Salient to Investors:

Justin Smirk at Westpac Banking focuses primarily on economic cycles, central banks and financial markets to make commodity predictions. He says:

  • Industrial metals will rally through June 2013 as the economy strengthens in China. China’s economy is at a turning point both for policy and inventories, said
  • We are at the worst for the growth cycle and commodity prices will rise through 2012 and into 2013.
  • Aluminum will rise to $2,380 a metric ton by June because of China’s recovery and central-bank actions in Europe and the US, boosting energy prices, which are 40 percent of smelters’ production costs.
  • Nickel will rise 14 percent to $18,500 a ton, copper as much as 11 percent to $8,500 a ton, zinc gains 7.7 percent to $2,100 a ton
  • See little value in gold so tend to miss the bullish runs, and its price stability is surprising.
  • Iron ore  has seen the worst of the rise in costs, so expect $170 by June.

Barclays  increased estimates for an aluminum glut for 2012 and 2013 said prices will decline. Goldman Sachs is increasingly cautious about copper for the next several months, partly because of record stockpiles in China’s bonded warehouses.

The median analysts expects aluminum to average $2,200 in Q2, copper $8,225, zinc $2,200 and nickel $18,875.

 Barclays estimates China consumes 43 percent of all aluminum, 41 percent of copper, 44 percent of nickel and 43 percent of zinc. Europe consumes 18 percent of all copper and 14 percent of aluminum.

Itay Simkin at Krom River Trading said having an economist on staff is a must.

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