LME WEEK 2016: Nickel, copper to rise in 2017 – Macquarie survey

Copper and nickel are expected to be the bull markets for 2017 despite their comparatively poor year-to-date performances, delegates said at Macquarie Research's LME Week Base Metals Outlook Seminar.

Around 200 delegates from the metals and mining industries voted in a poll after a series of presentations on the global base metal markets, with more than 50% expecting copper prices to move above $4,900 per tonne by this time next year, including 33% who predicted it will rise to $5,200 per tonne.

Copper prices have dropped 13.5% since the same poll was conducted last year.

The London Metal Exchange’s three-month copper contract closed the official session at $4,878 per tonne on November 1.

Some 46% of voters predicted that a resurgence in supply disruptions would lead copper out of its current range, with 28% fearing that Chinese demand could be weaker than expected.

Delegates were also bullish on nickel—79% see prices rising to $11,000 per tonne at this time next year, including 46% pegging it at $12,000 per tonne.

A potential export ban in the Philippines, the closure of loss-making capacity and continued growth in stainless steel output were the reasons given for a recovery in prices.

Delegates were less enthusiastic about this year’s star performer, zinc, pulling off a similar price gain in 2017, with 37% seeing prices rising to $2,500 per tonne by next year’s summit.

Zinc prices have risen more than 50% since the start of 2016, but concerns that Baar, Switzerland-based Glencore Plc could restart shuttered capacity at some point continue to hang over the market.

But aluminium was again a bone of contention, with 50% of voters saying that they would like to be short on aluminium over a 12-month month period, with 31% seeing prices at $1,600 per tonne in a year’s time.

Macquarie head of base metals research Colin Hamilton pointed out that attendees at last year’s summit were similarly gloomy, predicting that the metal would be at $1,528 per tonne at this time. However, the three-month contract is trading around 16-month highs of just below $1,740 per tonne.

This article was first published on www.fastmarkets.com.

What to read next
The most recent financial results published by base metals mining companies highlight just how inflation is affecting profit margins, with increasing wages, financing costs and input prices all hitting profits, sources told Fastmarkets in the week to Thursday March 28
Century Aluminum is among those selected to start award negotiations for up to $500 million in Bipartisan Infrastructure Law and Inflation Reduction Act funding to build a new aluminium smelter, the company said on Monday March 25
Participants in the copper concentrates market are struggling to comprehend an “unstoppable” decline in treatment and refinement charges (TC/RCs), with every week bringing spot deals at fresh lows and rumors each “crazier” than the last, sources have told Fastmarkets
The US Department of Energy selected five base metals projects to receive more than $900 million in federal investment from its Industrial Demonstration Program (IDP), leading to a reduction of four million tonnes of carbon dioxide emissions annually, according to a statement by the Department on Monday March 25
Aluminium producer and recycler Constellium announced on Tuesday March 12 that the company is moving to test hydrogen utilization at an industrial scale as a power source in its casthouses
Fastmarkets has corrected its MB-ALU-0002 alumina index, fob Australia and its MB-ALU-0010 alumina inferred index, fob Brazil, which were published incorrectly on Monday March 18.