Deutsche Bank raises metals price forecast
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Global economic growth bolstering demand
Deutsche Bank AG, owner of Europe’s biggest securities firm, raised its 2008 price forecasts for copper, aluminium and lead, saying global economic growth is bolstering demand.
Copper for immediate delivery will average $6,614 a tonne in 2008, the bank said in an e-mailed report, 20 per cent more than its previous forecast.
The metal used in pipes and wires will average $6,830 this year, 9 pr cent higher than the previous forecast. It averaged $6,740 in 2006.
“Another year of above trend growth, despite the US weakness, is driving the commodity cycle against a backdrop of continued supply disruptions,” Deutsche Bank analysts including London Based Tama Willis wrote in the report.
The aluminium estimate for 2008 was raised 2 per cent to $2,285 a tonne because Asian demand is “pressuring prices to the upside”, Deutsche Bank said.
Aluminium for immediate delivery averaged $2,570 a tonne last year.
Mining stocks will benefit from “above trend” global growth this year and in 2008, driven by “strong emerging market demand” especially in China and India, the bank said.
Miners such as Rio Tinto Group, the third –largest mining company, will benefit because of growth prospects in iron ore and metals including copper, Deutsche Bank said. London-based Rio Tinto is the bank’s “top pick” in the industry while Vedanta Resources Plc, India’s biggest producer of copper and zinc, is favoured among “mid-cap miners.”
LEAD, URANIUM
Kazakhmys Plc, Kazakhstan’s biggest copper producer, was reduced to a “hold” from “buy” due to its lack of acquisition possibilities and on concern rising costs in the central Asian country will curb earnings, the analysts wrote.
Lead prices will average 26 per cent higher this year and 24 per cent higher next year because of supply disruptions and after China, the world’s largest supplier, increased taxes on exports on June1, Deutsche Bank said, without giving prices.
Exports from Ivernia Inc.’s Magellan mine in Australia, which accounts for 3 percent of the world’s lead supply, have been suspended since March due to an investigation into lead poisoning.
Deutsche Bank also raised its forecasts for uranium.
The nuclear fuel will average $122 a pound this year, up 31 per cent from a previous prediction, and $156 a pound in 2008, 56 per cent more than an earlier forecast, it said.
Uranium averaged $47.42 a pound in 2006. The bank left its nickel forecast unchanged.
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Source : Business Line |
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