AB: BarCap ups base metal forecasts on strong outlook
Barclays Capital has revised upwards its base metal price forecasts for the second half of 2009 as a result of an improving demand outlook and increased investor risk appetite, it said on Monday.
The bank said recent data had suggested the predicted slowdown in China's base metals imports could be less than previously thought, with Chinese real demand expected to improve through the second half of the year.
"The pull back in base metals prices was short-lived and a strong uptrend is now in place," the bank said in a research note.
"For the first time in over a year, OECD buying is showing signs of life, and we view an earlier-than-expected recovery in demand as a notable upside risk to prices," it said.
Increased investor risk appetite and a healthier macroeconomic outlook had also helped establish a higher support level for prices, the bank added.
"The macro outlook continues to brighten, which has profoundly positive implications for base metals prices," it said.
"Global economic growth expectations are improving and, importantly, the reigns are being taken by key metals consumers such as China."
Below are Barclays Capital's previous and revised forecasts.
