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S&P more positive about nickel and copper

Metal News - Published on Thu, 12 Jul 2018

Image Source: Mining Journal
Mining Journal reported that both metals have been battered in the past month as US president Donald Trump ramps up a trade war with China. S&P said that "Demand fundamentals remain favorable, but the rise of global interest rates and trade tensions between US and China may exacerbate price volatility or hurt medium-term fundamentals."

S&P said that "Still, we expect GDP growth in the US approaching 3%, in the Eurozone near 2%, 2.5% in Latin America, and 6% to 7% in China while that country adheres to stricter environmental standards.

S&P said that "These GDP forecasts are beneficial for industrialised metals such as iron ore, copper, nickel, and zinc."

Forecasts for most metals remained unchanged, except for nickel and copper.

Copper had previously been expected to average USD 6,400 per tonne this year, but S&P has upgraded that to USD 6,600 per tonne for the remainder of the year.

The red metal has averaged USD 6,898.62 per tonne so far this year and last traded at USD 6,382.75 per tonne.

S&P has lifted its 2019 forecast copper price to USD 6,800 per tonne from USD 6,600 per tonne and its 2020 outlook to USD 7,000 per tonne from USD 6,800 per tonne.

S&P said that "Once again, we moved up our price curve for copper, reflecting more consensus around potential deficits in 2019-2020."

S&P said that "Our expectations of global economic growth and consistently strong industrial demand from the largest economies, especially China, will likely put increasing pressure on producers that are having difficulty expanding supply at a faster pace.

S&P said that "On top of that, potential disruptions from new technologies, such as electric vehicles and other power storage uses, may boost demand beyond our forecast horizon."

S&P expects mine supply to grow by 0% to 2% over the same period.

It said that "This small increase is due to continuing trends of declining grades, environmental issues, and a relatively modest project pipeline."

S&P's nickel forecast is also below the average price for 2018 so far.

It lifted its 2018 price forecast to USD 13,000 per tonne from USD 12,000 per tonne, which is still well below nickel's year-to-date average of USD 13,875.10 per tonne.

Source :

Posted By : Joykumar Irom on Thu, 12 Jul 2018
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