Bloomberg reported that JPMorgan Chase & Company raised forecasts for prices of industrial metals on prospects for a H2 rebound in demand driven by expanding worldwide factory output.
Mr Michael Jansen an analyst at JPMorgan in London said that copper will average USD 4,775 per tonne in 2009, 16% more than predicted in May. The bank raised its forecast for nickel’s average price this year by 30% and also increased estimates for aluminum, zinc and lead, while reducing projections for gold and silver.
Mr Jensen said that Worldwide industrial production is set to expand at a 7% annualized pace in this year’s last 6 months. Base metals may be able to keep rising through the end of 2009 as a result, as the process of inventory restocking that has buoyed prices this year moves on from China to other nations.
He said that “The next 6 months is likely to deliver an environment in which a process of rolling restocks takes place, delivering a tsunami of consumer activity throughout the pipeline. This has largely been completed in China and is now moving east into non China Asia and likely to reach the Americas in the current quarter or next 3 months.
JPMorgan said that copper which has gained 83% this year in London is its favored base metals exposure over the longer term and will average USD 5,563 per tonne 2010.
It said that Nickel will average USD 15,556 per tonne this year. Aluminum, utilized by industries from packaging to aerospace, will average USD 1,608 per tonne up 11% from previously.
The bank raised its average 2009 estimate for lead by 17% to USD 1,498 per tonne and increased its projection for zinc by 13% to USD 1,517 per tonne.
JMMorgan said that gold will average USD 939 an ounce this year down 2.1% from May’s projection. The bank left its 2010 forecast unchanged at USD 950, while reducing this year’s estimate for silver by 0.9% to USD 13.90 an ounce.
According to Merrill Lynch & Company, the LME’s index of 6 industrial metals has advanced 55% in 2009, beating the 8.7% gain by the Standard & Poor’s 500 Index of shares. US Treasuries have returned a negative 4.9%.
Copper for 3 month delivery traded at USD 5,638.25 per tonne at 10:30 Am on the London Metal Exchange, while nickel was at USD 17,010 per tonne. Lead was at USD 1,805 per tonne, zinc traded at USD 1,721 per tonne and aluminum was at USD 1,855 per tonne.
(Sourced from Bloomberg)
