UPDATE 1-Goldman cuts 2009 base metal price forecasts

 (Adds detail)
 LONDON, Dec 12 (Reuters) - U.S. bank Goldman Sachs GS.N
said on Friday it has cut its forecasts for base metals because
of the sharp deterioration in global industrial output and the
worsening demand outlook in 2009.
 The three-month forecast for aluminium MAL3 traded on the
London Metal Exchange was cut to $1,300 a tonne from $2,020
previously, copper to $2,700 from $3,835, nickel to $8,000 from
$11,095 and zinc to $1,080 from $1,310, it said in a note.
 "Although the rebalancing process is already underway with
deep cuts in mine and smelter production...we expect substantial
surpluses across most metals to continue to pressure prices
lower from current levels in the short-to-medium term," it said.
 Many producers have been forced to cut output and postpone
future projects in response to the slump in demand and as the
drop in metal prices has put pressure on marginal costs.
 The bank said it believes the fundamentals are strongest for
zinc, which is used to galvanise steel, and the weakest for
 "Historically, zinc demand has tended to fair better during
economic downturns," it said.
 It expects demand for aluminium in 2009 to fall 1.7 percent
year on year.
 Aluminium is used transportation and construction, two
sectors heavily hit by the global economic slowdown.
 Goldman slashed its 2009 average price forecasts for
aluminum, copper, nickel and zinc to $1,410 a tonne, $2,950,
$8,980 and $1,150, from $2,310, $5,230, $12,735 and $1,475
 "We anticipate that declining borrowing costs, tightening
supplies and some stabilization in demand will lead to
sequential improvement in prices by late in the year, but
anticipate that large surpluses and high inventories will
largely persist," it said.
 Following is a table of new and old three, six and twelve
month price forecasts. All prices are dollars per tonne.
             3 months         6 months       12 months
             Old  New         Old  New       Old   New
 LME Aluminum   2020 1300        2200 1380      2800 1500
 LME Copper     3835 2700        4875 2850      7500 3200
 LME Nickel    11095 8000       12125 8750     15500 9700
 LME Zinc       1310 1080        1415 1140      1750 1235
 (Reporting by Pratima Desai and Julie Crust; editing by Peter