Mineral Prices to Rise Before Fall, Says Survey(2007-2-1)
February 1, 2007
FORECASTS for commodity prices have edged higher amid expectations of a US downturn, an Access Economics report shows.
Despite warnings from Treasury that the mining boom is nearing an end, the December-quarter Minerals Monitor report suggests iron ore, gold, oil, platinum and uranium will continue to rise over the next year before falling away.
The report, which gives an overview of the world economy and the mineral price forecasts of 13 leading commodities analysts, predicts falls in lead, zinc, cobalt, nickel and copper over the next 2½ years.
It says the commodity price surge seen since 2003 will "take a breather" as the supply of minerals catches up with strong demand from growing economies such as China.
"A US slowdown poses less risk to commodity demand than in times past," the report says. "Although China is set to slow from here, it and other commodity-hungry nations will still drive industrial commodity demand forward at a good pace.
"Inventories are slowly being rebuilt for the likes of oil and copper and there is increasing evidence that 2007 and 2008 will see supply lift solidly, especially for some key base metals."
The report says that while iron ore prices are still rising, the consensus view of analysts surveyed is that prices will fall beyond 2009.
"The panel sees the coming fall in minerals prices as a slow burn, with most minerals expected to still be overvalued in June 2009 when compared to their long-term sustainable price."
The report says lead is now the most overvalued mineral and predicts its price will fall by 51 per cent over the forecast period of March this year to June 2009. "This large fall is largely due to the 38 per cent rise in lead prices in the December quarter," it says.
Zinc will drop by almost 50 per cent by mid-2009, cobalt will drop 46 per cent, nickel will fall almost 45 per cent and copper will dive 44 per cent. Price falls of more than 20 per cent are also expected for tin, coal, aluminium, silver, uranium and zircon. Rises are tipped for ilmenite (12 per cent) and rutile (5 per cent).
The report also provides strong upward revisions to earlier forecasts on oil, in light of the Organisation of Petroleum Exporting Countries cutting production [The Age News]. It goes without saying that the perfect cheap handbags uk needs the perfect jewellery to complement it and there is nothing to beat the classic handmade that are available in this brand. These replica gucci watches not only lend a great style to your personality but are also comfortable and a perfect choice to match with your apparel.