August 10 (Reuters) - Base metals prices have surged this year as positive expectations of a global economic recovery, combined with fund and Chinese buying, helped boost prices.
Copper has gained about 100 percent in 2009, while aluminium has climbed around 30 percent despite the latter’s London Metal Exchange inventories remaining at record levels.
Detailed below are some of the revisions and forecast price changes of base metals traded on the LME.
ROYAL BANK OF SCOTLAND (August 7)
* “Once real demand recovers alongside an upswing in the business cycle in 2010, restocking through the depleted manufacturing supply chain is likely to accelerate demand growth, and supply and demand fundamentals will once again drive the metal markets.”
* “Should risk (appetite) continue to rally into Q4 metals will undoubtedly be swept higher, but there could still be a correction should risk sell off.”
* Forecasts copper at $4,200 a tonne in 2009 and $5,500 a tonne in 2010.
* Sees aluminium at $1,550 a tonne in 2009, and $1,875 next year.
FAIRFAX (August 6)
* “China is the main driver for copper demand. According to our projection Chinese copper demand (including SRB purchases) will grow from 5.15mt or 28 percent of world demand in 2008, to 6.34mt or 35 percent in 2009 and to 8.03mt or 38 percent in 2014.”
* Forecasts copper to trade between $4,500 a tonne and $6,500 a tonne in H2 2009, and between $4,000 and $6,000 a tonne next year.
BANK OF AMERICA MERILL LYNCH (August 5)
* “The sharp price gains in metals were influenced by an anticipation that the global economy will recover and fundamentals will strengthen.”
* “Factors like China’s healthy metals demand have also contributed to the appreciation. We note that stocks normally build during an economic downturn, but this has happened only to a very limited extent for most base metals this time around.”
* Changes 2009 price forecasts for aluminium, copper, nickel and zinc from $1,500 a tonne, $3,900, $12,500 and $1,400 to $1,660 a tonne, $4,730, $14,370 and $1,480 respectively.
* For 2010, the bank upgrades aluminium, copper, nickel and zinc from $1,600 a tonne, $4,400, $14,000 and $1,750 to $1,750 a tonne, $7,000, $18,500 and $1,800.
JP MORGAN (July 27)
* “Underpinning base metal demand in H2 will be the onset of restocking across the industry pipeline, with fabricators having run down their working inventory levels aggressively over the past 12 months.”
* “Copper remains our favoured base metals exposure over the longer term, the copper market moving into protracted supply deficits from 2011 onwards.”
* Expects copper to average $4,775 a tonne in 2009, against a May forecast of $4,111 a tonne. Aluminium to average $1,608 in 2009, down from $1,450 previously.
* Expects copper to average $5,563 a tonne in 2010, against a May forecast of $4,600 a tonne. Aluminium to average $1,775 in 2010, down from $1,638 previously.
Reporting by Michael Taylor; editing by Keiron Henderson
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