Bank of America Merril Lynch in a research note published Wednesday forecasts bullish 2015 for base metals, backed by structural improvement of market fundamentals. The report also states that macro-economic pressures led to substantial retracement in prices of some base metals during summer this year.
According to the report, cyclical headwinds continue to exist for the time being. However, early signs of structural improvement in fundamentals are already visible in individual base metals. Aluminum market fundamentals are looking strong with the metal expected to shift to deficit in 2014. Bofa ML forecasts aluminum price to reach $2,010 per mt in 2015.
As for Nickel, the supply-demand situation may turn out to be extremely bullish through 2015. Higher Chinese refined and ferronickel imports and declining LME stocks may trigger further strengthening of market fundamentals for the metal. Nickel is expected to end in a deficit of nearly 50,000 mt in 2015, BofA notes. The Nickel prices may average at $23,836 per mt in 2015.
According to BofA Merril Lynch, copper still has the weakest fundamentals among base metals. China has de-stocked huge inventories of copper during summer, resulting in lower imports. But with copper inventories at substantially lower levels, the bank forecasts rebound in copper prices during 2015. The LME copper prices are likely to average at $6,939 per mt in 2015.
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