Macquarie LME summit makes BULL CALL ON COPPER Michael Bennet From: The Australian October 12, 2010 5:21PM DELEGATES at one of the metals industry's biggest global events expect commodity prices to continue to rise in the next 12 months.
Copper is again the consensus �bull call�, according to Macquarie.
In a further boost to prospects for the Australian dollar hitting parity with the US greenback, Macquarie today said a poll of 250 market participants tipped the weighted average price of all base metals to rise 35 per cent; the poll was conducted at Macquarie�s annual LME base metals outlook summit in London yesterday.
The forecast compared to last year's expectations of a 15 per cent spike, highlighting the improved view in the last year as emerging economies rebound from the global financial crisis.
�The recent run-up in prices has driven this to some extent, but it does reinforce that industry participants still believe that the base metals sector holds value for 2011,� said analyst Colin Hamilton.
�The robust nature of the OECD recovery coupled with continued strong growth in Chinese and other emerging-market demand mean that, in general, supply-demand balances for the base metals look much healthier.�
This follows Macquarie last week upgrading its iron ore price forecast to $US120 a tonne, free on board, for the next three years, and for spot prices to potentially spike towards $US200 a tonne in the first half of 2011.
The favoured �long� base metal from delegates for the next 12 months was again copper, to be driven by mine supply underperformance, followed by aluminium, lead and zinc.
On the �short side�, the audience backed nickel and aluminium.
Copper has risen 33 per cent since last year�s Macquarie summit, and the spike has seen Equinox Minerals, PanAust, OZ Minerals and Sandfire Resources post strong gains.
�Our feedback from recent market discussions suggests that many funds are still not �all-in� in terms of copper, with more potential longs on the table,� said Mr Hamilton. �Against this backdrop, a further strong run in copper prices is not out of the question.�
Copper is trading around a 27-month high of $US8360 a tonne, which delegates at Macquarie's seminar said could rise 17 per cent to $US9670 a tonne in the next 12 months. The metal outperformed last year's expectation for $US7164 a tonne by Macquarie�s event this year.
