International base metals market is booming Copper prices are expected to recover

Yesterday, LME Nickel renewed its 19-year high, hitting 31,350 USdollars/ton. As the prices of other commodities fell for the third consecutive quarter, the international basic metal market remained popular. The London Metal Exchange (LME) nickel, tin and other metals were more recent. It has set a historical high price for more than a decade.

As of 17:30 Beijing time yesterday, LME nickel price was reported at 30912 yuan/ton, tin price was 9875 dollars/ton, lead price was 1490 dollars/ton, and zinc price was 3785 dollars/ton. Among them, the nickel price has hit a record high of 31,350 U.S. dollars per ton for 19 years, and the price of tin has also hit a new high of nearly 17 years. Two nickel mines under Eramet SA on New Caledonia in the South Pacific blocked the supply of nickel and stimulated nickel prices.

"The rise in nickel prices was mainly due to the market's disappointment with Eran-met's nickel supply," said David Shelter, an analyst at BNP Paribas. Eranmet’s nickel smelter in New Caledonia is the world’s largest nickel-iron plant.

Tight supply is still the focus of the market. From yesterday's LME registered warehouses, copper stocks have increased to 114,600 tons, but it is still less than the level of 980,000 tons in May 2002. Nickel and zinc stocks were 4,476 tons and 128,725 tons, respectively, both of which were low since 1991. The stock of tin dropped to 12,260 tons. The recent news of the closure of three tin refineries in Indonesia has strongly pushed the price up to US$10,000/ton, which has reached a new high in 17 years. Analysts still positively anticipate the tin price in the future market, saying that they are expected to Exploration of 12,000 US dollars / ton high.

"Although both copper and zinc have broken away from historical highs touched in May, it is not a good idea to sell basic metals at present," said Newton, a partner at Global Advisors. "It's also hard to see who really does this." Although the London Metal Exchange copper prices Since the May high of US$8,800 per tonne, it has fallen about 16% from the current level of US$7,500 per tonne, but it has almost doubled from the price of a year ago. At the same time, the price of nickel and tin recently hit a record high almost daily. The price of zinc is also close to the previous historical high. The price of lead rose to US$1505 per ton, which was changed from the pound in the early 90s of the last century. A higher level since the dollar was priced.

According to a recent survey by Reuters, rising costs, weaker U.S. dollar, and strong growth in Asian demand will keep the long-term prices of major industrial metals well above past levels. Among them, the average of 15 metals and mining senior analysts' estimates are: Long-term copper price is US$4,078/ton, which is 25% higher than the result of a similar survey in the same period of last year; the median estimated value of aluminum is US$1873.9/ton. It was 13% higher; nickel and zinc were US$9,920/ton and US$1,366.85/ton, respectively, an increase of 17% and 13% from the 2005 average. Long-term prices, often referred to as incentive prices, are primarily focused on 10 years or more, and are often seen as the price at which future capacity growth rates meet the expected long-term demand growth rate.

Goldman Sachs Gutman, a metal technology analyst, said: “The rising operating and investment costs will support the long-term price increase of the base metals.” Many metal spot prices hit record highs or multi-year highs earlier this year, mainly because supply cannot meet demand. At the same time, global inventories have also dropped to very low levels. In addition, the governments of mineral-producing countries have recently raised the tax rate and the cost of mineral resources, and will also increase costs.

For the reasons for the price changes, analysts said that the US dollar will continue to be weak for some time, which is an important factor in rising costs and high prices. In a recent report, Moore Bank Global Commodity Analyst, said that the cost is calculated in the local currency, which is appreciated, while the revenue is calculated in depreciated US dollars. Many mining industry owners may face cost pressures, which keeps the metal prices high. Some analysts also mentioned that the growth rate of long-term metal demand has risen. They expect that the industrialization of China and India will consume a large amount of metals.

"The price of copper will recover," an analyst from London said. "The higher price of nickel will push the overall base metal higher, and copper will also take the lead to recover."

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