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Metal Bulletin brings the metal market its Analyst Price Expectations — or Apex for short.
MB had three questions as it created Apex.
Where will base metal prices be trading in the future? Which bank, brokerage or research company’s published price expectations have been most accurate previously?
And finally, was it possible to create a forecast based on the collective intelligence of the market, but weigh it towards those with the most accurate forecasts previously?
Apex contains leader boards of analysts based upon the accuracy of their most recent price predictions for the metals traded on the London Metal Exchange, both by metal (aluminium, copper, nickel, lead, zinc, and tin) and overall.
Credit Agricole’s Robin Bhar came top of the five most accurate forecasters for the first overall Apex leaderboard, predicting LME prices with 96.7% accuracy.
He was followed by Citigroup, 96.2% accurate; Metal Bulletin Research, 93.5% accurate; MF Global’s Ed Meir (who writes a daily column for MB), 93.4% accurate; and Goldman Sachs, 93% accurate.
The second part of Apex is an innovative consensus forecast for all six LME metals, weighted towards those analysts that were most accurate in their previous outlooks.
MB is pooling the collective intelligence of base metals analysts, but giving those with the best record more weight than their peers.
Finally, Apex is a series of tables across those metals that compile the forecasts of all the analysts that contributed.
MB recognises that analysts’ forecasts of metal prices shape expectations of the market for producers, consumers, traders and investors.
Such forecasts feed directly on an interpretation of the fundamental factors of supply and demand, even as they may express indirectly the house view on the global economy, on asset classes, or on currency movements.
They give particularly sharp form to an analyst or desk’s attempt to answer the biggest question of all: where will prices be six months from now, or a year hence?
And the market heeds these calls.
Think of Goldman Sachs’s $11,000-per-tonne copper forecast in October, which triggered a busy few days on brokerage desks around the world.
Bold calls are the product of skill, knowledge and experience, but also luck.
Despite the element of chance, accurate base metals price forecasting over time is worth measuring in the way that Apex does.
Apex also pools the forecasts of the world’s top base metals analysts, and gives those with the strongest track record the weight in the consensus forecast that their previous accuracy merits.
For a full explanation of the methodology and FAQ, click here.
To submit forecasts, please contact Cameron Hunt.