How Xstrata sees it ....
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FORECASTS
COPPER
Although slowing economic growth in the U.S. will lessen the demand for copper domestically this year, Xstrata’s analysis suggested that this will be offset by “continuing refined copper demand growth in China and Europe, together with an expected end to Chinese inventory de-stocking. These factors, together with the potential for further supply-side disruptions, should help support another year of strong copper prices.”
NICKEL
Demand for nickel from the non-stainless steel and in particular super alloy producers is anticipated to remain strong this year, Xstrata noted. “However, overall demand growth for nickel is expected to moderate somewhat during the year. In addition, with a number of major producers sold out and LME inventories at critically low levels, the nickel market will not be able to accommodate a deficit, and cannot sustain global nickel demand growth in excess of 4% year-on-year,” according to Xstrata’s analysis
“Importantly, while nickel supply is forecast to increase by 7% or around 95,000 tonnes in 2007, this additional supply will not be enough to satisfy anticipated demand, even when factoring in a decelerating economic cycle,” Xstrata said. “Under such conditions, the short and mid-term price outlook remains favorable with prices expected to remain well above long-term averages. The tightness of the market and further potential supply shocks are also likely to lead to price volatility in 2007.”
Xstrata noted that strong stainless production is expected to continue this year with China expected to increase production to 6.5 million tonnes this year. The long term forecast for stainless steel demand is forecast to grow at 6% annually.
VANADIUM (don't know what this is)
As the production of crude steel grows, so does the market for vanadium. Xstrata suggested that new vanadium supply is likely to come from two major Chinese producers and possibly from Western Australia at the end of this year.
The extended period of elevated vanadium prices is, however, resulting in predominantly temporary substitution in certain applications such as commodity grade rebar, according to Xstrata’s analysis. “It is anticipated that lower vanadium prices will result in reverse substitution. This is, in turn, expected to support prices and limit volatility in 2007.”
ZINC
The tightness in the global supply of zinc concentrate is anticipated to ease this year, Xstrata forecast, as new mines come into production.
“With the majority of zinc stocks depleted, zinc supply is expected to experience a small deficit in 2007, as new mine supply becomes available to increase refined metal production levels and almost meet forecast global demand requirements. Demand in China, India, South East Asia and Eastern Europe will continue to support steady consumption growth,” according to Xstrata. “Stocks are expected to remain low supporting a continued strong price environment in 2007.”
Complete blurb ..
mineweb.net
regards,
John |
