Deutsche Bank Raises 2009 Forecasts for Copper, Lead
By Glenys Sim
March 27 (Bloomberg) -- Deutsche Bank AG raised 2009 price targets for most base metals including copper on expectations the global economy will stabilize, while cutting calls for next year and 2011 on “a slower than previously expected recovery”.
Copper may average $3,288 a metric ton this year, 17 percent higher than an earlier forecast, the bank’s analysts led by Michael Lewis wrote today in a quarterly report. Still, the metal will average $4,189 a ton in 2010 and $5,071 in 2011, down 11 percent and 8.7 percent respectively from earlier predictions. Three-month copper has averaged $3,478 a ton this year in London.
Copper has risen about 43 percent since bottoming last December on investors’ expectations that demand may revive in the world’s biggest economies, including China. The rally has been aided by speculation China has been boosting stockpiles even as the U.S., Japan and Europe remain in recession.
Industrial-metals prices are establishing a “firmer footing,” driven by temporary factors such as Chinese strategic reserve buying and speculation demand in the Asian country is strengthening, Lewis wrote in the report.
China, the world’s biggest user of industrial metals, is showing signs of recovery, People’s Bank of China Governor Zhou Xiaochuan said yesterday. China’s internal consumption will pick up “sharply” in the second half, Fortescue Metals Group Ltd. Chief Executive Officer Andrew Forrest forecast today.
‘Supply Overhang’
Still, Deutsche Bank said it was worried the “increase in Chinese industrial activity during a year in which the country’s export destination economies are expected to report negative growth will lead to overcapacity and a supply overhang.”
Lewis and his team raised their forecast for nickel this year by 20 percent to $9,689 a ton. The forecast for next year was little changed at $9,921, and reduced 9.7 percent to $11,244 in 2010, according to the report.
The bank increased its prediction for zinc 5.3 percent to $1,155 a ton in 2009, while lowering estimates by 6.8 percent to $1,350 for 2010 and 9 percent to $1,786 for 2011. Lead may average 15 percent more than previously forecast at $1,070 a ton in 2009. The lead forecast for 2011 was unchanged at $1,168 and cut 10 percent to $1,124 for 2010.
To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net
Last Updated: March 27, 2009 03:46 EDT
