The London-based VM Group’s latest monthly analysis of the global Metals and plastics sectors, prepared for BNP Paribas/Fortis Bank, takes a pretty positive view of the year ahead for most metals – that is if you’re a producer or investor rather than a consumer! Of course China is the key to all this as although there may be signs of a pick-up in OECD economies, and thus metals demand , as the year continues but, as they put it it is “China’s rapacious appetite for base metals has shaped this market throughout 2009”. They reckon that without China most industrial metals prices would be languishing at around half their current levels.
And, they reckon the China factor will continue through 2010 with the Chinese government’s indication that it will maintain a relatively loose monetary policy through the year and they point to Chinese 2010 growth forecasts of upwards of 9%, which will keep metals demand strong. The other BRIC economies may also contribute and they conclude that “the year ahead is unlikely to see much price weakness for base metals – if anything, the reverse.”