Base metals may continue to rise in 2011 as strong demand in developing economies will more than offset slower growth in advanced economies, French investment bank Natixis.
Tight supplies in the copper and tin markets make them the best positioned to make record highs next year, while increasing production of aluminum and nickel will leave these markets oversupplied, Natixis said in a report released to coincide with the annual London Metal Exchange Week in London.
"[The] industry is struggling to increase [the] supply of tin, and new copper mines will not add substantially to supply until 2013 at the earliest."
Natixis forecasts copper prices will average $8,300 a metric ton in 2011, and may rise to a record $9,000/ton in the second half of the year. Tin prices should average $24,500/ton, it said.
The zinc market will swing into a deficit of 175,000 tons on a recovery in demand for zinc in the advanced economies' construction sectors. The tighter market should lift prices to an average of $2,450/ton, the bank said.
Nickel prices will average only slightly higher than current prices at $24,000/ton, as demand isn't likely to grow as quickly as supply, a reversal to this year's trend.
Aluminum will underperform most other metals, weighed down by extremely large inventories at exchange warehouses. However, Chinese government efforts to increase energy efficiency appear to have restrained aluminum production growth, it said. Natixis forecasts aluminum to average $2,400/ton next year.
The bank predicted that lead will average $2,400/ton, underpinned by tightness in the lead concentrate market.
source: Dow Jones |
