By Allen Sykora
Base metals have suffered some price blows lately, but the positive underlying supply-demand fundamental story remains intact, says Stephen Briggs of BNP Paribas. World base metal demand won’t be as strong as it was in 2010, and there are “pockets of weakness,” Briggs says.
“But we still believe that developed nations will do well enough, and emerging countries will remain vibrant enough to raise global demand by an above-trend roughly 6% in both 2011 and 2012,” he says.
On the supply side, the copper industry is still struggling to meet output targets and tin supply is constrained. They expect lead supplies to start to fall next year, then zinc, as key mines close. Aluminum output could be curtailed because of higher power costs. “Only nickel faces the likelihood of a prolonged period of surplus, due to a wave of new mines,” he says.
