LME WEEK 2016 - Nickel, copper seen rising in 2017 - Macquarie survey

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Archie Hunterarchie.hunter@fastmarkets.comDeputy Head of Physicals+44 (0) 20 7337 2143

London 31/10/2016 - Delegates at Macquarie's LME Week Base Metals Outlook Seminar expect copper and nickel to be the bull markets for 2017 despite their comparatively poor performances in the year to date.

Around 200 delegates from the metals and mining industries voted in the poll after a series of presentations on the global base metal markets.

And more than 50% of voters expected copper prices to move above $4,900 per tonne by this point next year, including 33% who predicted it will riser to $5,200 per tonne.

Copper prices have dropped 13.5% since the same poll was conducted last year - the LME three-month price opened trading on Monday October 31 today at $4,825 per tonne.

Some 46% of voters predicted that a resurgence in supply disruptions would lead copper out of its current range, with 28% fearing that Chinese demand could be weaker than expected.

Delegates were also bullish on nickel - a massive 79% see prices rising to $11,000 per tonne at this time next year, including 46% at $12,000 per tonne.

A potential export ban in the Philippines, the closure of loss-making capacity and continued growth in stainless steel output were the reasons given for a recovery in prices.

Delegates were less enthusiastic about 2016's star performer, zinc, pulling off a similar price gain in 2017 - 37% see prices rising to $2,500 at the point of next year's summit.

Zinc prices are up more than 50% since the start of 2016 but hanging over the market are concerns that miner-trader Glencore could  restart shuttered capacity at some point.

But aluminium was again a bone of contention, with 50% of voters said that they would like to be short on aluminium over a 12-month month view, with 31% seeing prices of $1,600 per tonne in a year's time.

Maquarie head of base metals research Colin Hamilton pointed out that attendees at last year's summit were similarly gloomy, predicting that the metal would be at $1,528 per tonne at this time - its is trading around 16-month highs just below $1,740 per tonne, basis three months.


(Editing by Mark Shaw)

 

 

 



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