Metals Prices Seen Rising Until End 2001, Credit Lyonnais Says
5/24/0 11:31 (New York)
Metals Prices Seen Rising Until End 2001, Credit Lyonnais Says
London, May 24 (Bloomberg) -- Metal prices will rise during
the next eighteen months thanks to growth in the world economy,
said Credit Lyonnais Rouse Ltd, the metals broking division of
France's fifth largest bank, in a report.
Expanding economies in Asia and Europe will boost demand for
industrial metals, such as copper and nickel, said Maqsood Ahmed,
an analyst at Credit Lyonnais, even if concerns that further
interest rate rises could hamper economic growth in the U.S.
``We're still looking at a very strong U.S. economy,'' Ahmed
said. ``Growth is slowing to 3 percent a year, which for a mature
economy is still quite phenomenal.''
Since the start of the year metals prices have been volatile
on concerns U.S. economic growth will slow. Copper reached a high
of $1,945 a metric ton in January and a low of $1,639 a ton last
month before reaching $1,825 today. Investors will benefit from
higher prices for the next 12 to 18 months, the report said.
Aluminum may increase by as much as $400 a ton in the next 18
months, Ahmed said, from about $1,500 this month. Key to prices
will be demand and whether reorganization in Russia, which has
seen 75 percent of production grouped under one company, will
affect supplies.
Aluminum demand is expected to outstrip output this year and
in 2001 by about 400,000 tons, the report said. World consumption
may grow at 5.7 percent this year and 3.4 percent in 2001.
Copper may gain to $2,500 a ton next year from $1,825 a ton
now as inventories continue to decline on higher demand from Asia.
Global copper use is increasing by as much as 5 percent, with
demand from China surging 10 percent, the report said. Copper
stockpiles on the London Metal Exchange are currently at their
lowest level since January 1999.
Steelmakers
The steel industry is likely to help push zinc and nickel
prices higher, the report said. Zinc could rise to between $1,300
a ton and $1,500 a ton from $1,182 partly on rising demand from
steelmakers, which use the metal to protect products from rust.
Production from the stainless steel industry, which is up 11
percent in the year to date, could also boost nickel prices,
pushing the metal as high as $15,000 a ton from $10,230 today.
Nickel prices have already doubled in the past year as
supplies on the LME have dropped to their lowest level since March
1992. Inventory levels could fall to their lowest since 1989 as
demand rises and new production from Australia fails to come on
stream as quickly as traders anticipated.
--Christopher Evans in the London newsroom (44) 20 7673 2645 or
cevans@bloomberg.net/jxc |
