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Banks upgrade metals after blip Posted: Mon, 02 Apr 2007 [miningmx.com] -- STOCKBROKERS are going bullish on metals, notwithstanding the price and equity wobbles of late February and early March this year. The most important consequence of that for investors is the positive effect stronger metal prices will have on companies such as Anglo American and BHP Billiton, the JSE’s two largest counters. Said Cadiz fund manager, Peter Major: “Platinum group metals definitely need an upgrading and probably the base metals too. I’m also buying back my shorts on Anglo. PGMs are too high to go short on Anglo.” In a March 26 report, Deutsche Bank said it was upgrading some of its 2007 and 2008 metals and minerals price targets. Nickel and uranium prices would be higher than forecast in this year and next, while the copper price would beat its 2007 forecast, as would iron ore in 2008. The bank was also bullish on thermal coal and gold but negative on zinc, aluminium and coking coal. It said the recent correction in metal prices: “... take on the character of recurrent corrections in a continuing bull market rather than harbingers of a major trend reversal”. It isn’t alone. Numis Securities, a British brokerage, says a combination of factors led it to believe most metals would be stronger in the short to medium term. Forces such as restocking of low inventories by consumers to continuing firm global GDP growth were again driving up metals. In January and February alone copper imports into China grew by more than 70% year-on-year. And the stainless steel market – which drives ferrochrome, nickel and molybdenum – has also been growing. British trade magazine Metal Bulletin reports that world stainless steel production increased 16.7% last year to 28.4 million tonnes. Numis is more bullish concerning precious metals, as well as copper, aluminium and nickel. Click Here to subscribe to our daily newsletter
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