Reuters has updated its survey of base metal price forecasts for 2009 and next and carried out its annual survey of long term price forecasts.
Below are comments from analysts on industrial metals.
1. Mitsui Bussan - The outlook for metals demand for 2010 is improving as global economies react to the coordinated impact of government stimuli. Mitsui expects a recovery in Chinese exports to enable gross domestic product to achieve double digit growth in 2010. Mitsui expects Chinese apparent consumption to grow by as much as 43% for nickel and 34% for copper in 2009. Although market balances point to surpluses in 2010, Mitsui is not pessimistic for the outlook for prices in recognition of the resurgence in investor interest in commodities in general and metals in particular.
2. JPMORGAN - Record levels of imports of base metals helped sweep away the excess of material that otherwise would have accumulated in a visible manner. In the absence of aggressive Chinese demand and extremely patchy western world demand it is likely that LME inventories will tick higher in the next 1 to 2 months if not 2 to 3 months. This is going to be a significant hurdle for the market if there is an attempt to maintain prices in current ranges.
3. CALYON - Real demand remains weak but restocking is providing a boost as consumers replenish depleted supply chain. As their order books fill, fabricators will restock along the manufacturing chain. China is the only growth area for consumption reflected in strong refined imports but the worst is over in N America and Europe. Prices trading above fundamentally justified levels based on supply and demand. Speculative and investment buying has lifted prices on expected economic recovery and a pick up in copper demand.
4. Standard Bank - The improving economic outlook, the resumption of positive base metals demand and ongoing inflows of money into commodities will in general, be the main themes for the coming year. It will not be an easy path and much still depends on availability of credit and the general public's willingness to spend. The H1 of 2010 may therefore disappoint as the market waits for the recovery to bear fruit.
5. Commerz Bank -While production problems in Chile and a shortage on the copper scrap market constrained the copper supply, global consumption remained at 2008's levels, thanks to the rapidly risen demand in China. Optimists are now referring to relatively low inventories and expect, on the back of a global economic recovery, copper prices to continue to rise. The latest trends point towards falling copper prices, as on the demand side, the price-supporting import pull from China, as seen in July and August, has weakened.
6. RBC Capital Markets - Global economic leading indicators continue to improve, pointing to a rebound in activity over the next 6 to 12 months. However, global copper demand remains weak. We forecast a decline in global consumption of 3.2% in 2009, followed by a rebound of 9.5% in 2010, 5.7% in 2011, 4.0% in 2012 and 2.7% in 2013. Mine capacity remains the bottleneck. We forecast a decline in global refined copper production of 2.4% followed by growth of 7.0% in 2010, 4.7% in 2011, 4.8% in 2012 and 3.4% in 2013.
