Copper and nickel forecasts article...Australia Raises Copper, Nickel, Price Forecasts on Supply
By Tan Hwee Ann
Sept. 25 (Bloomberg) -- Copper and nickel prices predictions were raised for 2006 and 2007 by the Australian government's commodity forecaster, as mines supply fail to keep pace with global demand.
Labor disputes and low stocks are boosting prices for the two base metals, the Canberra-based Australian Bureau of Agricultural and Resource Economics said today in a quarterly statement. The bureau raised its copper prices prediction for 2006 and 2007 by 12 percent and 13 percent respectively.
Copper, nickel and other metals rose to records this year, bolstered by economic growth in China that fueled demand for autos, homes and appliances. Labor strikes at mines owned by companies including BHP Billiton Ltd. have cut supplies.
``Given the tight supply-demand, the potential impact on supply from industrial activity at a number of major mines in South America is expected to provide further support for copper prices,'' the bureau said in a report on its Web site.
Mining companies including Chile's Codelco and New Orleans- based Freeport-McMoran Copper & Gold Inc. have had output disruptions. Codelco, the world's largest copper producer, is facing labor wage talks at its Andina, El Teniente and Chuquicamata mines later this year.
The bureau said copper prices, used in pipes and wires, may average $6,840 ton, or $3.10 a pound, for 2006, compared with a June forecast of $6,120. It expects an average 2007 price of $6,250, compared with an earlier prediction of $5,550.
Aluminum, Zinc
The price of nickel, used in the making of stainless steel, may average $22,000 a ton this year, 33 percent higher than its June prediction of $16,600, the bureau said. Nickel prices may average $18,900 next year, up from an earlier forecast of $13,700 for 2007.
Prices ``reflect ongoing strength in stainless steel consumption, particularly in China with its rapid industrialization, combined with expected slow supply growth at mines and refineries around the world,'' the bureau said.
The price of aluminum, used in cars and planes, may average $2,500 a ton for 2006, up from an earlier prediction of $2,390 a ton. It may average $2,225 for 2007, up from $2,100, the bureau said.
The bureau left its zinc prices forecasts almost unchanged. Zinc, used to protect steel from corrosion, may average $3,060 a ton in 2006, it said, compared with an earlier prediction of $3,000. It left unchanged its $3,500 a ton forecasts for 2007.
The bureau also left its gold prices forecasts almost unchanged. Gold prices may average $606 an ounce for 2006, and $645 in 2007. In June, it forecast an average gold price of $610 an ounce for 2006, and $650 for 2007.
``Despite declining in late August and September, gold prices are forecast to increase in the second half of 2006 and in 2007 largely because of the strength of investment demand,'' the bureau said.