Barclays Cuts Copper, Zinc Estimates, Raises Nickel (Update2) By...

Barclays Cuts Copper, Zinc Estimates, Raises Nickel (Update2)

By Chanyaporn Chanjaroen and Brett Foley

Jan. 30 (Bloomberg) -- Barclays Capital, the investment bank of Britain's third-largest lender, cut 2007 copper and zinc price forecasts and raised nickel and tin estimates.


Zinc prices have also dropped in 2007 as inventories jumped. The metal was the second-best performer on the LME last year after nickel on concern usage would beat supply.

Copper for delivery in three months on the LME gained $40 to $5,625 as of 11:14 a.m. local time. Zinc fell $11 to $3,490.

Stainless-Steel Demand

The average nickel price this year will be $32,750 a ton, Barclays said, compared with a previous forecast of $31,294. Growing usage and supply disruptions have helped prices more than double in the past year. Two thirds of global nickel supply is used in stainless-steel production.

China, which overtook Japan as the world's biggest stainless-steel producer last year, is consuming more nickel. The combined supply shortfall last year and in 2007 will be 57,000 tons, BHP Billiton Ltd., the world's largest miner, said in December.

``Most markets remain extremely vulnerable to supply problems,'' Barclays said.

Tin will average $10,375, from $9,925, the bank said. Tin traded at an 18-year high in London on Jan. 24 on concern that supply from Indonesia, the world's second-largest producer of the metal, may drop as the country tightened export regulations.

Barclays' forecasts for aluminum and lead were unchanged.

To contact the reporter on this story: Chanyaporn Chanjaroen in London at [email protected] ; Brett Foley in London at [email protected]

Last Updated: January 30, 2007 06:30 EST