Market Watch reported that BNP Paribas cut it outlook on base metal prices for next year but reiterated its view that demand for the metals should grow in 2013 as the global economic outlook brightens.
The bank cut its 2013 copper forecast by 2.2% to USD 7,825 per tonne its aluminum 2013 forecast by 6.4% to USD 2,200 per tonne and its lead outlook by 1.6% to USD 2,510 per tonne. It also lowered its 2013 nickel outlook by 2.0% to USD 18,000 per tonne its tin outlook by 3.1% to USD 24,700 per tonne and its zinc forecast by 6.5% to USD 2,175 per tonne. However, BNP Paribas expects global base metal demand to grow by 2.5% in 2012 and between 5% and 6% in 2013.
Mr Stephen Briggs analyst of BNP Paribas said that "In the short term, base metal prices are likely to continue to be driven largely by sentiment about the euro zone crisis, economic prospects in China, the fiscal cliff and the shape of fresh quantitative easing measures in the US and by associated moves in the US dollar. Our house view on these issues is fairly positive, with the dollar consequently expected to weaken. This leads us to expect base metals to rally in the coming weeks and into early 2013."
Mr Briggs said that however, risks to BNP Paribas's forecasts persist with copper likely to be worst hit if economic conditions worsen. Were the global economic outlook to deteriorate sharply; copper might be the most exposed metal, not because its fundamentals are relatively poor but rather because, uniquely, its price is still far above production costs.
