Good for nickelJan. 10 (Bloomberg) -- Aluminum, copper and zinc forecasts for this year were cut by UBS AG analysts, who cited ``softening demand growth'' for industrial metals.
Copper will average $3 a pound ($6,614 a metric ton), the bank's analysts led by London-based John Reade, said today in an e-mailed report. That's an 8 percent cut from an earlier forecast of $3.25, they added. The zinc estimate was cut by 23 percent and that of aluminum by 11 percent.
UBS's 2007 copper forecast of $7,165 a metric ton, made in January last year, was less than 1 percent shy of the actual average of $7,139 for the year.
``Softening demand growth in 2008 will likely result in tempered performance for the base metals and the strong likelihood for weakness in the first half of the year,'' the analysts said.
Industrial metals will be supported by rising cost pressures and limited supply going into 2010, according to the UBS. A demand recovery is expected next year, the bank said. Nickel and aluminum will benefit the most because their production costs are relatively higher than other industrial metals, it added.
The bank's metals preferences in order are: gold, platinum, molybdenum, nickel, aluminum, copper and zinc, the analysts said.
Below is a table of UBS metals forecasts. Aluminum, copper, zinc, lead, nickel and molybdenum are in U.S. dollars per pound, and the precious metals are per ounce.
2008 2008 change 2009 2009 change 2010
Old New Old New New
Aluminum 140 124 -11% 105 130 24% 140
Copper 325 300 -8% 190 340 79% 310
Zinc 150 115 -23% 100 140 40% 150
Lead 135 120 -11% 75 130 73% 140
Nickel 1,325 - 0% 900 1,500 67% 1,200
Molybdenum 30 34 12% 20 35 75% 30
Gold 760 825 9% 700 750 7% 720
Silver 15 15.1 1% 13.4 12.8 -4% 12
Platinum 1,450 1,520 5% 1,300 1,450 12% 1,375
Palladium 320 350 9% 280 - 0% 345
To contact the reporter on this story:
Chanyaporn Chanjaroen in London at
cchanjaroen@bloomberg.net
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MS