Here follows an excerpt of our January 2011 Aluminium and Copper prices forecasts as a sample of our services to foreign companies (among which there are some multinational entities). At the present time our research department is processing the 2012 scenarios and base metals prices forecasts. Any interested companies may ask to receive our past analysis for an overview, whilst booking the 2012 yearly/monthly reports. Nevertheles our weekly analysis on all non forrous metals and steel is only available in italian.
COPPER AND ALUMINIUM ONE-YEAR ANALYSIS
(Monthly Reviewed) January 2011
Yearly price range for Copper (3 months LME): $ 9.800-7.000
Aluminium: $ 2.540-1.750
Other metals yearly ranges forecast (January 2011):
LME 3 months
Steel: $ 600-500; Nickel: $ 27.400-18.800; Zinc: $ 2.330-1750
Lead: $ 2.520-1.750
– Monetary policy of China, India, Brazil has been evolving exactly according to our forecasts during the last quarters. The rise of inflation in many countries (particularly in the food component) is leading the hand of central bankers and we believe we are only at the beginning of a long period of tightening monetary policy. The growth of consumer prices, especially in emerging economies, will be reflected in the final prices of exported goods, generating higher inflation risks in U.S. and Europe, with serious consequences for the future of Fed and ECB monetary policy.
– The situation of the non official stock of some commodities and base metals stored on the Chinese market looks much less positive for the prices than the one of the official stock at the main exchanges, generating doubts about real consumption, while the high prices could be affected by trading and financials factors.
– The economic situation in China is likely to deteriorate during the forthcoming quarters, particularly for what concerns the real estate sector. The Chinese banking system might be put under pressure because of over-investments due to Government stimulus plan. A series of fiscal and financial measures has recently been adopted to curb the exuberance of the housing market.
– The outlook for the global automotive market could be adversely affected by the rise of interest rates, especially in the emerging economies.
– The debt crisis in the euro zone will continue to hamper a widespread economic recovery, as the activity in the less virtuous countries will be affected, restricting the growth of the area as a whole.
– The signals from the U.S. housing market, particularly the heavy stock of unsold homes and the dynamics of prices would not suggest an imminent end to the difficulties of the economy.
– In case of a slowdown of emerging markets and other international risk situations, the money flows could head towards the U.S. again, as already happened in the past, also during the nineties, in absence of alternatives, with the result of a support to the American bourses (and economy).
– Asia is trying to mitigate the consequences of the European crisis and thus support the countries with the strongest commercial interest. The euro is enjoying the continued support of some major central banks (especially China and Japan) which have prevented the single currency falling even in the most difficult moments of the crisis. Regular purchases of euro for currency diversification (central banks) have emerged at the 1.3000-1.2900 levels.
– Some financial factors are probably distorting the supply-demand ratio and giving a wrong perception of the economies’ perspectives. Continue…