This should help the share price in 2008 if the forcasters are correct as posted in The Australian today.
Andrew Trounson | July 26, 2007 COMMODITY price forecasters are increasingly joining the "stronger-for-longer bandwagon" with an Access Economics survey of 11 analysts showing that price forecasts are continuing to be revised upwards, especially forecasts for bulk commodities coal and iron ore.
"Recent upward revisions to consensus forecasts for the pace of output growth in China and India have led to the panel revising up their forecasts over the next few years," Access said in its quarterly survey update.
At the start of the year the 11 analysts were forecasting China's economic growth at 8.3 per cent this year, but the consensus is now for the Chinese economy to grow this year by 10.4 per cent.
But, apart from the strong coal and iron ore markets, by late 2009, most mineral prices are expected to drop from their current levels.
Nickel prices, which have soared by 250 per cent in the last year, are forecast to have fallen by 56 per cent by late 2009 compared with the June quarter.
Copper prices are forecast to be down 38 per cent and zinc down by 44 per cent by late 2009, while price falls of more than 20 per cent are forecast for alumina, aluminium and uranium. "Stronger for longer doesn't mean stronger forever," Access Economics said.
But while base metal prices are set to pull back in the next few years, forecasters are tipping ongoing strength in iron ore and coal prices.
Iron ore prices are expected to be up a further 14 per cent by the end of 2009, after peaking in 2008-09, while coal prices are expected to be still 5 per cent up on current levels by the end of 2009.
Prices of mineral sands ilmenite and rutile also still have some upside in them with forecaster tipping prices or both to peak in 2008-09.
By the end of 2009, ilmenite prices are expected to be 14 per cent above current levels, while rutile prices are forecast to be 4 per cent higher.
The consensus among analysts surveyed is that the price of oil will peak in September this year, and will have retreated back to $US57.75 a barrel by December 2009.
The Australian dollar is forecast to be back down at US76.7c by the end of 2009.
The gold price is forecast to be around $US646 an ounce come the end of 2009, after peaking at a quarterly average of around $US690 in 2008.
ARH Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
