High metal prices have caused institutions to adjust price forecasts. International institutions have increased their differences in aluminum prices.
With the advent of the second half of the year, the basic metal prices of the London Metal Exchange (LME) continue to maintain high levels, and some varieties even hit new highs, which has led many investment banks and analysts to adjust the metal price forecasts for the second half and next year. Among the LME base metals, the various types of institutions are aluminum for the varieties with different price forecasts next year. Their forecast for aluminum prices this year is mostly around $1.23/lb, which is slightly higher than last year's average price of $1.16/lb, but the forecast for aluminum prices in 2008 is as low as $1.02/lb and high at $1.3/lb.
Why is there such a big difference? William Adams, a metals analyst at the Basic Metals website, believes that an important reason is the perception of the US economic outlook: whether the US economy is slowing will drag down the global economy and thus affect metal consumption. “Or do you believe that the price of base metals will remain high for a longer period of time,†he said.
Another reason is that China's primary aluminum exports have been suppressed, which will reduce the supply of aluminum in the western market, and the production of aluminum in China may decline. He believes that with the advent of the LME annual meeting in October, analysts will be attracted by the prospect of “high metal prices will last longer†and raise forecasts for future metal prices. At the LME annual meeting, various agencies usually make predictions about the price of metals for the next year.
At present, global mining giant Rio Tinto economists and Morgan Stanley analysts have the highest forecast for aluminum prices in 2008, at $1.30/lb. They all believe that the metal bull market will continue next year. In fact, Rio Tinto's attempt to acquire Alcan is optimistic about the prospects for global aluminum demand in the next 10 years. The company expects demand growth of aluminum to be above 6% in 2011, with China's aluminum demand growing at an average of 15%.
According to a Reuters survey by a metal consultancy in the United States, analysts have recently forecasted aluminum prices for 2008 at around $1.13 per pound. The more bearish on aluminum prices is the Macquarie Bank economist, who expects the average aluminum price in 2008 to be only $1.10 per pound. They believe that China's aluminum supply is growing faster than its domestic demand. However, the least optimistic about the future of aluminum is JP Morgan Securities and Deutsche Bank's base metals analyst in London, they expect the average price of aluminum next year is 1.02 US dollars / lb, because the supply of aluminum in China will increase significantly. Goldman Sachs analysts also expect aluminum prices to weaken in the next two years.
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With the advent of the second half of the year, the basic metal prices of the London Metal Exchange (LME) continue to maintain high levels, and some varieties even hit new highs, which has led many investment banks and analysts to adjust the metal price forecasts for the second half and next year. Among the LME base metals, the various types of institutions are aluminum for the varieties with different price forecasts next year. Their forecast for aluminum prices this year is mostly around $1.23/lb, which is slightly higher than last year's average price of $1.16/lb, but the forecast for aluminum prices in 2008 is as low as $1.02/lb and high at $1.3/lb.
Why is there such a big difference? William Adams, a metals analyst at the Basic Metals website, believes that an important reason is the perception of the US economic outlook: whether the US economy is slowing will drag down the global economy and thus affect metal consumption. “Or do you believe that the price of base metals will remain high for a longer period of time,†he said.
Another reason is that China's primary aluminum exports have been suppressed, which will reduce the supply of aluminum in the western market, and the production of aluminum in China may decline. He believes that with the advent of the LME annual meeting in October, analysts will be attracted by the prospect of “high metal prices will last longer†and raise forecasts for future metal prices. At the LME annual meeting, various agencies usually make predictions about the price of metals for the next year.
At present, global mining giant Rio Tinto economists and Morgan Stanley analysts have the highest forecast for aluminum prices in 2008, at $1.30/lb. They all believe that the metal bull market will continue next year. In fact, Rio Tinto's attempt to acquire Alcan is optimistic about the prospects for global aluminum demand in the next 10 years. The company expects demand growth of aluminum to be above 6% in 2011, with China's aluminum demand growing at an average of 15%.
According to a Reuters survey by a metal consultancy in the United States, analysts have recently forecasted aluminum prices for 2008 at around $1.13 per pound. The more bearish on aluminum prices is the Macquarie Bank economist, who expects the average aluminum price in 2008 to be only $1.10 per pound. They believe that China's aluminum supply is growing faster than its domestic demand. However, the least optimistic about the future of aluminum is JP Morgan Securities and Deutsche Bank's base metals analyst in London, they expect the average price of aluminum next year is 1.02 US dollars / lb, because the supply of aluminum in China will increase significantly. Goldman Sachs analysts also expect aluminum prices to weaken in the next two years.
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