012, Daswani predicted copper prices "will remain on a broad upward trend. For 2011 our price forecast is $7,900/tonne compared to our 2010 forecast of $7,375."
The Metal Bulletin forecasts small deficits in nickel supplies in 2011 and 2012, "but beyond that the market should in theory be comfortably supplied. As such our forecasts are for a full year average of $21,550/tonne in 2010 and $22,350/tonne in 2011."
Meanwhile, Daswani anticipates further price gains for lead, forecasting "a rising trend on an annual basis from $2,100/tonne in 2010, $2,650/tonne in 2011 underpinned by a supply deficit."
The Metal Bulletin's bullish stance towards tin remains unchanged, Daswani noted. "It has the biggest supply-demand imbalance of all the base metals and arguably retains the most bullish outlook," he said
He predicted global refined tin consumption will rebound by 14.2% this year. Metal Bulletin's annual tin price forecast for this year stands at $19,950/tonne while next year's forecast is $23,300/tonne.
Daswani expects the aluminum market to remain in a position of oversupply between 2010 and 2012, "although the surplus will progressively decrease in size as demand starts to improve." He forecast an average aluminum price of $2,220/tonne for this year.
In his analysis Daswani noted zinc mine production is at a record high this year and at least 400,000 tpy of capacity sitting idle.
"Looking forward the outlook does improve with a tight concentrate market looming as major mines close in the coming years," he said. "This won't have an impact on the balance until the middle of this decade, although we think the tightness will start to get priced during late 2011 and 2012." Metal Bulletin's zinc price forecasts are $2,160/tonne in 2010, increasing to $2,750/tonne in 2011.
In their analysis, the Metal Bulletin assumes overall global economic growth will remain on track; the Eurozone sovereign debt fears have not yet gone away; and China's base metals demand growth remains strong.
Metatags: Metal Bulletin, base metals forecasts, copper prices, copper supply deficits, lead's bullish outlook, zinc oversupply, aluminum oversupply