Value Microcaps Junior Miners

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Metals price risks stabilizing

Tuesday, August 21, 2007

Scotia Capital is saying price risks in the base metals sector have moderated, reflecting the “observed stability of the LME complex” in relation to other asset classes during the latest market turbulence.“Given China’s importance to demand growth, we continue to believe that only an (unlikely) sharp slowdown in U.S. growth could meaningfully alter our supply-demand outlook,” write analysts Onno Rutten and Lawrence Smith.

As a result, they increased their 2008 copper price forecast by 9 per cent to $2.40 (U.S.) a pound and lowered their zinc price forecast by 11 per cent to $1.20 a pound. On a micro level, they upgraded Lundin Mining Corp. and First Quantum Minerals Ltd to “sector outperform” from “sector perform,” based on recent share price drops and an improved copper outlook. They also upgraded FNX Mining Co. to “sector perform” from “sector underperform,” based on recent share price performance.

On the flip-side, HudBay Minerals Inc. was downgraded to “sector perform” from “sector outperform,” based on a dimmer zinc outlook, with Fording Canadian Coal Trust downgraded to “sector underperform” from “sector outperform,” based on the stock’s relative performance.

http://tdw.globeinvestor.com/servlet/ArticleNews/story/RTGAM/20070821/WBmarkets20070821141332/stocks....


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